Not much pain for Nurofen
The maker of Nurofen 'Specific Pain' products, Reckitt Benckiser, has been ordered to pay $1.7m following a Federal Court decision in December last year that found the company had made misleading representations on its packaging.
The penalty pales in comparison to the $6m the ACCC had asked for.
While the company claimed that its higher-priced products targeting migraines, tension headaches, period pain and back pain were formulated to treat a particular area, they all in fact contained the same active ingredient, ibuprofen lysine 342mg. Each product, then, would have the same analgesic effect regardless of the area of pain.
The ACCC initially took action against Reckitt Benckiser in March 2015, accusing them of engaging in misleading conduct in breach of Australian Consumer Law.
"A $1.7 million fine is nothing compared to the profit Reckitt Benckiser would have made from tricking customers into paying a premium for products that weren't any more effective than cheaper generic pain relief pills," says CHOICE head of media and spokesperson Tom Godfrey. "Even the highest available fine under the law would have only been $6 million, which is pocket change for these giant companies."
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.
Same product, higher price
Following the court ruling last year, ACCC Chairman Rod Sims said that consumers have been misled, purchasing targeted pain products under the belief that each was specifically designed for and effective in treating a certain type of pain.
"The retail price of the Nurofen Specific Pain products is significantly above that of other comparable analgesic products that also act as general pain relievers," Sims said. "Recent price sampling conducted by the ACCC revealed that these products are being sold at retail prices around double that of Nurofen's standard ibuprofen products and standard products of its competitors."
Off the shelves
The court also ordered in December 2015 that Nurofen Specific Pain products be removed from all shelves within three months. Reckitt Benckiser was required to publish corrections in newspapers and on their website, as well as pay the ACCC's legal costs. But these measures now seem lenient in light of the scale of the deception and the disproportionately modest fine.
"If a $10 million per breach penalty had been available in this case, like it is available under parts of the Competition and Consumer Act, Reckitt Benckiser could have been facing a more appropriate fine of $60 million. This kind of fine is needed to send a clear signal to big business that there is no profit to be made in deceiving consumers," Mr Godfrey says.
A CHOICE investigation into painkillers in 2014 found that Nurofen's competitor Panadol also plays similar marketing tricks, peddling products which claim to treat different types of pain but contain identical active ingredients.