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Shell in court over misleading ad claims

NZ Herald

Updated 7:04 PM Monday Aug 16, 2010

Ads for oil giant Shell misled consumers by giving them the impression they could travel “appreciably further” by using the company’s petrol, a marketing expert testified today.

Shell New Zealand is defending 22 charges laid by the Commerce Commission under the Fair Trading Act.

They relate to an advertising campaign from April 2006 to May 2007 in which Shell claimed a fuel economy formula added to its petrol was “designed to take you further”.

Commerce Commission lawyer John Dixon told Wellington District Court today that the advertising made false or misleading claims, and the company had engaged in conduct that was liable to mislead the public.

A peer-reviewed study by Shell found the additive increased fuel efficiency by an average of only 0.98 percent over petrol with no additives.

That amounted to an extra 6km for every 650km travelled, or yearly savings of only about $20 if a driver spent an average of $2000 on petrol a year.

Mr Dixon said only 5 percent of petrol sold in New Zealand did not contain additives of a similar nature to Shell’s.

Otago University marketing researching Sarah Todd, a consumer behaviour specialist, said the ads gave the strong impression drivers could travel “appreciably further” using Shell’s petrol.

The court was shown a television ad featuring a skier jumping over a village, with the words “designed to take you further”.

The ad gave the impression of a huge leap forward, Prof Todd said.

A print ad suggested drivers using Shell’s petrol would have to stop for coffee breaks because they would have to stop less often for fuel.

The campaign gave “the impression of a significant benefit” to consumers but did not provide numerical evidence, Prof Todd said.

“At no stage are they given information as to what it means to them as an average driver.”

Consumers might have been given a different impression had the ads contained the figures, she said.

Shell lawyer Les Taylor said Prof Todd had “no evidence whatsoever” that the average driver would not consider the 0.98 percent efficiency increase appreciable.

Figures were not used in the ads because Shell could not guarantee how much further the average driver was able to travel, he said.

Mr Taylor questioned Prof Todd’s suitability as an expert witness, saying she was making “vague assertions” and expressing a unique opinion not based on research.

Judge Michael Behrens allowed her evidence to continue.

“An expert witness is entitled to an opinion based on their own knowledge.”

The trial is set down to continue until Thursday.

– NZPA

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