Liquidators of LGL Commodities may take directors to court

Following the company entering administration in June this year, directors of failed grain company LGL Commodities may be taken to court as the appointed liquidators aim to retrieve up to $6m.

Andrew Yo of Pitcher Partners told the Weekly Times that the collapse of the company left around $10.7m of debt, inclusive of $8.3m owed to unsecured creditors.

In minutes from the last creditors meeting which took place on 26 September, the liquidator alleged that the company may have been trading while insolvent “since at least 30 April 2014”.

“The total value of the insolvent trading claim against the directors is estimated between $3.6 million and $6 million,” the minutes claimed.

“Initial investigations indicate that the directors may have breached Section 180 of the Act in relation to the duties as directors of the company.”

One of the company’s former directors, Simon Freeman, said at the same creditors meeting that the liquidator’s report failed to take into account a number of variables including potential insurance claims and alleged theft of stock. He also said that the directors would strongly defend any action regarding an insolvent training claim.

“Notwithstanding Mr Freeman’s claims, there is still $11 million which remains unpaid to creditors,” Yo told The Weekly Times.

“And these (losses) were accumulated over a number of months prior to the company’s insolvency.”

 

Supermarket practices need to be tested in court: AFGC

The AFGC says the practices of Australia’s leading supermarkets should be tested in court, following the ACCC’s claims that Coles has engaged in “unconscionable conduct” with its suppliers.

The ACCC has instituted proceedings in against Coles in the Federal Court, with ACCC chairman Rod Sims claiming, “The ACCC alleges that Coles took advantage of its superior bargaining position by demanding money from suppliers that it was not lawfully entitled to, and was, in all the circumstances, unconscionable.

“The ACCC has commenced these proceedings because it considers the alleged conduct was contrary to the prevailing business and social values which underpin business standards that apply to dealings with suppliers.

“These proceedings will provide the Court with an opportunity to consider whether conduct of this nature, if proven, is unlawful in the context of large businesses dealing with their suppliers,” Sims said.

The Australian Food and Grocery Council’s (AFGC) chairman, Gary Dawson, said it’s time claims like these were officially tested in court.

"Over recent years, there have been widespread reports of these sorts of practices being deployed by the major supermarkets to boost their bottom line at the expense of their suppliers," Dawson told the ABC.

"So it's very important these practices be tested in court, these allegations be tested thoroughly because it's in everyone's interests, including consumers, that there be a fair and competitive market.”

Coles is rejecting the claims, arguing that the communications with the suppliers referred to in the ACCC’s Statement of Claim were part of ongoing commercial negotiations involving a much broader, longer-term trading relationship with each of the five suppliers mentioned.

“These are normal topics for business discussions between grocery suppliers and retailers in Australia and around the world. Furthermore, commercial negotiations can be robust, regardless of the industry or sector,” the supermarket said in a statement.

The matter is listed for a directions hearing in Melbourne on 24 October, 2014.

 

Coles rejects ACCC’s ‘unconscionable conduct’ claims

Supermarket giant Coles has rejected claims of alleged unconscionable conduct by the ACCC.

The competition watchdog yesterday announced that it will be instituting proceedings in the Federal Court against the supermarket over allegations that it took advantage of its superior bargaining position by ‘demanding money from suppliers that it was not lawfully entitled to.’

“The ACCC has commenced these proceedings because it considers the alleged conduct was contrary to the prevailing business and social values which underpin business standards that apply to dealings with suppliers,” ACCC chairman Rod Sims said in a statement.

“These proceedings will provide the Court with an opportunity to consider whether conduct of this nature, if proven, is unlawful in the context of large businesses dealing with their suppliers.”

Coles says that the allegations specifically concern a limited number of dealings with five Coles suppliers in the lead up to the Christmas 2011 trading period in addition to issues related to waste and damaged products. Coles says that communications with the suppliers referred to in the ACCC’s Statement of Claim were part of ongoing commercial negotiations involving a much broader, longer-term trading relationship with each supplier.

