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1 FOOD FRAUD: Legal Position in South Africa By Janusz F Luterek, Esq. Pr.Eng, Attorney, Patent Attorney Partner at Hahn & Hahn Attorneys Copyright J F Luterek, 2017 (May not be copied or used without express written permission) ATTORNEYS - NOTARIES - CONVEYANCERS

2 Food Fraud in South African Law Food fraud not defined in our law as such Foodstuffs, Cosmetics and Disinfectants Act and Regulations criminal offence if for purposes of sale, describes any foodstuff,..in a manner which is false or misleading as regards its origin, nature, substance, composition, quality, strength, nutritive value or other properties or the time, mode or place of its manufacture

3 Food Fraud in South African Law Agricultural Products Standards Act Section 6 No person shall use any name, word, expression, reference, particulars or indication in any manner, either by itself or in conjunction with any other verbal, written, printed, illustrated or visual material, in connection with the sale of a product in a manner that conveys or creates or is likely to convey or create a false or misleading impression as to the nature, substance, quality or other properties, or the class or grade, origin, identity, or manner or place of production, of that product.

4 Food Fraud in South African Law Consumer Protection Act S 24(2) A person must not (a) knowingly apply.a trade description mislead as to any matter implied or expressed S24(3) A retailer must not offer to supply, display or supply any particular goods if the retailer knows, reasonably could determine or has reason to suspect..mislead

5 Food Fraud in South African Law S 29 - A producer, importer, distributor, retailer or service provider must not market any goods (a) in a manner that is reasonably likely to imply a false or misleading representation concerning those goods or services the nature, properties, advantages or uses of the goods or services; Any other material aspect

6 Food Fraud in South African Law S 41 - supplier must not, by words or conduct (a) directly or indirectly express or imply a false, misleading or deceptive representation concerning a material fact to a consumer; (c) fail to correct an apparent misapprehension on the part of a consumer, amounting to a false, misleading or deceptive representation have ingredients,.are of a particular standard, quality, grade..

7 Food Fraud in South African Law Information in Plain and Understandable Language Plain language is required on packaging and inserts Ordinary person of the class of intended consumer with average literacy skills, but no special skills as a consumer, must understand its significance and importance Layout, use of vocabulary, use of images, etc all considered Especially important for product descriptions, warnings on products etc e.g. equine trimmings = horse meat

8 Food Fraud in South African Law Main objective of Consumer Protection Act is to protect consumers against exploitation, poor quality, defective, unsafe goods and services and hold suppliers responsible AND provide consumers with simple redress e.g. CGSO Main objective of FCD Act and APS Act are compositional standards and safety and labelling, which incidentally also protects consumers but there is no redress for consumers, only criminal sanction for transgressors

9 General Definition of Fraud Unlawful and intentional making of a misrepresentation which causes actual prejudice or which is potentially prejudicial to another. Intentional deception by concealing or misrepresenting information that harms the financial interest of another person(s) and benefits the financial interests of the perpetrator

10 Enforcement hahn & hahn R146 FCD Act provides for criminal prosecution Presumptions in FCD Act make it much easier to prosecute offenders as many technical defences don t exist! 6 months for first offence or equivalent fine 12 months for second offence or equivalent fine 24 months for third offence or equivalent fine Forfeiture of goods in contravention of R146

11 Enforcement hahn & hahn APS Act provides for criminal prosecution Search Warrants issued and simultaneous raids on various retailers to seize non-compliant product and prosecute offenders Section 10 of APS Act and Regulations provide for an Appeal procedure for adverse decisions by DAFF inspectors very short time to Appeal 10 days for butter and cheese, 5 days for Juice, and 3 days for other dairy products etc Fines etc similar to FCD Act

12 Enforcement hahn & hahn Consumer Protection Act CGSO Ombudsman for Consumer Goods now mandatory! NCC investigation NCT hearing Greater of R or 10% of turnover Possible 12 months imprisonment instead of administrative fine

13 THE PRESENT hahn & hahn Very little if any enforcement against perpetrators of food fraud under FCD Act APS Act has increasing actions against perpetrators and other non-compliant product manufacturers, packers, and retailer NCC has indicated that they will be taking a stand on food issues as these affect the poorest of the poor, however, the actions to date have been mainly against expired foodstuffs and not against fraud which could actually cause harm to consumers e.g. diabetic chocolate with 45% sugar therein

14 Little publicized prosecution in KZN of a retailer selling confectionery with imitation cream marked as cream cakes R fine imposed THE PRESENT Far below that permitted under the Act Investigation by NCC under CPA of meat species fraud in meat products but no prosecutions to date Sale of pork hearts as Halaal failure in procedures, company defends the charges successfully

15 THE PRESENT hahn & hahn Consumer activism likely to lead to increase in enforcement activity A few high profile prosecutions are required to ensure that those considering this easy crime get the message Public need to be educated of how serious a crime this is!

16 Questions? Janusz F Luterek, Pr.Eng Attorney, Patent Attorney Partner at Hahn & Hahn Attorneys Janusz@hahnlaw.co.za