UPDATE: HEINZ had threatened to sue Dick Smith over claims made on his company's beetroot tins.The company said the wording of a label on Smith's Magnificent Sliced Beetroot constituted "injurious falsehood''.
The label said: "When American-owned Heinz decided to move its beetroot processing facility from Australia to New Zealand causing hundreds of lost jobs, we decided enough is enough. So we are fighting back against poor quality imported product”.
Heinz demanded Mr Smith re-label his cans or face Federal Court action.
Heinz wrote to Mr Smith, claiming the label mislead consumers to think hundreds of jobs had been lost, and that NZ products were of poorer quality than Australian products.
Heinz declined to comment on job losses.
Mr Smith released the letter from Heinz during a rally of dairy farmers at Tongala in the Goulburn Valley.
He said he stood by the claims, but said the cost of legal action and of relabelling the product would send his company broke.
This is the second beetroot blow for the entrepreneur in the past 12 months, after buying one of the only remaining beetroot farms in the country.
The farm had been forced to plough its crop back in early last year after struggling with competition from cheap imported produce, and Mr Smith believed he could save it.
But once the crop was harvested and tinned, Coles and Woolworths did not want the beetroot, and Mr Smith was left with 100,000 tins he couldn’t sell - even after offering to sell it for 90 cents a tin.
Heinz Australia corporate affairs manager Andrew Hewett said Heinz took exception to the inflammatory nature of the comments made on the label.
"Heinz believes that the statements were either incorrect or misleading,'' Mr Hewett said.
"We found it unfortunate that in order to try and promote sales of his own products, Dick Smith felt the need to reference other brands in the market rather than relying on the attributes of his own products.
Mr Hewett said in an effort to effectively gain free advertising for his own products, Dick Smith chose to forward a private letter to the media.
"Heinz accordingly wrote to Dick Smith, privately, pointing out the errors and contextual issues associated with the statements,'' he said.
Mr Hewett said Heinz stood by the decisions it made in relation to the manufacture of beetroot and also the quality of its products.
"We take pride in the quality of our products, and our support of Australian manufacturing, employing more than 1200 people Australia-wide,'' he said.
"We will continue to view this as a private matter between Heinz and Dick Smith and treat it accordingly.
"We are not interested in furthering Dick Smith's efforts to gain publicity and therefore will refrain from making any further comments.''