Berri must change carton

NATIONAL FOODS, owned by the Japanese conglomerate Kirin, has agreed to changes to the packaging of products within its Berri Australian Fresh and Daily Juice Company ranges following a directive by the competition regulator.

By InvestSMART · 24 Dec 2010

By InvestSMART ·
24 Dec 2010

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The Australian Competition and Consumer Commission said it considered that the Berri Australian Fresh packaging suggested to consumers it contained only juice that had been recently squeezed.

National Foods said it accepted the Berri packaging was likely to have misled some consumers and contravened the Trades Practices Act. The product will become Berri Australian Grown in March.

National Foods has also agreed to amend its Daily Juice Company packaging to make it clear that the products may also contain cold stored juice.

This week Kirin, which also owns the brewer and winemaker Lion Nathan, was forced to revalue its $3.7 billion dairy business in Australia, cutting $485 million from the value of National Foods.

Kirin said the write-downs reflected tough trading conditions in the foods sector, particularly in milk. National Foods owns a number of dairy brands, including Pura Milk.

Kirin paid a total of $3.7 billion in 2007-8 for National Foods and Dairy Farmers.

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Frequently Asked Questions about this Article…

What packaging changes has National Foods agreed to for its Berri juice range?

National Foods has agreed to change the packaging of its Berri Australian Fresh range after the ACCC found the old packaging could suggest the juice was only recently squeezed. The product packaging will be updated and rebranded as Berri Australian Grown in March.

Why did the Australian Competition and Consumer Commission (ACCC) intervene in the Berri packaging?

The ACCC said the Berri Australian Fresh packaging was likely to have suggested to consumers that it contained only juice recently squeezed, which could be misleading. That finding prompted the regulator’s directive for packaging changes.

How will Daily Juice Company labels be changed following the ACCC direction?

National Foods agreed to amend Daily Juice Company packaging to make it clear these products may contain cold stored juice, ensuring labeling accurately reflects the product contents.

Did National Foods acknowledge misleading consumers or breaking consumer law?

Yes. National Foods accepted that its Berri packaging was likely to have misled some consumers and stated this contravened the Trades Practices Act, prompting the agreed packaging changes.

Has Kirin made any recent valuation changes to its National Foods business?

Yes. Kirin revalued its Australian dairy business, cutting $485 million from the value of National Foods. The parent company said the write-downs reflected tough trading conditions in the foods sector, particularly in milk.

Which brands and businesses are mentioned as part of National Foods and Kirin’s portfolio?

The article notes National Foods owns Berri Australian Fresh and Daily Juice Company ranges and a number of dairy brands including Pura Milk. It also notes Kirin owns brewer and winemaker Lion Nathan.

When and for how much did Kirin acquire National Foods and Dairy Farmers?

Kirin paid a total of $3.7 billion in 2007–08 for National Foods and Dairy Farmers, according to the article.

What should everyday investors take away from the packaging changes and Kirin’s write-down?

Investors should note this episode highlights regulatory scrutiny and consumer perception risks for food and beverage brands, plus the impact of tough trading conditions in dairy that led Kirin to cut $485 million from National Foods’ value. Watch for the March packaging relaunch and any further commentary from National Foods or Kirin on sales and margins.