Businessman fined for misleading customers

An Auckland businessman has been fined $12,750 after he admitted making claims that were likely to mislead consumers about the country of origin and potency of royal jelly products.

Sung Yub Paik admitted two charges of breaching the Fair Trading Act in Auckland District Court today following a Commerce Commission investigation.

As managing director of Healthyways Products Corporation Limited, trading as Pacom, Paik was responsible for the marketing and distribution of Healthyways Natural Products Royal Jelly capsules through its Auckland store.

Despite the royal jelly being sourced from China, the labels and packaging included the wording "Made in New Zealand" and featured an iconic New Zealand fern symbol. Wording on the label also indicated that the royal jelly was fresh, when it was provided in powdered form.

In addition, the product was represented as containing 6 - 6.3 per cent of the active ingredient 10HDA. ESR testing revealed it only contained 4.32 per cent 10HDA.

Sentencing Paik, Judge Greg Davis said there could be no doubt that each of Healthyways' customers and competitors were disadvantaged by the representations.

Greg Allan, Commerce Commission enforcement manager, said this was another case where consumers had been deliberately misled by a business trying to exploit the New Zealand royal jelly market.

The case also demonstrated that company directors would be held individually accountable for their actions.

"Mr Paik was personally responsible for the design and wording of the labels and was aware that the 10HDA levels represented on the labels was inaccurate," said Mr Allan.

The commission's wider investigations into the royal jelly market in Auckland had uncovered a concerning lack of understanding of New Zealand consumer law by traders, Mr Allan said.

"We hope the actions we have taken over the last year have sent a strong message that this type of behaviour is not tolerated, and the consequences can be severe," he added.

This is believed to be the fourth case of its kind over the past year.