“These are normal topics for business discussions between grocery suppliers and retailers in Australia and around the world. Furthermore, commercial negotiations can be robust, regardless of the industry or sector,” the supermarket said in a statement.

“The allegations include a day previously called Profit Day. This was an administrative day where discussions were held with suppliers in relation to outstanding claims and additional business opportunities.

“These discussions, including those concerning profit gaps, were aimed at improving the profitability of products. Profit gaps can occur when a product’s financial performance fails to meet business plans or expectations discussed between Coles and its suppliers. Products with poor sales performance limit Coles’ ability to deliver value to customers.”

Coles also added that the failure of suppliers to deliver agreed quantities of stock at agreed times, high levels of waste due to delivering products too close to their use by date, mishandling/ packaging damage and the poor performance of products in general are all issues that are “actively managed” by the supermarket.

The proceedings have risen out of the same investigation that was instituted by the ACCC against Coles on 5 May in respect to Coles’ Active Retail Collaboration (ARC) program.

In June, Coles categorically denied claims it engaged in unconscionable conduct by forcing suppliers to pay an additional rebate.

As part of the Statement of Claim, the ACCC is seeking pecuniary penalties, declarations, injunctions and costs. The matter is listed for a directions hearing in Melbourne at 10am on Friday 24 October 2014 before Justice Gordon.

 

Poultry processor reimburses workers $25,000

B&E Poultry Holdings – a repeat offender when it comes to underpaying staff – has again been reprimanded by Fair Work, having to backpay a group of three Taiwanese backpackers.

The backpackers were in Australia on 417 working holiday visas and employed to work at a facility in Ormeau in Queensland.

They started work at 2.30am and regularly clocked up to 60 hours a week for a flat rate of $17 an hour. The Fair Work Ombudsman found they should have been paid between $21 and $33 an hour, depending on their shift.

The workers, employed as casuals, were short-changed $12,347, $7,702 and $5,513 respectively, as well as being underpaid casual loadings, shift penalties, overtime rates and weekend penalty rates.

The employer – B&E Poultry Holdings– has previously been required to back-pay tens of thousands of dollars to other staff members, and since 2012, the Fair Work Ombudsman has required the company to hand over more than $140,000 to 15 other employees.

As a result of the latest contraventions, the company has entered into an Enforceable Undertaking with the Fair Work Ombudsman as an alternative to litigation. It has reimbursed all outstanding entitlements, issued a written apology for the breaches, and posted a workplace notice advising other employees of its contraventions, giving a commitment that such conduct will not occur again.

The company is also required to undertake workplace relations training on employee entitlements under the Fair Work Act and to engage independent, external consultants to review and report on its compliance at six monthly intervals for the next two years.
 

Red Bull to pay $US13 million over alleged false advertising

Energy drink manufacturer Red Bull has agreed to pay $US13 million to settle a class action that was brought against it over alleged false advertising, specifically in reference to the claim “Red Bull gives you wings”.

The class action was spearheaded by US Red Bull customer Benjamin Careathers, who has been a loyal customer of the brand since 2002. Careathers alleged that the company’s marketing slogan, “Red Bull gives you wings” implied that consuming the beverage would lead to increased performance and concentration and was therefore misleading, SBS World News reports.

Careathers brought the class action suit before the US District Court for the Southern District of New York on 16 January 2013, and referred to published academic journals articles and reputable newspaper stories to back his claim that Red Bull energy drinks provide their boost through caffeine alone – not guarana or any other added ingredient.

Careathers said that through its marketing, Red Bull’s claimed to offer a superior source of energy that is worthy of a premium price over a standard cup of coffee despite a genuine lack of scientific evidence to support such claims.

As part of the proposed settlement, anyone living in the US who has purchased a Red Bull product from 1 January 2002, has a valid claim to receive either $US10 in cash or two free Red Bull products.

