An ex officio investigation of announcement made by Triko Foods Co., Ltd. for any violation of the Fair Trade Law

Chinese Taipei

Case:

Key Words:

False advertisement, food safety, fruit jelly

Reference:

Fair Trade Commission Decision of December 15, 2005 (the 736th Commissioners' Meeting); Non-disposition

Industry:

Wholesale of Other Food Products and Groceries (4429)

Relevant Laws:

Article 21 Paragraph 1 of the Fair Trade Law

Summary:

1. Triko Foods Co., Ltd. (hereinafter referred to as Triko) published an announcement on page A1 of China Times on March 28, 2005, stating as “Our Company has carried out a comprehensive improvement on Domestic “Sheng Hsiang Jen” fruit jelly products since we have acquired the authorized use of the aforementioned brand. The products are now conforming to the Food Safety Regulation of the U.S. Food and Drug Administration (FDA) and the inspection standards of Chinese Taipei Consumers’ Foundation. Thus, consumers can enjoy the products at ease now.” The mass media reported later that Chinese Taipei Consumers’ Foundation (hereinafter referred to as Consumers’ Foundation) had presented a clarification that the said Foundation had never announced any report of “Sheng Hsiang Jen” stating that fruit jelly products have met the standards of inspection. Therefore, the Fair Trade Commission (FTC) has initiated an ex officio investigation on the advertisement at issue published by Triko on newspaper for a violation of the provision of Article 21 of the Fair Trade Law.
2. Upon investigation, the FTC found that:
1. With regard to the statement “has carried out a comprehensive improvement on Domestic “Sheng Hsiang Jen” fruit jelly products”:
   1. It was found that this advertisement was published because of news coverage on an accident in which a child of Taiwanese businessman living in Shanghai choked to death while eating Sheng Hsiang Jen fruit jelly. In response to this coverage, Triko made this announcement and gave clarifications. Triko explained that the phrase “comprehensive improvement” mentioned in the statement “has carried out comprehensive improvement on Domestic “Sheng Hsiang Jen” fruit jelly products” referred to the Company’s decision of not producing anymore “conical fruit jellies with a diameter of 3cm and a weight of 16 gm per jelly” since December 2004. Beginning from December 23, 2004, the Company has produced “new rectangular fruit jelly product with a weight of 26 gm per jelly”. Such explanation is believable. Moreover, Sheng Hsiang Jen has sold fruit jellies with a diameter of 3cm in Domestic for many years; the ordinary consumers can distinguish the original fruit jellies with a diameter of 3cm from the improved rectangular fruit jelly products easily when they pay ordinary attentions. It is unlikely for consumers to mistake the original products for those referred to in “carried out comprehensive improvement on products” stated in the advertisement. Therefore, it is still not substantiate to conclude that Triko has made false or misleading representation according to the available evidences.
   2. In addition, Triko did not announce in the advertisement that it has recalled all conical fruit jellies with a diameter of 3cm and a weight of 16 gm per jelly. On March 30, 2005, Bureau of Food Sanitation, Department of Health had specially called together all fruit jelly makers to discuss about the enhancement of fruit jellies management. A self-disciplined mediation committee and the fruit jelly makers had concluded a pledge of self-disciplined. Triko has conformed to the management of Bureau of Food Sanitation and the pledge with the self-disciplined committee. Beginning from March 30, 2005, Triko has devoted more efforts to recall the konjac jellies with a diameter of less than 3.1cm that may still be on the market. A total of 58.9 metric ton of konjac jellies with a diameter of less than 3.1 cm recalled from the market were destroyed on May 25, 2005. The acts of Triko in complying with the self-discipline guidelines of the Department of Health were sufficient to reduce the doubts of consumers in the safety of the mini one-bite jellies.
2. With regard to the statement “conforming to the Food Safety Regulation of the US Food and Drug Administration (FDA)”: Triko explained that the US FDA conducted spot check on all imported foods at the time of custom clearance. Every imported product must be checked in its first importation and thereafter, only random spot check will be conducted. The U.S. import declaration system is indeed linked to the computer system of the customhouse. The FDA conducts spot check through the aforementioned system and issues a release notification to an importation that meets its standards. The custom clearance for an importation of a batch of goods can only be completed upon the receipt of the release notification. On October 5, 2001, the U.S. FDA issued an import alert stating that the import of “mini-cup type jelly” from all countries was restricted. The U.S. Custom will detain any round or round-like products with a sectional diameter less than or equal to 1.75 inches or non-spherical products with a diameter less than or equal to 1.25 inches. The “rectangular fruity coconut jelly with a weight of more than 26gm per jelly” exported by Triko to the U.S. on November 11, 2004 had passed the FDA’s inspection. The documents for U.S. import clearance and release notification from the FDA were issued for the said export and Triko has successfully sold jelly products to the U.S. again. The export declaration of Triko, the importation documents of the U.S. Customs and the release notification of the FDA are enclosed for examination. Therefore, the announcement of Triko that the goods in this investigation “have conformed to the Food Safety Regulation of the US Food and Drug Administration (FDA)” is verifiable.
3. With regard to the statement of “conforming to the inspection standards of Chinese Taipei Consumers’ Foundation”: The inspection committee of Consumers’ Foundation presented an experimental comparison for the product at issue in Consumer Report, volume 216, April 1999. The said comparison report had conducted investigations and tests for jelly products sold on the market. Then, based on the principle of impartiality, objectivity and fairness, the investigated products were evaluated according to the committee’s “examination standards. In addition, the Foundation has also presented suggestions to the industry, briefly stated as; “enhance the warning labels, strengthen the cover of jelly package so that the children cannot open it easily on their own, the size of a jelly be designed into not less than two bites and be packed in a polyhedron and broad edge container.” On October 14, 2004, the Consumers’ Foundation examined the fruit jelly on market again and announced consumer news on its website on October 15, 2004. The suggestions similar to those in the Consumer Report, volume 216, April 1999 were presented. Presently, there is no regulation on the sizes of food packaging in Chinese Taipei. In accordance with the report of comparison tests on jelly products and suggestions for the industry made by the Consumers’ Foundation, Triko has made improvement on the fruit jelly products. The original “conical fruit jelly products with a diameter of 3cm and a weight of 16 gm per jelly” were changed to “new rectangular fruit jelly products with a weight of 26 gm per jelly (not round or round-like shape)”; and the warning labels on fruit jelly products were enhanced. Therefore, the company’s announcement of “conforming to the inspection standards of Chinese Taipei Consumers’ Foundation” is verifiable. Hence, it is not substantiate to conclude that Triko has made false and misleading representation.
3. To sum up, it is still not substantiate to conclude that Triko’s announcement in the newspaper that “Our Company has carried out comprehensive improvement on Domestic “Sheng Hsiang Jen” fruit jelly products since we have acquired the authorized use of the aforementioned brand. The products are now conforming to the Food Safety Regulation of the US Food and Drug Administration (FDA) and the inspection standards of Chinese Taipei Consumers’ Foundation. Thus, consumers can enjoy the products at ease now” has violated the Fair Trade Law according to the available evidences.

Summarized by Lin, Shu-Ling;
Supervised by Yeh, Tien-Fu