According to Sydney dietician Dr. Alan Barclay, local distributors for companies like the Nevada-based MXI Corp which markets Xocai "healthy chocolate" can make tall health claims for food by slipping through loopholes between the legal provisions set up to protect consumers in the Therapeutic Goods Act and the Food Standards Act.
It has been found that the Xocai operation has 75,000 distributors including 620 in Australia. Further rapid expansion is planned by its founders, Jeanette and Martin Brooks whose past companies have a history of bankruptcies and a series of law suits. The Xocai operation is now under scanner by the state Office of Fair Trading.
Consumers have no quick and easy means to swiftly get information on such products' health claims, said Dr Barclay, who is a consumer representative on the Therapeutic Goods Administration advertising codes council.
The only health claim allowed for a food is about the benefits of folic acid for pregnant women in preventing their babies acquiring neural defects. Federal and state food ministers very recently rejected a tougher standard drafted by Food Standards Australian New Zealand (FSANZ), on the grounds it would cost industry and consumers too much and would be difficult to enforce. FSANZ has been assigned the task of coming up with another new standard.
According to Dr. Barclay, Australia's laws are much weaker than those in New Zealand, which names and blacklists companies that have breached tougher regulations against making health claims for food.
The Xocai health claims raise doubts whether government bodies are taking responsibility for any adverse effects of the food products marketed with false health claims, opined the director of Diabetes Services at St Vincent's Hospital, Lesley Campbell.
"Drugs are tested to the nth degree [but] these things are not tested. They're less regulated because they're food. They don't have to do anything more than register them. They don't have to have any proof [for their claims]," Leslie Campbell said.