Red Bull has refuted the claims but decided to settle the dispute to “avoid the cost and distraction of litigation.”

“Red Bull maintains that its marketing and labeling have always been truthful and accurate, and denies any and all wrongdoing or liability,” the company wrote in a statement to Bevnet.

Red Bull has now decided to voluntarily update its marketing materials and product labeling in the US.

 

NZ fishing enterprise investigated for suspected fraud

New Zealand’s Ministry for Primary Industries is investigating suspected fraudulent activity in the inshore commercial fishing sector.

Compliance officers have secured evidence that from a Hawkes Bay fishing enterprise and enquiries have indicated significant discrepancies between the company’s catch record and export documents, where more fish is being exported than is being reported as caught.

A Hawkes Bay family-based fishing entity involved in all facets of catching, processing and the sale of fish from nine vessels has been identified as potentially being involved.

“The investigation involves activity throughout the commercial supply chain – catching, landing, processing and exporting,” said Ministry for Primary Industries director of compliance, Dean Baigent.

Export documents show the company has exported substantial quantities of fresh chilled product over an 18 month period, while catch records show the company has landed considerably less.

The misreported figure is expected to grow with the inclusion of domestic sales that have occurred over the period in question.

“This looks like an example of a company side-stepping the regulations that ensure the sustainability of our fisheries in a very deliberate and calculated manner.  This type of behaviour undermines the Quota Management System, puts the fishery at risk and makes it more difficult for legitimate fishers to get their legitimate catch,” said Baigent.

He added that this is the largest “inshore fisheries” investigation of its type for many years.

“This morning (24 September) 88 MPI Compliance officers and investigators and New Zealand Police visited sites in the greater Hawkes Bay area, Wellington, Tauranga, Gisborne, Chatham Islands and Christchurch.”

 

Organic farmer Steve Marsh faces $800,000 in costs

A West Australian organic farmer, who sought to sue his neighbour for $85,000 for allegedly contaminating his property with genetically modified canola, could now have to pay $800,000 in court costs.

In June, the Supreme Court rejected Kojonup farmer Steve Marsh's compensation case against his former childhood friend Michael Baxter, ABC Rural reports.

Marsh alleged that he lost his organic certification on more than half of his farm after GM canola blew onto his land from Baxter’s neighbouring property.

Following a three week hearing, Justice Kenneth Martin ruled in favour of Baxter, stating that although Marsh and his wife bought two causes of action against their neighbour – common law negligence involving the breach of duty to ensure that the GM seeds were contained on his property, and the tort of private nuisance – they only claimed financial damages.

The organic farmer announced his decision to appeal the court's ruling in July, which is still pending.

Justice Kenneth Martin has now ruled to allow limits on costs to be removed, given what he said was the “unusual difficulty, complexity and not to mention an undeniable importance of the matter”.

In orders handed down on Friday, Justice Martin said the draft estimate of taxed costs and disbursements claimed by Mr Baxter against Mr Marsh was $803,989.

That included almost $339,000 in fees to Mr Baxter's legal team to prepare the case.

The awarding of costs is subject to any application for a stay of orders pending the outcome of the appeal.

Justice Martin also said attempts by Marsh's legal team to show Baxter did not ultimately bear the primary responsibility for costs in the case, were "wholly misplaced".

“To allow the plaintiffs' application for disclosure by Mr Baxter in respect of any agreements from the PGA [Pastoralists and Graziers Association], Monsanto or Mr Baxter's crop insurer would, on my assessment, very much amount to the sanctioning of an impermissible fishing expedition,” Justice Martin said. 

 

Food process workers back-paid $20k

Seventeen employees of a Melbourne company have been back-paid almost $20,000 following an investigation by the Fair Work Ombudsman.

Kanodia Nominees operates a food manufacturing business trading as Glendal Foods in Albert Street, Brunswick.

