An Australian consumer body took Heinz to court in 2016 over packaging claims that Shredz products, which contain fruit pastes, purees and concentrate, are healthy and nutritious for young children.
Food giant Heinz's misled consumers about the health value of Little Kids Shredz products for toddlers, an Australian court ruled on Monday, adding that the US firm should have been aware the claims were deceptive.
The Australian Competition and Consumer Commission took Heinz to court in 2016, saying images and statements on Shredz products, which contain fruit pastes, purees and concentrate, indicated they were healthy and nutritious for young children.
The national consumer watchdog said such claims were misleading as the products contain over 60 percent sugar, significantly higher than fruit and vegetables, with the Federal Court agreeing.
"Heinz ... represented that (they were) beneficial to the health of children aged 1-3 years when by reason of their high sugar content and sticky texture, the products were not beneficial," Justice Richard White said in his judgement.
He found that Heinz had "engaged in conduct which was misleading or deceptive or likely to mislead or deceive in contravention" of Australian Consumer Law.
"I am satisfied that each of the Heinz nutritionists ought to have known that a representation that a product containing approximately two-thirds sugar was beneficial to the health of children aged one-three years was misleading," he added.
The judge rejected another ACCC assertion that Heinz had claimed the products were of an "equivalent nutritional value" to fruit and vegetables and would encourage the development of healthy eating habits for children aged one to three."
Heinz Australia managing director Bruno Lino added that Heinz was committed to providing high-quality food products and to communicating clearly with consumers.
The Shredz products are no longer on sale in Australia.
The ACCC welcomed the court's decision and said it showed there were "serious consequences" to making false or misleading claims about the health benefits of products.
A date for a hearing on penalties and other orders sought by the ACCC has yet to be set by the court.
The World Health Organization recommends limiting the intake of foods containing fruit juice concentrate to reduce the risk of obesity and tooth decay.