Invercargill health supplement firm fined $194k for misleading customers

June 22, 2020

An Invercargill health and dietry supplement firm has been fined $194,400 for mislabelling its deer velvet products.

The company - Gateway Solutions Limited, formerly trading as Silberhorn Limited - and it's director and majority shareholder Ian Carline were also found   guilty at Dunedin District Court for failing to supply information to the Commerce Commission during its investigation.

In February 2014, the Commerce Commission received a complaint alleging that Silberhorn’s deer velvet health supplements sold from March 2011 contained less deer velvet than was described on the product labels, with capsules being topped up with carob – a manufacturing aid.

The health and dietary supplement range, which included products endorsed by golfer Sir Bob Charles, were marketed as effective to support strength, activity and joint mobility.

In November 2017, the company pleaded guilty to 26 charges under the Fair Trading Act for conduct that was liable to mislead the public as to the nature or characteristics of the products, including four charges for claims made on its website.

In a statement today, Commerce Commission chairwoman Anna Rawlings said, "Products that were marketed as premium and as containing 100 per cent deer velvet or traces of carob actually contained up to a third carob. This was liable to mislead its consumers about the true composition of the products.

"Consumers had no way to determine whether the promised quantities of active ingredient were included in the capsules.

"Consumers have a right to know what they are ingesting and are entitled to trust that product labels are accurate. This is especially the case when the products claim to support health and consumers are unable to independently verify the truth of the claims made."

In a written judgment on June 8, Judge K J Phillips said the actions in underfilling the capsules were "deliberate acts” representing “a serious deficiency in the actual amount of product being supplied to the consumer”.

“It would have been impossible for Joe Bloggs, a prospective consumer, to have realised the lesser amount of deer velvet powder in the capsules he was consuming," Judge Phillips added.

“There was obstruction, unreasonable conduct and response and a total failure to comply with the information requested of the company and Mr Carline."

The Commerce Commission found the mislabelled more than 11 million capsules in the 120,000 bottles and packs had a retail value of about $5 million.

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