Fair Work inspectors found that Glendal Foods had failed to pay some employees in accordance with the Food, Beverage and Tobacco Manufacturing Award, 2010, underpaying process workers amounts ranging from $106 to $4,896 between January 2010 and August 2012.

Employees were underpaid base minimum rates, overtime rates and annual leave loading. Some also failed to receive paid rest breaks when working more than 1.5 hours of overtime above their ordinary hours.

The company also failed to keep correct employment records, and had made and kept false records in relation to several employees.

Kanodia has since signed an Enforceable Undertaking with the Agency. The terms of the undertaking required the company to apologise to each of the affected staff and give an unqualified commitment to comply with all requirements of Commonwealth workplace laws in future.

Kanodia also agreed to engage an independent, specialist workplace relations auditor to further review and report on the company’s compliance with workplace laws.

 

How to reduce your audit costs

Time is money, and while audits are part and parcel of being a food manufacturer, you should be striving to make them as efficient and cost effective as possible, writes Martin Stone.

With the increase in requirements for demonstrating compliance to a given standard, audit costs are steadily rising across the industry. The ultimate cost of a food safety audit is based on the amount of time an auditor spends on site plus a travel component, also based on time. Typically, that total time is multiplied by a rate to yield the total cost. The trick to reducing auditing costs therefore, is to reduce the time of the audit.

There are three areas that I regularly see as having potential for reducing audit time, all of which are under the control of the auditee. These include the evidence provided to the auditor, preparation for the audit and activities on the audit day itself. Here are some practical tips to ensure you are minimising your audit costs:

Evidence

  • Auditors base decisions on evidence. The better the evidence, the less time an auditor will take to make a decision. The best supporting evidence consists of relevant documents that get to the heart of a matter. 

    Documents should be titled, signed and dated.  Photographs should be headed and dated. Cross references should be logical and easy to follow. Make it easy for the auditor to join the dots and come to a correct and timely decision.

  • Remember that facts are quicker for an auditor to respond to – compared to opinions. The provision of hard, concise and  factual evidence will save auditing time and money.

Preparation

  • Read the last audit report carefully. Consider recommendations or any issues requiring close outs at this audit and be prepared with the chain of evidence that will be required. Expect the auditor to want to investigate any anomalies raised at prior audits and again, have relevant information at hand to provide to the auditor.
  • Pre-audit yourself. Imagine the non-conformances or questions that could be raised. Be prepared with an answer and chain of evidence to support your assertions. By anticipating the questions to come from an auditor, you can be ready with the answers.
  • Many facilities have lengthy induction/site entry programs which are underpinned by the requirement for visitors to read and respond to lengthy documents. Consider if some of the induction programs for visitors can be conducted off site. A system that allows an auditor to complete some or all of an induction program prior to arriving on site will reduce site time of the audit.

The audit day

  • Ask the auditor "Can we proceed quicker if possible, what can we do to reduce the time required?" Let the auditor know that you wish to keep audit time to a minimum and will do what you can to facilitate this. Ask the question at the start of the audit and again, for next time, at the closing meeting.
  • Get a plan for the audit and ensure the relevant people are available at each stage. If a key person is not available at a particular time, alter the audit plan to suit. Do not get in a position where you are waiting for a key person to finish a meeting before interacting with the auditor.
  • Have someone available for the auditor to access at all times. Think 'assistant auditor'; assigning someone like this can save you a lot of time. This person should be someone who knows where all the references are and how to find any auditor requests. The idea here is to ensure the flow of information to the auditor, rather than receiving a big list of requests that results in dead auditing time while the required information is retrieved. 
  • Ensure complete access to the plant is available for a single plant inspection. Having to go to and from the plant because one section or another is closed or in wash down or 'starting up later' wastes time. Tour the facility in a logical commonsense manner. Start with receivals and end with dispatch. This makes the process easy to understand and will speed transit through the facility. Guide the auditor, tell them where key monitoring takes place and point out 'places of interest' and those locations relevant to the program being audited. Again, do everything you can to ensure the tour is a 'one-pass'. Coming back to the plant to check on something that was not observed in the first pass wastes large amounts of time.
  • Develop a one page index of your system so that an auditor can find a relevant section quickly and easily. A diagram of the system component parts is also great to help an auditor who is unfamiliar with your system.Of course your system always takes some audit time, but you can minimise this.
  • Provide somewhere quiet, tidy and cluter-free for the auditor to sit and review. A big desk or table that they can spread out on is essential.
  • Ensure your records are organised, chronological and complete. Check this yourself if you rely on others to put the records together. Missing records will waste time. If you discover missing records that cannot be located before the audit, determine a cause and be prepared for questioning by the auditor. If the records have been misplaced, ask the auditor if you can send them for review on a later date rather than making the auditor wait as you conduct a sweep of the operation.

