What can I state on my labels?

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Dr John – the Chemist

Labels are considered advertising by most authorities.

We live in a highly competitive world and any entrepreneur with an idea for a personal care product is always looking for a way of differentiating themselves from the mundane or ordinary. Once the selection of hero ingredients is made the attention then moves to the transmission of features and benefits to the end user. There are several pathways for the dissemination of product information but primarily it will be by the products label. The general concept is that to give a product the best chance of success the label needs to portray benefits to the end user that are different or superior to other similar products. This is where some entrepreneurs find themselves in contravention of regulations around labelling and advertising. Claims that could not be easily substantiated could be deemed to be misleading by the authorities. The Therapeutic Goods Administration (TGA) and the Australian Competition and Consumer Commission (ACCC) both regulate the labelling of therapeutic goods and cosmetic products in Australia. Essentially both regulators set out to ensure that consumers are not misled. The interpretation of both sets of legislation is where most people fall foul of the law.

Why do some companies flout the law?

Unfortunately, there is an extremely high motivation for entrepreneurs to push the regulatory envelope as far as they can. The perception is that the greater or more novel the claim is, the better the product will be received by consumers. This is not actually true, while the initial sales may be good for a novel product, non-performance to the label claims will be soon found out by an increasingly informed consumer.

So, what are the limits?

It may seem logical to most that outrageous claims which set out to cure an incurable condition or to reverse ageing or stating the product contains something it does not is misleading. Not many would understand that the term “fearing a migraine” or “fearing head lice” is misleading under the TGAC and is not allowable because it sets out to alarm and instil fear in consumers. Similarly, exaggerated claims and inducements are illegal under the act. In contrast the prevention of cancer, a seemingly large claim, is quite acceptable for sunscreens of high SPF value. The regulations are extensive and offer a minefield to the uninitiated, so it is strongly recommended that a regulatory review be conducted before product launch.

The consequences of non-compliance.

If a label claim is deemed to be a threat to the health or safety of consumers then a recall will be ordered by the regulator. Small non-safety-based transgressions attract stern “cease and desist” letters and even publication of the company’s details on the regulator’s website. Large fines for corporations that ignore warnings are commonplace.

How are claims reviewed?

Therapeutic claims are reviewed in the context that products with low level claims require low levels of evidence. Even so the evidence must be from several corroborative sources or be based on substantial traditional evidence, anecdotal evidence is usually not acceptable because of a natural in-built bias. Sometimes all that is required is a certificate, in the case of sunscreens an SPF evaluation by an independent researcher. The golden rule is that big claims need big evidence, claims to cure or alleviate a condition or illness will usually be required to show at least three independent clinical studies.

Are cosmetic claims treated differently?

Claims on cosmetic and personal care products are not as strictly monitored as therapeutic goods. However, he ACCC has a history of taking court action over such claims as “all natural” when in fact they are not, the definition of the term natural is not as liberal as you would think. Cosmetic and personal care label should still be reviewed for accuracy. Nebulous claims such as “may help reduce the signs of premature ageing” are sufficiently non-specific. Terminology is everything and ultimately advertising will be judged on what was intended to be conveyed to the consumer.