The news that water cannot be termed organic has already hit the world’s headlines after negotiations between the consumer watchdog and the manufacturers resulted in the latter accepting the Australian Competition and Consumer Commission’s terms, thereby avoiding enforcement action.
Active Organic, Lithgow Valley Springs Organic, Nature’s Best Organic, Organic Australia, Organic Falls, Organic Nature’s Best and Organic Springs have been renamed, with new bottles now making their way to the market.
Credence claims
According to ACCC deputy chair, Delia Rickard, credence claims, which signify that a product possesses a premium attribute, are a priority for the commission - and especially so in the food and beverage industry, when they have the potential to influence consumers and disadvantage competitors.
While in this case the ACCC stressed there was no indication that consumers had paid higher prices for organic water than regular bottled water, consumers are often prepared to pay more for products that make credence claims which match their values.
“Credence claims such as ‘organic’ can be used to justify higher prices and create a competitive advantage for the user. As such it is essential that they are only used correctly,” she explained.
“Consumers are increasingly making purchasing decisions that value the types of claims that directly affect the integrity of the product, such as where or how something was made, grown or produced.”
No support
There is no regulatory support in Australia for the notion that water can be “organic”; in the context of food and drink, the word refers to agricultural products that have been farmed according to certain practices. As water is not an agricultural product, the ACCC deemed the use of “organic” was now appropriate.
“Organic standards acknowledge that water cannot be organic. Any claim that particular water is organic would therefore be misleading or deceptive,” Rickard said.
“Misleading credence claims can also undermine the level playing field and disadvantage other suppliers.”
Brand names
A number of the manufacturers had argued that the word “organic” was not a representation but part of the brand name, but the ACCC rejected this argument.
“Manufacturers cannot hide misleading claims in their brand names,” Rickard said.
Speaking to The Guardian, David Isaac, director at DJ&A Australia, which sells Organic Australia water, said his company decided to comply after the ACCC asked it to change the name of its water.
“Whether we agree to their view or not – we put that to one side and decided to co-operate with the ACCC,” Isaac said, adding the move would have “a little bit of an effect” on water sales, although this would be offset by customer loyalty.