I recently reviewed a report where an auditor returned on a second day to complete an audit and logged only one hour of audit time for this day. They also logged an additional two hours of travel time for this second day. By staying back another hour, the additional travel time could have been avoided. Ask your auditor "Can we stay back to complete this rather than you coming another day?"

Above all, try to eliminate the 'waiting for' moments in an audit – waiting to see this item, waiting to find that document or waiting to see that person can be dead audit time which ends up costing your business money. Like most things in food manufacturing, planning really is central to minimising time and costs.

Let's face it, every year you should be getting better at audits, so having shorter audits as an objective is a worthwhile and achievable target. Try setting the auditee team a KPI of reduced audit time and see if you can actively reduce your audit costs.

Good luck.

Martin Stone is a director of HACCP Australia, a leading food science consultancy. He is an accomplished food safety auditor and undertakes audits for legal, insurance and certification requirements. For more information visit www.haccp.com.au

 

Australian coffee brands take trademark battle to high court

Australian coffee brands, Cantarella and Modena will be taking their trademark battle over blend names to the High Court.

Cantarella (which owns Vittoria) trademarked the Italian translation of Gold and Five Star – Oro and Cinque Stelle – over a decade ago, and Modena, which imports coffee blends that go by the names Oro and Clinque Stelle from Italian company Caffe Molinari SpA are calling for the trademarks to be cancelled, Yahoo!7 reports.

Cantarella successfully sued Modena in December last year for trademark infringement, however the decision was later overturned in the Federal Court. 

The court initially ruled that Italian words were commonly used in relation to coffee in Australia, and that fellow coffee traders had been using the words for some time in reference to quality.

The case will be heard in the High Court today.

 

Vineyard busted for falsely claiming organic status

 NASAA has won an injunction in the Federal Court against Kings Court Vineyards, restraining the Victorian grower from claiming its produce is certified organic.

A statement released by the National Association for Sustainable Agriculture (NASAA) claims that the organic certifier never certified Kings Court Vineyards and will be seeking the maximum claimable in damages and costs against the vineyards’ operators, Zeno and Duran Ayhan.

NASAA general manager Ben Copeman said the organisation is committed to truth in labelling and would rigorously pursue any producer fraudulently claiming certification.

“We are prepared to take similar action to protect our integrity, certification process and brand against any business claiming to be certified organic when it is not,” he said.

“This case is not only about NASAA protecting its brand and reputation but also about defending the brand value and integrity of our certified operators.

“Our certified operators spend many thousands of dollars to maintain their certification, perfect their organic products and grow their brands and images.

“Certified organic produce commands a premium from consumers who choose to eat food that is free of synthetic fertiliser and pesticide residues, or genetically modified organisms. That premium only exists, however, if the consumer can trust the integrity of the organic label,” Copeman said.

Earlier this year, a number of organic wholesalers in Sydney and Melbourne alerted NASAA that Kings Court Vineyards was claiming to be certified organic by NASAA when it was not. In June, the Association sought an injunction in the Federal Court of Australia to stop Kings Court Vineyards from claiming it was NASAA certified and from using the NASAA Certified Organic label on its products.

