Blackmores has been publicly shamed, on China’s annual Consumer Rights Day for violating the Chinese government’s strict “truth in advertising” laws. The vitamin company was fined approximately $69,000 for claiming online and in stores that it was Australia’s top nutritional supplement brand, and that its vitamins could treat cardiovascular disease and assist the treatment of arthritis. You can watch the ad here at the Sunday Morning Herald: http://www.smh.com.au/video/video-news/video-world-news/the-ad-that-cost-blackmores-69000-20170316-4rskz.html
What exactly did they do?
After being called out on China’s annual Consumer Rights Day, Blackmores is slapped with a $69,000 fine for claiming to be Australia’s top nutritional supplement brand. The Blackmores fine was revealed in state media reports, timed for China’s Consumer Rights Day, which listed 11 companies found guilty of violating the advertising law.
- Lawyers observed that four of the 11 were fined for using superlative words, and Blackmores’ problem was claiming to be Australia’s number one.
- Apparently, nutritional supplements are classified as ordinary food and Blackmores had claimed its ingredients could prevent or cure disease – with an illegal use of prohibited words.
How have Blackmores responded?
A Blackmores Asia spokesman said the statements featured in the marketing material were “factually correct and used in our international promotional program”. He continues, “At the time, there were uncertainties in the market about the new advertising law and we were unaware that language used was no longer allowed.”
- “As soon as we were made aware of the breach we removed the materials and the online posts where they were referenced.”
- “In recognition our our swift action and compliance with the AIC’s investigation, the penalty was reduced to the lowest level according to the penalties prescribed by the Advertising Law.”
- The spokesman then concluded that Blackmores had since strengthened its procedures and all advertising claims were subject to legal review.
What can you learn from all this?
Chinese intellectual property lawyers noted that since the fines for using superlative words in advertising were increased in 2015, companies have been monitoring rivals’ websites and reporting alleged violations to Chinese authorities.
- After a boom in demand from Chinese consumers for Australian vitamins in 2015, Blackmores is facing a hotly contested market, which has seen the acquisition of other foreign rivals by Chinese companies.
- Because of this, big namesake brands or rising brands that could possibly pose a threat to other competitors have been targeted, with Blackmores and other brands like Nike and Japanse retailer Muji being some of the more major ones this year.
- Because of this, Consumer Rights Day has become a prominent national media event on March 15 each year through an annual TV program is broadcast in which major brands are shamed.
As such, for businesses seeking to advertise and expand in China, they must be aware of the fact that there will be competitors looking for any edge they can, and as such, these brands (especially larger ones) must be doubly strict on ensuring that all of their actions and campaigns are completely legal and valid.
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