The makers of Streets Paddle Pop ice-creams and Sakata rice snacks have each paid a penalty of $10,800 after exploiting school canteen guidelines to create a "health halo" around their processed products.
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What does 'canteen-approved' mean to you?
Australian mums are concerned and confused by the labelling of snack foods as 'school canteen-approved'.
The Australian Competition and Consumer Commission issued an infringement notice to Unilever, owner of Streets Paddle Pop, and Smith's, maker of Sakata snacks, after it found their "school canteen approved" logos were making shoppers assume the products had been approved or were suitable as healthy options for school canteens.
Unilever had slapped a "School canteen approved" logo with a tick on the front, back and one side of its 10-pack box of "rainbow" Paddle Pop, despite the product being 20 per cent sugar.
Smith's had stamped a "Meets school canteen guidelines" logo featuring a lunchbox with a sandwich and fruit on its highly-processed Sakata "paws pizza supreme" rice snacks.
"The ACCC believes both companies were using logos to claim that these products were a healthy option for school canteens to supply to children, when they were not," ACCC Commissioner Sarah Court said.
"School canteen managers, parents and caregivers rely upon product packaging and labelling when choosing healthy snacks for children."
Last October, Fairfax Media reported an investigation by consumer group Choice found companies were increasingly exploiting the federal and state governments' school canteen guidelines. It identified 17 company-made logos on unhealthy foods.
Its survey of more than 1000 parents also found 43 per cent wrongly believed the logos were approved by an independent authority or government body.
Choice, which lodged a complaint to the ACCC, welcomed the news about the penalties.
"The dodgy logos were deployed on packs to fool consumers into thinking they were making a healthy choice for their kids," spokesman Tom Godfrey said.
"This is a timely reminder to parents to be on the lookout for 'health halos'Â when navigating the supermarket aisles each week."
Both Unilever and Smith's told Fairfax Media they were committed to providing clear and easy-to-understand information.
A Unilever spokeswoman said the company had co-operated with the ACCC and will be removing the logos from its "core" Paddle Pop range.
A Smith's spokeswoman said while the company stood by the "integrity" of its labelling and marketing of the Sakata product, it had already begun removing the logo before receiving the infringement notice.
"We anticipate new packaging to arrive on store shelves later this year," she said.
Both products featured a disclaimer that it met the "amber" criteria of the National Healthy School Canteens Guidelines. But the ACCC dismissed these because they were written in a small font and placed on a different side of the packaging.
"The ACCC did not consider these disclaimers were sufficiently prominent to correct the misleading representations created by the logos," an ACCC statement said.
The "amber" category means the product should be "selected carefully" rather than eaten regularly or in large amounts.
Dr Kieron Rooney, a nutrition expert at the University of Sydney who first sounded the alarm about the "health wash", welcomed the ACCC's action.
He said it was good to see Arnott's had kept its promise of phasing out its logo by June this year.
He said if Unilever and Smith's truly wanted to provide clear information on packaging, they would state their products were discretionary foods.
"The Australian Dietary Guidelines state discretionary foods - like ice-cream, biscuits and sugary drinks - should be limited to 10 per cent of the daily energy intake," he said.
Ms Court from the ACCC said it was focusing on misleading health claims on foods.
"The ACCC is currently examining consumer protection issues around ensuring that the health claims made by large businesses are accurate and will not mislead consumers," she said.
The payment of a penalty specified in an infringement notice is not an admission of a contravention of the Australian Consumer Law.
The ACCC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.