Zeno and Duran Ayhan have signed undertakings to destroy all copies of the fraudulent document that purports to be a Certificate of Registration issued by NASAA. The pair have also been forbidden from claiming they’re certified organic, unless they gain genuine certification.

 

Brownes fined $100k over waste milk pollution

Western Australian milk producer, Brownes has been fined $100,000 for polluting a creek near its Brunswick production facility with waste milk.

A ruptured seal in a milk silo caused somewhere between 70,000 litres and 140,000 litres of waste to spill into a Brunswick creek in the nearby Elvira Gully in November 2011, The West reports.

Magistrate Kelvin Fisher heard that the spill caused fish to die, in addition to producing a rotting odour that affected residents that lived nearby.

Brownes was fined in Bunbury Magistrate’s court on one count that it caused, or allowed pollution.

The ruptured seal was found to be caused by a lack of regular maintenance.

It took the company four weeks to clean the spill at the cost of $387,000.



 

Trade marks: protecting your product and your reputation

As tempting as it may be, replicating someone else’s packaging too closely can land you in hot water.

Copyright law, the law of misleading or deceptive conduct and passing off laws could in some cases be utilised to prevent the look and feel of a product’s packaging from being copied by someone else. If the packaging of a product is unique and distinctive, without being functional, that too, may be protected as a trade mark.

Patterns, shapes and aspects of packaging
Don’t forget that it is also possible to register colours, patterns, 3-dimensional food shapes and other aspects of packaging as trade marks. Having a trade mark registration over a particular element of packaging means that the trade mark owner can stop others from using it in that same category of goods or services.

For example, the 3D donut shape of Werther's Original butterscotch candy, the shape of Arnott’s Teddy Bear biscuits and various other shape and pattern trade marks have been registered in Australia.

Case study: The Coca-Cola bottle – even a blind man can feel what he holds
It is no surprise that the Coca-Cola bottle is registered as a trade mark as the shape is so distinctive. The Coca-Cola company executive Harrison Jones once stated that it’s so unique even a blind man could tell what he holds.

Reputation can be a sword when stopping a rival product
A significant function of trade marks is to protect reputation. In the area of copycat packaging, the strength of your brand’s reputation can be of great importance when it comes to your ability to stop imitators.

Case study: a Monster battle over energy drink 
In 2008, Hansen Beverage Company, a US manufacturer of popular energy drink, MONSTER ENERGY, took legal action against Australian company, Bickfords in regards to its identically-named energy drink (Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 181).

Despite having no actual market presence or trade mark registration for its brand in Australia, Hansen alleged that consumers would be misled by similarities between Bickford’s product and its own.

Both products:

  • were called Monster Energy;
  • were sold in ‘super-size’ black cans;
  • had three different versions of the drink in colour variants (orange, blue and green); and
  • used similar slogans and graphics positioning.

While there was no dispute that the similarities between the products could mislead or deceive consumers, in order to actually win the case, Hansen had to establish that it had developed a sufficient reputation in Australia to build an argument that people could in fact be misled. In doing so, it relied on the brand’s spill over reputation in Australia due to its connection with extreme sports competitions and strong presence on the internet.

In the first instance, the judge thought that the reputation of Hansen’s Monster Energy drink in Australia had been ‘fleeting’, ‘occasional’ and ‘incidental’. However, when Hansen appealed the decision to a higher court, the judges considered that indirect advertising, even if it originated from overseas, could be sufficient to establish the required reputation, especially due to the global reach of the internet.

As a result of the case, Bickfords changed the name of its energy drink to ‘Insane Energy’ and registered that as a trade mark in Australia.

