Posted 16 April 2012
Homemark continues to sell Slim Coffee in breach of the ASA ruling. Tells you something about the ethics of this company.
|Homemark Slim Coffee / HA Steinman / 12988|
Ruling of the : ASA Directorate
In the matter between:
Dr Harris Steinman Complainant(s)/Appellant(s)
Homemark (Pty) Ltd Respondent
16 Apr 2012
In Homemark Slim Coffee / HA Steinman / 12988 (29 April 2009), the Directorate rejected the expert relied on by the respondent, and ruled that weight loss claims made for its Slim Coffee product were unsubstantiated. The respondent was instructed to withdraw the claims with immediate effect within the deadlines stipulated in Clause 15.3 of the Procedural Guide and not to use the claims again in future.
Subsequent to this, the respondent ultimately succeeded at the Final Appeal Committee (in a ruling issued on 25 March 2010), resulting in the ASA accepting Dr Beverly Summers as an independent and credible expert (in a ruling dated 17 May 2010).
The complainant requested arbitration, and the respondent was invited to participate, but it opted not to. The ultimate report from the arbitrator found, inter alia, that “… no evidence was presented to show the effect of the Homemark Slim Coffee mix per se on weight reduction and therefore no claim regarding weight loss can be made in this regard”. On this basis, and given the other findings of the arbitrator, the Directorate issued a ruling dated 1 June 2011, which held that any and all weight loss claims for the respondent’s product must be withdrawn with immediate effect with the deadlines stipulated in the Code.
It should also be noted that the respondent has twice (21 September 2009 and 15 March 2010) been found in breach of active adverse rulings because it continued making claims ruled against.
SUBSEQUENT TO THE RULING TO THE ARBITRATION REPORT
On 17 February 2012, Dr Steinman lodged a breach complaint against the respondent’s Slim Coffee packaging at Game in Canal Walk, Century City, Cape Town.
The complainant submitted, inter alia, that he found Slim Coffee still being sold in the same packaging and with the same claims previously ruled against. It was argued that the respondent is deliberately and flagrantly continuing to market these products in spite of the ASA rulings.
RELEVANT CLAUSE OF THE CODE OF ADVERTISING PRACTICE
In light of the breach allegation, Clause 15 of the Procedural Guide (Enforcement of rulings) was taken into account.
The respondent submitted that all television and other advertising for Slim Coffee ceased immediately after the Arbitration report was issued. All stocks of Slim Coffee were withdrawn from all Homemark outlets in line with the ASA regulations shortly after the arbitration report was made. It submitted that the complainant would have established that, if he had visited any of its stores, in particular, as his complaint relates to the Game stores.
The respondent further submitted that, with regard to major retail chains, the situation is different as it does not always have the flexibility to remove stock of its products at wish. Slim Coffee is a particular case where it initially had to discontinue the product. It explained that:
“… we initially had to discontinue the product. Later on, based on the ASC’s ruling of May 17, 2010, (on the strength of the FAC ruling of March 25, 2010) we were allowed to start reselling the product to the various retail chains. Unfortunately and at great cost to Homemark, some of these retail chains refused to re-list the product, reminding Homemark that they themselves suffered some damage from the abrupt termination of our TV advertising in the first instance (back in 2009). Those that agreed to give the product another chance, notably Game, did so reluctantly and on the understanding that we will not repeat the same pattern. As a result, even after the arbitration report ruled against the product 8 months ago, we had to meet our delivery commitments to them, till after the recent Christmas season”.
When the Directorate asked for clarity as to when exactly the respondent stopped disseminating stock to Game, the respondent advised as follows:
“Our records indicate that our last orders from Game were received and executed in early February. They relate to a few Game stores with a total delivery for the month of February of 150 units … I have made sure that not one unit has been delivered to Game in March, nor do we intend to deliver anymore in the future”.
The respondent made the point that this delivery is minute compared to the number of units sold prior to the final adverse arbitration ruling. Unfortunately, due to the unique circumstances forcing the respondent to sell, remove, sell, and ultimately remove the product, these few commitments had to be kept.
It always understood that the ASA regulations made a clear distinction between stock that can no longer be made available (beyond the three months “grace period” following the adverse ruling) in its own stores on the one hand and stores it has no control over, such as a major retail chains on the other.
Clearly it is not in violation of any ASA regulations and strongly disagrees with the complainant’s comment that it is deliberately and flagrantly continuing to market these products in spite of the previous ASA rulings.
ASA DIRECTORATE RULING
The ASA Directorate considered all the relevant documentation submitted by the respective parties.
The Directorate is only tasked with determining whether the respondent is in breach of the previous ASA Directorate ruling.
The key question here is whether or not the respondent continued to disseminate stock after the relevant deadline. Given that the final adverse ruling (as a result of the arbitration findings) was issued on 1 June 2011, the respondent was obliged to stop disseminating stock by 1 September 2011. On its own account, it continued to ship (albeit minute quantities) as late as February 2012, five months after the relevant deadline.
Clearly, this is in breach of the ruling dated 1 June 2011 and therefore in breach of Clause 15 of the Procedural Guide.
However, the circumstances surrounding this breach are somewhat unique, in that the respondent was initially told to stop advertising, only to be told to start advertising, and again to stop. This would likely have caused havoc insofar as logistical implications on the supply chain are concerned. It is also noted that this appears to be the only evidence of a breach, and there is nothing to show that the respondent supplied other stores or even continued to stock this product in its own stores.
In addition to this, from the information supplied by the respondent, it would appear that the levels of stock supplied to Game during the period of breach were substantially and significantly lower than prior to the final adverse ruling.
In light of this the Directorate does not believe sanctions are needed at this time.
Accordingly, while the breach allegation is upheld, no sanctions will be imposed on the respondent at this time.