Product Labelling & Packaging Compliance under ACL

18 September 2025 in Commercial Lawyers | 5 min read | skip to FAQs

The Australian Consumer Law (ACL), found in Schedule 2 of the Competition and Consumer Act 2010 (Cth), provides a robust framework for consumer protection, particularly in relation to product labelling and packaging. Central to this is Section 18 of the ACL, which prohibits any conduct in trade or commerce that is considered misleading or deceptive conduct, or likely to mislead or deceive the consumer.

The primary legislative purpose is to promote informed commercial activities that are grounded in accurate information rather than misinformation (see Bullabidgee Pty Ltd v McCleary [2011] NSWCA 259). This article specifically explores the protection under section 18 of the ACL concerning product packaging and labelling.

Understanding section 18 protection

The key aspects of section 18 of the ACL can be summarised as follows:

Conduct

Section 18(1) of the ACL applies to a wide range of “conduct,” which includes but is not limited to ‘representations’. The conduct that falls within the section are to be determined objectively, having regard to all contextual circumstances in which the conduct occurred (see Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60).

Misleading or Deceptive

The phrase ‘likely to mislead or deceive’ does not require the proof of actual deception, only the potential for the conduct to be misleading or deceptive. As such, the test applied is whether an ordinary or reasonable person within the relevant class to which the conduct is directed would likely to be misled.

Trade and Commerce

The prohibitions in section 18 apply to conduct ‘in trade or commerce,’ meaning activities that inherently have a commercial character. As clarified by Dowsett J in Hearn v O’Rourke [2003] FCAFC 78, “[T]he focus must be upon the conduct in question and not upon the range of activities in which a relevant corporation may be engaged”.

Applicability

Section 18 is not limited to consumer claims; it also applies to competitors, manufacturers and any party affected by misleading or deceptive conduct in a commercial context. This broad applicability underscores the provision’s role in protecting public interest as well as private business dealings.

Damages

For the conduct to be actionable under section 18, the conduct must result in some losses or damages to the applicant. A direct causal link between the misleading or deceptive conduct and the damages suffered must be established.

Interaction with Other Provisions

Section 18 can operate alongside other causes of action or legislation, including common law torts like passing off, trade mark infringement under the Trade Marks Act 1995 (Cth) and breach of contract claims.

While a breach of section 18 does not result in criminal liability, the Australian Competition and Consumer Commission (ACCC) can pursue representative proceedings and seek orders under Part 5-2 Division 5 of the ACL if a business fails to comply with its obligations under the ACL.

Misleading or Deceptive Conduct in Product Labelling

Labelling plays a crucial role in how consumers perceive products, and inaccuracies in labelling is a common issue that can lead to misleading or deceptive conduct under section 18 of the ACL.

Inadequate labelling

Products that are inadequately labelled can mislead consumers. However, not all omissions are considered deceptive; a product labelling will not be deemed as misleading or deceptive merely because it does not include every possible detail describing the attributes or characteristics of the product (see SC Johnson & Son Pty Ltd v Reckitt Benckiser (Aust) Pty Ltd [2012] FCA 1266).

A notable case of inadequate labelling leading to ACL contraventions is ACCC v Cadbury Schweppes Pty Ltd [2004] FCA 516, where the court found the labelling of a cordial depicting fruit to be misleading, as there was no actual fruit extract in the product, despite the label clearly stating the contents were cordial.

Absence of Warnings

Further, the absence of necessary warnings on product labels may also lead to misleading or deceptive conduct under section 18 of the ACL. In Hampic Pty Ltd v Adams [1999] NSWCA 455, a cleaning product label was found to be misleading for failing to warn users about the dangers of using it without gloves and for lacking first aid directions.

Origin Labelling

Misleading conduct can also occur if products are falsely labelled as originating from one country when they are actually made elsewhere.

In Siddons Pty Ltd v The Stanley Works Pty Ltd [1991] FCA 116, the court found that labelling products as “Stanley Australia” was misleading or deceptive because the steel used in making the product was imported, despite substantial manufacturing taking place in Australia. Sections 255 and 258 of the ACL were referenced in determining whether a product has been made in or produced in Australia. In this case, the respondent was held liable for misleading or deceptive conduct by using the words “Stanley Australia” on product packaging.

In relation to food labelling, the ACL provides specific guidance on origin labelling under the Country of Origin Food Labelling Information Standard 2016, effective from 1 July 2018.

Other Labelling Obligations

This article focusses on Section 18. Other labelling obligations exist in particular labelling obligations exist in particular industries pursuant to specific legislation such as the Food Standards Australia New Zealand Act 1991 (Cth), the Food Act 2003 (NSW), Food Regulation 2015 (NSW), similar ads apply in other states. The Commerce (Trade Description) Act 1905 (Cth) for imported goods, Therapeutic Goods Act 1989 (Cth) for goods for therapeutic use, Industrial Chemicals Act 2019 (Cth) and Consumer Goods (Cosmetics) Information Standard 2020 (Cth) made pursuant to the ACL and are beyond the scope to this article.

Misleading or Deceptive Conduct in Product Packaging

Packaging is another critical area that has potential for misleading or deceptive conduct to occur. The design and presentation of packaging must not misrepresent a product’s attributes or characteristics in a manner likely to mislead or deceive consumers (See SC Johnson & Son Pty Ltd v Reckitt Benckiser (Aust) Pty Ltd [2012] FCA 1266)

Moreover, packaging that closely resembles a competitor’s product can also be considered misleading, even if the packaging correctly identifies the source. For instance, in Sterling Winthrop Pty Ltd v R & C Products Pty Ltd [1994] ATPR 41-308, the court issued an injunction against a competitor who introduced a rival product named “PINE ACTION” in packaging that closely resembled the established “PINE-O-CLEEN” product.

Similarly, in Telmak Teleproducts (Aust) Pty Ltd v Coles Myer Ltd [1989] ATPR 40-966, Coles Myer was found to have breached ACL by selling frypans in packaging that closely resembled that of a competitor.

Key Takeaways

The ACL, particularly section 18, provides strong and comprehensive protection against misleading or deceptive conduct in Australia, covering a wide range of issues from product labelling to packaging. Businesses are legally obliged to ensure that their conduct, including how they present products through labels and packaging, is clear, accurate and not likely to mislead or deceive consumers or related parties. Failure to comply cannot only lead to potential damage to the business’s reputation but may also expose the business to risks of substantial penalties from the Australian Competition and Consumer Commission (ACCC).

How Can BSM Sydney Lawyer assist you?

Brander Smith McKnight’s business and commercial lawyers have special expertise in handling consumer law cases, whether you are a consumer, corporate entity, or a manufacturer.

To ensure your business adheres to all Australian Consumer Law requirements, contact our experienced Sydney lawyers for a comprehensive review of your practices. We offer tailored advice on packaging and labelling, assessing your proposed business strategies and advising on potential legal risks under consumer law regarding misleading and deceptive conduct. If you are a consumer seeking protection and legal support regarding your rights under Australian Consumer Law, Brander Smith McKnight law firm Sydney will provide the best course of action specific to your circumstances. Our business and commercial lawyers offer a free 20-minute consultation to assess your matter.

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