A health supplement firm has been fined $194,400 for mislabelling its products and found guilty of failing to supply information to the Commerce Commission.
Invercargill firm, Gateway Solutions Limited (formerly trading as Silberhorn Limited) has been fined $194,400 in the Dunedin District Court for misrepresentations it made about its deer velvet health supplements. The company and its director and majority shareholder, Mr Ian Carline, were also found guilty of failing to supply information to the Commission during its investigation.
Silberhorn produced and sold health and dietary supplements, including a range of health supplements made from deer velvet. The range included products endorsed by golfer, Sir Bob Charles. The deer velvet supplements were marketed as effective to support strength, activity and joint mobility.
The Commission had received a complaint alleging that Silberhorn’s deer velvet health supplements sold from March 2011 contained less deer velvet than was described on the product labels, with capsules being topped up with carob – a manufacturing aid.
In November 2017 the company pleaded guilty to 26 charges under the Fair Trading Act for conduct that was liable to mislead the public as to the nature or characteristics of the products, including four charges for claims made on its website.
Commission Chair, Anna Rawlings said Silberhorn instructed its manufacturers to produce products containing less deer velvet than its consumers were promised on the product labelling and marketing.
“Products that were marketed as ‘premium’ and as containing ‘100% deer velvet’ or ‘traces of carob’ actually contained up to a third carob. This was liable to mislead its consumers about the true composition of the products…Consumers have a right to know what they are ingesting and are entitled to trust that product labels are accurate.,” Rawlings said.
Deer velvet is derived from the growing bone and cartilage that develops into deer antlers and is marketed as aiding a variety of health conditions, as well as supporting joint mobility. Deer velvet retails at around $95 per kilogram + GST. Carob retails for approximately $6.95 per kilogram.
In a written judgment issued on 8 June, Judge K J Phillips said the actions in underfilling the capsules were “deliberate acts” representing “a serious deficiency in the actual amount of product being supplied to the consumer.”
The mislabelling of the products was “deliberate … on the part of the defendant company and that hidden from consumers was that the capsules contained a lesser amount of powder than what was stated to be in each capsule as was detailed on the labels, attached to the container they were in,” said Judge Phillips.
The products affected during the offending period were:
- Sir Bob Charles SPORTSVEL x100 capsule bottles – 250mg
- Sir Bob Charles SPORTSVEL x180 capsule bottles – 250mg
- Deer Velvet capsules x80 capsule bottle – 250mg
- Sir Bob Charles SPORTSVEL Red Pack x 30 capsules
- Sir Bob Charles SPORTSVEL Black Pack x50 capsules
The retail value of affected products was approximately $5 million, with 22 batches of product containing reduced quantities of deer velvet. This translates to more than 120,000 bottles and packs of the products, and more than 11 million capsules.
Silberhorn along with its director and majority shareholder, Ian Allan Carline also both pleaded guilty to one charge of failing to produce documents required by a statutory notice issued by the Commission during its investigation into the matter. He was fined $6,885.
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