23 May 2016
Consumer group CHOICE has welcomed the ACCC's decision to appeal the $1.7 million fine for Reckitt Benckiser, the company that makes Nurofen, for misleading consumers with targeted pain relief products that didn't target pain.
"CHOICE believes Nurofen should have faced fines up to $60 million for orchestrating such a significant consumer con over so many years," says CHOICE Head of Media Tom Godfrey.
"A fine of $1.7 million is laughable to a business as large as Reckitt Benckiser which continues to make these dodgy targeted pain relief claims on pack.
"The fact that they are yet to remove the targeted pain relief claims from pain pill packs on supermarket shelves speaks volumes about how insignificant this penalty is. Adding a waiver to the pack's fine print will not take the pain out of your hip pocket.
"These massive global companies should be made to pay fines that fit the crime. We believe the law needs to be changed so that courts can and will issue penalties that give shonky companies a real headache."
CHOICE crunched the numbers on the Nurofen targeted pain relief con and found a $10.77 price difference from generic ibuprofen ($1.65) to Nurofen Period Pain Caplets ($12.42).<
"With consumers still paying a 652% mark-up for pain pills with these dodgy claims, it's time the penalties were dramatically increased to send a strong message to businesses that do not have consumers' best interests at heart," says Mr Godfrey.
"Reckitt Benckiser has sold these dodgy products for years. CHOICE first called the company out for its deceptive claims by awarding Nurofen one of our infamous Shonky Awards six years ago, in 2010.
"With the ACCC estimating that 5.9 million units of these products were sold at 8500 outlets during the relevant period, we estimate the company turned over at least $63 million more than a company selling generic branded product.
"The highest available fine under the law would have been only been $6 million, which is pocket change for these giant companies," Mr Godfrey says.
Penalties are capped at a maximum of $1.1 million when a company breaches provisions relating to consumer protection and misleading advertising of the Competition and Consumer Act (2010). Penalties can be as high as $10 million per breach if a company breaches other sections of the same Act.
In its submission to the review of Australian Consumer Law later this week, CHOICE will call for consumer protection laws to be updated so that the courts can hand down fines that match the size of the company and the harm caused by the behaviour.
"If a $10 million per breach penalty had been available in this case, like it is available under parts of Competition and Consumer Act, Reckitt Benckiser could have been facing a more appropriate fine of $60 million," Mr Godfrey says.