Notably, had Hansen thought of registering its MONSTER trade mark in Australia early on, it would have been able to enforce its trade mark registration rights against Bickfords to prevent them from using the same name. In this case however, Hansen instead had to go to the trouble and expense of proving that it had a wide enough reputation before Bickfords could be stopped. One lesson from the case then, is to register trade marks early, and not only in the country where you wish to sell the products but also think about the countries where you may want to export to in the near future. 

What can be learned from all of this?
Firstly, if you have unique packaging that is not purely functional, ensure that you consider trade mark protection right from the outset so that you can secure a filing date and get in before anyone else.

If you may export products overseas, register your brand as a trade mark in those countries as well.

Further, if someone copies the look and feel of your packaging, take action fast, as waiting too long can mean that it simply becomes generic and not distinctive of your own packaging.

On the flipside, be wary of getting overly inspired by someone else’s packaging on the market as that could be misleading for consumers and could see you in the middle of a  trade mark battle.

IMPORTANT DISCLAIMER: This article is of a general nature only and must not be relied upon as a substitute for tailored legal advice to suit your own circumstances.

Sharon Givoni is a Melbourne-based intellectual property lawyer who acts for a number of packaging, food and beverage companies Australia-wide. Contact her at sharon@iplegal.com.au

 

TWE’s Penfolds embroiled in Chinese trademark battle

Due to Treasury Wine Estates failure to register the Chinese name for Penfolds, the wine brand has found itself in the midst of a lengthy legal battle with notorious trademark squatter, Li Daozhi.

The Australian Financial Review reports that a rival wine brand registered three variations of the Chinese name for Penfolds, Ben Fu, meaning that TWE could be up for hefty trademark infringement fines in addition to the rival company cashing in on the Chinese name for Penfolds by using it to sell wine.

Li Daozhi who also goes under the name of Daniel Li, has the rights to use the Ben Fu name until July 2019

“Treasury has little choice but to buy back the name at a hefty price or relaunch the brand in China,” wine consultant Andy Tan from Mad Wines for AFR. “Actually the Chinese company has done nothing wrong. In China the first person to register the name has the right to use it.”

TWE says that it had won an initial court case over the trademark issue, however the defendant has since launched an appeal.

“Treasury Wine Estates is confident it is the lawful owner of the trademark for Ben Fu in China and our legal challenge to those claiming this trademark was initially successful,” a TWE spokesperson told Fairfax.

“However, the individual concerned has subsequently appealed this decision. This appeal is still pending and it will take time for the Chinese legal system to process the matter.”

 

Treasury Wine Estates to ‘vigorously defend’ class action

Treasury Wine Estates has been served with a shareholder class action filed in the Federal Court of Australia by Maurice Blackburn Lawyers.

According to a statement released to the ASX by TWE, shareholder Brian Jones wishes to bring a claim on his own behalf and on behalf of persons who:

Jones says that he purchased 1,000 shares in TWE on 21 September 2012 at an average price of $4.76 per share.

Jones alleges the TWE contravened its continuous disclosure obligations and also alleges misleading and deceptive conduct, relating to the performance of TWE’s US operations.

TWE has strongly denied the allegations and says that it will 'vigorously defend' the legal proceeding.

Litigation funder, IMF (Australia) claimed in October last year that TWE had engaged in ‘deceptive and misleading conduct’ in regards to disclosures to businesses' US operations and called upon shareholders to sign up for a court action.

In response to TWE’s announcement in January that the company expected earnings for the first half of 2014 to be substantially less than last year, Ben Slade, managing principle at Maurice Blackburn Lawyers said that the announced suggested that continuous disclosure requirements may not have been complied with.

"We are confident that the company's shock $190 million downgrade announcement in July last year was indicative of such a breach,” Slade said at the time.

 

Fonterra requests stall on Danone court case

New Zealand dairy giant, Fonterra has requested that Danone’s claim for damages from the botulism scare in 2013 be delayed until arbitration proceedings in Singapore are finalised.

Danone launched High Court proceedings against Fonterra in New Zealand as well as arbitration proceedings in Singapore due to alleged recall costs of 350 million euros, and damage to the reputation of its infant formula company, Nutricia.

