Incorrect suggestion in advertising is misleading
In December 2019, the Board of Appeal (“the Board”) of the Stichting Reclame Code (Dutch organization that deals with the self-regulation system of advertising in The Netherlands) ruled in a case concerning communications in advertising by The Flower Farm about or in connection with palm oil. The Flower Farm's products do not contain (palm) oil. The Flower Farm's announcements warn consumers of the negative consequences of the incorporation of palm oil in (other) products. These include statements on The Flower Farm's margarine packaging that state ‘for palm oil, entire forests will be destroyed’. On the website www.theflowerfarm.nl it says that buying palm-free margarine from The Flower Farm helps against a major problem: deforestation of the rainforest. The website also states that margarine from The Flower Farm is better for the rainforest.
The complaint boils down to the objection that a one-sided, incomplete and oversimplified picture of palm oil products is being presented by The Flower Farm.
The Dutch Advertising Code Committee (“the Committee”) initially ruled that the statements of The Flower Farm give an unsubstantiated and one-sided image of the palm oil used in products other than those of The Flower Farm and the deforestation of the rainforest. The fact that The Flower Farm wants to 'wake up' consumers is no justification for omitting information about 'clean' palm oil and other causes of deforestation altogether. This is essential information that the average consumer needs to make an informed decision about a transaction (in this case whether or not to buy The Flower Farm's margarine). Omission of the essential information in the statements referred to above may lead the average consumer to make a decision about a transaction that he would not otherwise have made and constitutes deception as referred to in article 8.3 opening words and under c Dutch Advertising Code (“DAC”) and, for that reason, unfair advertising within the meaning of article 7 DAC. The Committee recommends that The Flower Farm should no longer advertise in such a manner.
The Board considers that the statements on the packaging of The Flower Farm (‘for palm oil, entire primeval forests are destroyed’) wrongly suggest that one should avoid other margarines with a view to nature conservation because of the palm oil contained therein. These statements should be considered misleading. The Board considers the statement to be misleading within the meaning of article 8.2 opening words and under b DAC instead of an omission of essential information (pursuant to article 8.3 opening words and under c DAC), as the Committee has judged. By associating other margarines on the packaging with the destruction of entire jungles as a result of palm oil as an ingredient, an advantage of the 'palm oil-free' The Flower Farm margarine is in fact suggested, namely that this margarine does not lead to such destruction. The Board therefore considers that the packaging should be modified. However, The Flower Farm may continue to mention the fact that its product does not contain palm oil, even if this is explicitly done, now that this fact is correct and does not itself lead to deception.
With regard to the other expressions ('Buying our palm-free margarine helps against a major problem: deforestation of the rainforest' and 'By Flower Farm buying/eating margarine this is better for the rainforest'), the Board also sees no reason to depart from the Committee’s opinion that the expressions are misleading. For similar reasons as stated with regard to the packaging, the Board is of the opinion that this suggests a relative advantage of The Flower Farm's margarine that does not exist in reality, which in so far as it is misleading advertising that may influence the average consumer's purchasing decision.
The Board therefore confirmed the contested decision of the Committee, either with some change of grounds.
Read the full decision here (only available in Dutch).