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Frozen yoghurt franchise taken to court over alleged false health claims

  • News
  • December 3, 2015
  • Elly Strang
Frozen yoghurt franchise taken to court over alleged false health claims

The charges fall under the Fair Trading Act and were brought against Yoghurt Story New Zealand and Frozen Yoghurt by the Commerce Commission.

The Commerce Commission was unable to make further comment about the matter while it’s before the court.

Yoghurt Story has 11 stores across New Zealand. It describes its products on its website: “Frozen yoghurt is not simply yoghurt that is frozen! Yoghurt Story yoghurt is carefully developed to contain beneficial bacteria for better digestion and overall good health – with Yoghurt Story probiotic yoghurt your stomach will thank you.”

The Food Standards Australia New Zealand (FSANZ) code states that fermented milk drinks and yoghurt products must contain at least a million live bacteria per gram.

From January 2016, companies need to notify the FSANZ about their yoghurt claims and have evidence, including human studies, to back them up.

As of October 30, no submissions for probiotic health claims had been made by a New Zealand company to the Ministry for Primary Industries.

Registered nutritionist Bronwen King said to Stuff calling products served at frozen yoghurt places “yoghurt” requires a stretch of the imagination.

She said there was little milk in each product, while sugar quantities were high.

“I would hate to think that parents would think such a product [froyo] could have health properties as, at best, it is little more than a high sugar, artifically flavoured frozen product,” she said.

In Europe, companies are banned from using the word “probiotics” on packaging, as the Europe Food Safety Authority found none of the claims made by companies about probiotics were correct.

Aside from issues with health claims, the public’s interest in yoghurt stores seems to have fallen by the wayside.

The company at the centre of the court case, Yoghurt Story New Zealand, was put into receivership in August and appointed a liquidator this month.

It is 100 percent owned by Frozen Yoghurt, whose sole director is Taewoon Son.

When New Zealand’s first frozen yoghurt store called KiwiYo opened in Mission Bay in 2012, self-serve frozen yoghurt was a smash hit. The shop regularly had queues out the door.

The company rapidly expanded and in 2013, was planning on growing its store count to 26 and even opening small-scale versions of the store in smaller towns called KiwiYo Express.

It was also exploring opportunities to open its stores in China, Korea and Vietnam as recently as 2014.

However, interest seems to have dipped in fro-yo. To date, KiwiYo has 11 stores open in New Zealand. Stores in Manukau and on Wellesley St East have recently closed down.

In a column on frozen yoghurt retailers, RCG’s Paul Keane touched on the issue of fads versus success stories.

He said, “What you often see in the early growth stages, especially for franchised businesses, is some very over-optimistic claims about how much the business or store network is going to grow.”

Keane used the example of Australian fro-yo operator Yo-Get-It, which said in 2013 it had plans to take its eight stores to over 100 stores over the next three years.

Seven months after its bold prediction, its store numbers went from eight to seven. At present, it has thirteen stores.

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