consumer protection act food symposium 2011

hahn & hahn attorneys at law

ATTORNEYS - NOTARIES - CONVEYANCERS

Consumer Protection Act: Impact on Food Security

26 October 2011

By Janusz F Luterek, Esq.

Pr.Eng, Attorney, Patent Attorney Partner at Hahn & Hahn Attorneys

Copyright J F Luterek, 2011

(May not be copied or used without express written permission)


Food Security and Right to Food

• Constitution of the Republic of South Africa in Section 27 provides that:

Everyone has the right to have access to sufficient food and water the state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of each of these rights.


Intention of the Act is to protect all consumers, focussing on the previously disadvantaged, the poor, the illiterate, the uninformed and all small business from exploitation and commercial abuse

Consumer ≠purchaser – even if got for free or purchase on sale at a retailer

Applicable to all transactions in South Africa except where state is consumer and some others BUT state is not exempted from CPA.

Consumer Protection Act


Why the need for a CPA? • Reputable manufacturers and retailers have had a voluntary set

of consumer rights and have to a large extent ensured that food sold is safe to eat and nutritious

• Most of South Africa’s population is in rural areas, has a low literacy, does not have access to these reputable businesses and often exploited e.g. sold expired or unwholesome foods

• These vulnerable citizens needed to be protected from exploitation and be provided with simple recourse

• Needed to combat the “but what else would they eat” or “I am doing them a favour “ mentality espoused when selling cheap expired food – chicken portion saga is an example of this.


1. Right to equality in the consumer market and protection against discriminatory marketing practices

• Differential pricing is ok if justifiable but not differential in quality e.g. poor quality for the poor and good quality for the rich

– DO NOT CONFUSE “luxury” and “quality”

• Right to fair pricing of goods and services

– What does this mean?

• Right to lodge complaints and have them dealt with promptly

– Everyone – but need access to phone or email or transport!

Consumer Rights


2. Right to choose

• Right to select the supplier of your choice - no one can tell you where you have to shop.

• Examine goods, even after purchase and delivery, return if unsatisfactory - quality or “not as advertised”

– Brine in chicken

– expired stock

– poor quality food (texture, colour, taste )

• Right to retain and not pay for unsolicited goods or services

Consumer Rights


4. Right to disclosure of information by producer, retailer, caterer etc

• Right to information in plain and understandable language

• Right to disclosure of prices of goods and services

– What you see is what you pay – adverts, shelf talkers etc etc

• Right to honest product labelling and trade description

– Accurate descriptions e.g full of meat, giant size, etc etc

– What if its not? - return for full refund – have supplier collect it!

Consumer Rights


Consumer Rights • Information in Plain and Understandable Language

– Plain language is required on packaging, ads etc

– Ordinary person of the class of intended consumer with

• average literacy skills,

• but no special skills as a consumer,

• must understand its significance and importance

• Images, text, syntax, etc etc

– What about best Before, Sell By, Use By – c.f. R146 defn’s


5. Right to fair and responsible marketing

• Right to protection against bait marketing

– Advertise product but no stock – poor travel long distance to get product but then sold something else

– Must sell upto “reasonably anticipated demand” quantities

• Right to protection in terms of trade coupons and similar promotions – e.g. buy one get one free

Consumer Rights


7. Right to fair, just and reasonable prices

• Right to protection against unfair, unreasonable or unjust prices or other contract terms

• What does this mean? “prices that are fair, just and reasonable”

– Fair price can be unjust

– Reasonable price can be unfair

– Just price can be unfair or unreasonable

PRICE FIXING! CPA IS ANOTHER REMEDY

Fair, Just and Reasonable?


8. Right to fair value, good quality and safety

• Right to safe, good quality goods – irrespective of price!

• Right to implied warranty of quality - refund

• Right to receive warnings on the fact and nature of risks

– Keep Frozen, do not refreeze as there is a risk of food poisoning

– Bake from frozen to avoid risk of food poisoning

• Right to have products monitored for safety and/or recalled

– POOR HAVE HIGER RISK OF COMPLICATIONS!

• Right to claim damages for injuries caused by unsafe/defective goods

– Food poisoning, foreign objects etc

– Undisclosed allergen –gluten, soy, fish?

Consumer Rights


RETURNS?


1. Marketing may not be false, misleading or deceptive (whether directly or indirectly), including exaggeration, innuendo and ambiguity. Obligation is on supplier.

2. One cannot claim a price advantage you don’t have! – Buy one get one free, but price is higher than when one sold

separately! 3. One cannot claim product quality, characteristics, properties,

uses, benefits, advantages that product does not have. - 1kg of chicken or meat – adulterated – 45% not protein - Full of chicken, Wors v Boerwors, etc etc

Fair and responsible marketing


must have warnings of hazards and clear instructions

– how to store product

• Eat within 4 hours of purchase

• Unsafe if not kept frozen til baked

– How to Bake product and display the product safely

• Temperature of baking

• Time

• How long can be displayed

• Cook from frozen and why

Warnings and Instructions


1. Producers, importers, distributors and retailers are collectively and individually liable (even if they did not act negligently) for any harm (including economic loss) caused wholly or partly by -

(a) supplying any unsafe goods;

(b) a product failure, defect or hazard in any goods; or

(c) inadequate instructions or warnings of hazards that may result from the use of goods.

- Warning about bones in deboned chicken, red tide risk in shellfish

2. Provider of services who supplies goods in conjunction with that is the “supplier” of those goods for purposes of this section.

- Shop selling baked pies

Product liability


Liability in terms of this section will be excluded if - (a) defect arose as a result of the product having to comply with a law; -

currently very few products – tinned meat and fish (b) defect was not present in the product at the time it was sold by that

party e.g. Thawed and refrozen, seal broken later lets water or air in; - temperature recorders critical – sign off on delivery note that inspected (c) defect arose solely due to a supplier complying with the instructions

from the person who supplied that supplier with the goods – incorrect storage instructions – incorrect cooking instructions;

(d) it is unreasonable for distributor or retailer to have discovered the hazard, having regard to that person’s role in marketing the goods to consumers; or

- visual inspection or smelling can never be unreasonable! (e) the plaintiff’s claim expired because it was brought 3 years after the

events

Exclusions / defences


CPA – Penalties and Administrative fines

Consumer Commission may issue “compliance notice” and set deadline for compliance

Non-compliance can be referred to Tribunal Fine greater of R 1,000,000 or 10% of total turnover Offences in terms of the Act ◦ Disclosure of confidential information by inspector,

complainant, or any party to proceedings can lead to a 10 year prison sentence

◦ Any other offence can lead to a 12 month prison sentence e.g. ignore compliance notice


REDRESS MECHANISM

• Simplified redress mechanism for consumers

– No or very little cost to consumer to pursue claims!

• Industry code and Ombud – in process at the moment

• Consumer Commission – investigative and prosecutorial

• Consumer Court – as already exists in Gauteng and WC

• Consumer Tribunal – same one as from NCA

• Investigators with powers of search and seizure

• Dawn raids by Commission – similar to Competition Act


Food Safety v Food Security • CPA is focussed on safe, good quality goods and preventing

exploitation NOT access to food for those who cannot afford it

• CPA has as an indirect (?) consequence improved access to food due to the anti-exploitation provisions

• CPA has as an intended and direct consequence safer food which in a country with high immune deficiency and poor health is critical – Lucia will expand on this I am sure

• Access to “food for all” is a Constitutional dream and the CPA is merely a tool in the armamentarium to reduce exploitation of the vulnerable on the path to that dream.


Thank You

Questions?

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consumer protection act food symposium 2011

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