Part 1: It’s all about the price tag, naturally.

The Full Court of the Federal Court recently found that Aldi shoppers should know they are not buying premium boutique products and should interpret labels accordingly.^[1]

The plain facts

The Court overturned the primary judge’s decision. Referring to the ‘cheapest part of one of the cheapest stores’, it found Aldi’s use of ‘naturals’ on hair care products was not misleading or deceptive under the Australian Consumer Law.

Raw context

While the definition of ‘natural’ is relevant, whether use of the word is misleading or deceptive ultimately depends on context. The context in this case included:

• the hair care products were generally found in the discount bins in Aldi stores;
• Aldi was known to consumers as a discount supermarket;
• consumers would not expect hair care products sold in Aldi to be made of mainly ‘boutique natural ingredients’, particularly given the low price point; and
• ‘naturals’ was used as a sub-brand of the Protane brand and appeared smaller in size, under the word ‘Protane’.

On this basis, the Court found ordinary reasonable consumers would understand ‘naturals’ to refer to the sub-brand of the products and the presence of argan oil. It rejected the argument that consumers would expect the products to be composed of mostly natural elements, especially when shopping in the cheapest part of a store like Aldi.

Pure consequences

If the word ‘natural’ is on your products, consider if, in the context of where it is sold and how the word looks on the packaging, it is likely to mislead or deceive consumers.

Boutique and high-end brands should provide additional details about the natural ingredients of their products to avoid misleading consumers. A breach of the Australian Consumer Law can have significant implications, including damages and orders for compensation.

If you have any questions about labelling compliance, get in touch with our TTR team for a labelling review.

Stay tuned for part 2, where we discuss the trade mark issues raised in this case.

^{[1] Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93.}