New Zealand's Commerce Commission plans to prosecute juice firm Simply Squeezed, which recently signed a takeover deal with Suntory's Frucor group, over alleged breaches of the Fair Trading Act.

The Commerce Commission said today (17 July) that the case relates to alleged misleading information in a television advert for Simply Squeezed Chilled Orange Juice, which ran between March and May last year.

It plans to prosecute Brownlie Brothers Ltd, the private company which trades as Simply Squeezed. Breaching the Fair Trading Act can carry a fine of up to NZ$200,000.

News of the prosecution comes 10 days after the Commission said it had received an application from Frucor Beverages, owned by Japan's Suntory Holdings, to acquire Simply Squeezed.

A takeover deal has been agreed between Frucor and private equity firm Crescent Capital, which ultimately owns Brownlie Brothers.

Simply Squeezed is believed to have breached New Zealand's Fair Trading Act by not disclosing the use of 'pulp wash', or water extracted soluble orange solids, and the use of kinnow juice in its Chilled Orange Juice product, the Commission said.

During a Commission investigatation, the watchdog said that Brownlie Brothers confirmed that an average 60% of its product was made up of imported reconstituted fruit juice. It also contained kinnow, a citrus fruit similar to oranges found in India and Pakistan.

The Commission also warned Brownlie Brothers after it found that company sent out a price list to the on-trade last year, wrongly claiming that Simply Squeezed juice products were "100% squeezed juice".

Adrian Sparrow, director of Fair Trading at the Commission, said: ""While the presence of New Zealand and imported squeezed orange juice, imported reconstituted orange juice, mandarin juice, sucrose (sugar), preservative and vitamin C in the Simply Squeezed Chilled Orange Juice product is disclosed on the back label, the front label only has the description 'chilled orange juice'.

"The lack of specific qualifying information on the front label combined with the brand name Simply Squeezed may lead some consumers to believe that the juice product is purely squeezed orange juice when this is not the case."

Brownlie has since agreed to stop using pulp wash in its products, the Commission said.