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RECKITT Benckiser's legal headache has taken another turn after the consumer watchdog appealed an 'inadequate' fine of $1.7 million for misleading customers.
The Australian Competition and Consumer Commission (ACCC) has filed a Notice of Appeal from the Federal Court's decision against the pharmaceutical company for contravening the Australian Consumer Law.
Last December, the court found that Reckitt Benckiser made deceptive claims on its website and product packaging that Nurofen Specific Pain products were formulated to treat particular types of pain.
While each of the varieties of back pain, period pain, migraines and tension headaches all contained the company's standard ibuprofen lysine 342mg but sold for almost double the price.
The ACCC argued that the active ingredient is used for a wide variety of conditions and is no more effective at treating the pain of described on its packaging than any other Nurofen Specific Pain products.
Reckitt Benckiser was ordered to pay penalties totalling $1.7 million last month, despite a recommendation for a $6 million fine to send a strong deterrence message. The court found that although the packaging was designed for profit, the product didn't cause any physical harm.
ACCC chairman Rod Sims says the penalty was inadequate considering the longstanding and widespread nature of the conduct and significant profit made.
"The ACCC will submit to the Full Court of the Federal Court that $1.7 million in penalties imposed on a company the size of Reckitt Benckiser does not act as an adequate deterrent and might be viewed as simply a cost of doing business," Sims says.
"This is particularly the case when the judge found that Reckitt Benckiser had made many millions in profits from sales of 5.9 million units of these products at around 8500 outlets during the relevant period."
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