Fonterra has requested that the High Court case be put on hold until the arbitration proceedings are completed, stating that issues between parties should be determined in Singapore under the terms of the supply agreement with remaining issues sorted out by the courts, the New Zealand Herald reports.

The Queen's Counsel representing Fonterra, Alan Galbraith said that the supply agreement between the two companies specified that there was a A$10 million cap on specific claims which either party could bring against each other with a total cap of A$30 million for all claims. The agreement also specified a process for resolving disputes including arbitration.

According to Galbraith, the reason that the cap was in place was to protect the New Zealand dairy processor from losses which are disproportionate to the benefits of entering the contract.

In August last year Fonterra issued a warning that the whey protein in its baby formula products and sports drinks may contain a bacterium that can cause botulism.

Thirty-eight tonnes of the whey protein concentrate, manufactured at Fonterra’s Hautapu plant in May 2012, was believed to have been contaminated by an unsanitary pipe, and the scandal resulted in the resignation of managing director, Gary Romano, as well as two senior managers being place on leave.

 

VIC to increase farmer protection against animal activists

Agriculture Minister Peter Walsh has said that he will be introducing legislation before the Victorian state election that will provide more protection for farmers against extreme animal rights activists.

The coalition first committed to strengthen protection for farmers from trespassing animal activist groups in 2010. Walsh says that the election promise has not been forgotten and that the government will “have some more things to say around the right to farm”.

“A commitment is over four years and we will be sure to do something,” Walsh told The Weekly Times.

Peter Tuohey, president of the Victorian Farmers Federation backed Walsh’s comments, stating that activists “don’t have the right” to trespass on private property and take photos in a "misleading manner".

Colin Giles, co-owner of a Gippsland abattoir has claimed that his family suffered immense financial and emotional hardship from a state government investigation into animal cruelty charges in 2011 which were subsequently dropped last year.

Giles and his former quality assurance manager, James Rodwell, were set to face a number of charges under the Prevention of Cruelty to Animals Act after footage was released which allegedly depicted cruelty towards pigs during slaughter. Giles said that the accusations bought severe stress to his family as well as lost revenue, production and the closure of his abattoir.

Tuohey says that Giles’ case was a “prime example of someone coming in under deceptive circumstances to cause some mischief,” and that stronger laws could have prevented the closure of the business.

In contrast, animal welfare company Animals Australia said that the introduction of strict legislation such as the ag-gag laws in the US will only heighten the awareness of cruel practices.

“If anything can be learned from the US situation, it is that while animal cruelty continues, so will investigations to expose that cruelty,” Animal Australia’s legal counsel Shatha Hamade told The Weekly Times.

“The controversy relating to ag-gag laws in the US has only served to increase consumer awareness of cruel practices, exactly the opposite of what US industries were seeking through having these laws put in place.”

 

Nestle ordered to pay €500k for criticising French coffee company

Swiss food giant Nestle, has been ordered to pay 500,000 euros by a French court for intentionally criticising French coffee manufacturer, The Ethical Coffee Company.

The Ethical Coffee Company (ECC) which produces biodegradable coffee capsules, accused Nestle of damaging its brand by deliberately casting doubts in consumers’ minds relating to its products quality, safety and environmental credentials via its Nestle’s Club Nespresso network, AFP reports.

The court ruled in favour of ECC, and in addition to €500k in damages, Nestle was also ordered to pay 40,000 Euros in legal costs.

Founder of ECC, Jean-Paul Gaillard (a former Nestle executive) originally filed the lawsuit against Nestle in December 2012, and said that he was pleased with the outcome.

"I'm pleased with this decision, which demonstrates that the justice system works well," Gaillard told AFP

Nestle, whose coffee capsule brand Nespresso holds the majority share of the coffee capsule market, said that it was “disappointed” by the ruling, and that it plans to appeal the decision.