May 23 2016 – 12:43PM
The consumer watchdog will appeal a $1.7 million fine issued to the maker of Nurofen over its misleading “specific pain” range, saying it should be increased to at least $6 million.
The Australian Competition and Consumer Commission says the fine handed down in the Federal Court last month is not severe enough to deter a company as large as Reckitt Benckiser from deceiving customers.
The court found in December that Reckitt Benckiser engaged in misleading or deceptive conduct by falsely claiming that Nurofen specific pain products were formulated to treat particular types of pain.
In reality, each of the products – advertised to treat back pain, period pain, tension headaches or migraines — contained the same active ingredient: 342 milligrams of ibuprofen lysine.
The ACCC said on Monday that a penalty of at least $6 million was required to send a strong message, given the longstanding and widespread nature of Reckitt Benckiser’s conduct and the large profit it made from the products.
“$1.7 million in penalties imposed on a company the size of Reckitt Benckiser does not act as an adequate deterrent and might be viewed as simply a cost of doing business,” ACCC chairman Rod Sims said.
“This is particularly the case when the judge found that Reckitt Benckiser had made many millions in profits from sales of 5.9 million units of these products at around 8500 outlets during the relevant period.”
Reckitt Benckiser argued in court that a $1.1 million fine was appropriate.
Justice James Edelman said the penalty would have been “far greater” if it were not for a few factors, including that the ACCC had not argued that the company’s conduct was intentional or reckless.
He also gave the group a discount for co-operating with the ACCC’s investigation and admitting to its wrongdoing, which led to other allegations falling away.
Reckitt Benckiser said in a statement it was “considering the appeal with its legal advisers”.
The ACCC has filed a notice of appeal against the fine. A directions hearing will follow.
Source : The Canberra Times