COVID-19: It's Advertising as Usual in New Zealand - Legalwise Seminars

Erich Bachmann, Managing Partner, together with Julika Wahlmann-Smith, Senior Associate and Janou Kannangara, Solicitor at Hesketh Henry, take a look into what situation advertising industry is in, given the current situation involving the COVID-19 pandemic.

New Zealand’s Advertising Standards Authority (“ASA”), the industry organisation responsible for the self-regulation of advertising content and placement across all media in New Zealand, has emphasised that there have been no changes to advertising legislation or codes as a result of the COVID-19 pandemic.

The ASA has, however, published guidance to assist advertisers with code compliance when advertising or promoting alcohol or therapeutic and health products or services during the COVID-19 pandemic. Of particular concern in the current context, is ensuring advertising is socially responsible and protects consumers from undue fear or confusion.

Advertising during COVID-19 restrictions

The New Zealand Government has created a four-level response system to combat the COVID-19 pandemic in New Zealand. New Zealand is currently at Alert Level Four, which requires all non-essential business to close and people to stay at home other than for essential personal movement. The ASA has noted that, due to wide-spread impact of the Level Four restrictions, the advertising landscape is rapidly changing. More specifically, the ASA has reported an increase in advertising of therapeutic and health products and services during this period, as well as an increase in alcohol advertising and promotion. In light of this, the ASA has published guidance to highlight that COVID-19 has not resulted in any changes to the advertising legislation or codes that advertisers are expected to adhere to in these areas.

Code compliance

In addition to the general principles and rules of the Advertising Standards Code, which are applicable to all advertisements, the advertising and promotion of alcohol is also subject to compliance with the Code for Advertising and Promotion of Alcohol. Similarly, the advertising and promotion of therapeutic and health products or services is also subject to compliance with the Therapeutic and Health Advertising Code.

Alcohol promotion and advertising

The Code for Advertising and Promotion of Alcohol requires alcohol advertisements to meet a higher standard of social responsibility as compared with other sectors of advertising. The ASA has indicated that certain advertising content and themes relating to the COVID-19 pandemic may fail to meet this high standard, particularly where alcohol is presented as a means to help manage the challenges presented by COVID-19. Examples of the types of advertising that the ASA has commented might fail to meet the required standard include advertisements that:

• encourage the irresponsible purchase or consumption of alcohol, for example, by:
• making an express or implied claim that alcohol is necessary or essential to survive lockdown or the pandemic;
• promoting drinking games to pass the time while in lockdown;
• encouraging excessive volume purchases because of limited access during lockdown; or
• make therapeutic claims about alcohol, for example, claims that alcohol:
• prevents, treats or cures COVID-19;
• is necessary to relieve anxiety, stress and depression caused by the lockdown, infection with COVID-19 or from the economic impact of the pandemic;
• improves mood or relieves boredom during the pandemic.

Advertising Therapeutic and Health Products or Services

The ASA has highlighted some specific considerations in relation to claims made by advertisers of therapeutic and health products or services regarding COVID-19. These include:

• Only products and services specified in the Medicines Act 1981 can claim to have a “therapeutic purpose” in advertisements (as that term is defined in the Therapeutic and Health Advertising Code and the Medicines Act). This includes claims that a product or service is able to test, diagnose, prevent, treat or cure COVID-19. Any therapeutic purpose claim must be able to be substantiated by the advertiser.

• It is possible for other products and services to claim to have “health benefits” in advertisements (as that term is defined in the Therapeutic and Health Advertising Code), if such claims can be substantiated by the advertiser. However, advertisements for products or services that make health benefit claims should not include express or implied references to COVID-19.

• Although not strictly a “therapeutic or health product” for the purposes of the Therapeutic and Health Advertising Code, claims in advertisements for hand sanitiser products that refer to COVID-19 or imply a reference to COVID-19 must be able to be substantiated by the advertiser, as with all advertisements under the Advertising Standards Code.

Advertisers will need to respond to a complaint alleging a claim in an advertisement is misleading by providing the ASA with substantiation for that claim. Advertisers must hold the substantiation for their claims prior to placing the advertisement, rather than assembling evidence to substantiate the claim only once a complaint is received. A written and dated record of evidence used to substantiate claims should be kept, and reviewed on an ongoing basis while the claim is being made. It is also an offence under the Fair Trading Act 1986 to make a claim that cannot be substantiated.

Erich Bachmann is the firm’s Managing Partner and works in the Business Advice team at Hesketh Henry. His principal areas of practice are corporate and commercial law, particularly in mergers and acquisitions and foreign investment. Connect with Erich via email or LinkedIn

Julika Wahlmann-Smith has advised on a wide range of corporate and commercial law issues, including reviewing and advising on commercial contracts, terms of trade and distribution agreements, mergers and acquisitions, foreign investment, advertising campaigns, consumer law, and intellectual property rights. Connect with Julika via email or LinkedIn

Janou  Kannangara graduated from the University of Auckland with an LLB (Hons) degree, and spent her final semester attending Georgetown Law’s Center for Transnational Legal Studies in London. Connect with Janou via email or LinkedIn