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Supreme Court 31 October 2025

NSW Food Authority v Inside Out Nutritious Goods Pty Ltd

[2025] NSWSC 1278

Other

Citation: NSW Food Authority v Inside Out Nutritious Goods Pty Ltd [2025] NSWSC 1278
Court: Supreme Court of New South Wales
Date: 31 October 2025
Judge(s): Payne JA

Background

The NSW Food Authority prosecuted a food manufacturer, Inside Out Nutritious Goods Pty Ltd, on 10 counts under s 21(3) of the Food Act 2003 (NSW). The offences arose from the sale of incorrectly labelled milk alternative products, specifically almond milk and oat milk lines, to Woolworths stores across New South Wales between October 2022 and January 2023.

The products were potentially hazardous foods requiring continuous refrigeration below 5 degrees Celsius. Instead, their labels carried instructions designed for a separate, shelf-stable UHT product: "Once opened, keep refrigerated and consume within 5 days." The error resulted from a human mistake at the label drafting stage, where the incorrect label copy was inadvertently carried across from one product line to another and was not caught at the proofreading stage.

Inside Out self-discovered the mislabelling in January 2023 and recalled the affected products in February 2023. By that point, 177,881 of the 198,550 incorrectly labelled bottles sold could not be accounted for. The charges before the court related to 46,494 bottles sold across the ten discrete sales sequences. The company pleaded guilty at the first available opportunity.

  • What was the appropriate sentence for 10 offences under s 21(3) of the Food Act 2003 (NSW), having regard to the objective seriousness of each offence?
  • Whether the mislabelling caused, to the criminal standard (beyond reasonable doubt), a serious injury to an identified consumer, Mr Mace, who suffered botulism poisoning.
  • What discount applied for an early guilty plea entered at the first available opportunity?
  • How should the totality principle be applied to produce a just aggregate fine across 10 related offences?
  • Whether a corrective advertising order under s 132(b) of the Food Act 2003 (NSW) was appropriate.

Decision

Causation and the Mace botulism incident
The court was asked to treat a serious botulism poisoning suffered by a consumer, Mr Mace, as an aggravating factor under s 21A(2)(g) of the Crimes (Sentencing Procedure) Act 1999 (NSW). Causation in criminal law is assessed on a commonsense basis, and where a disputed fact is adverse to the accused it must be proved beyond reasonable doubt. The court was not satisfied to that standard that the mislabelling caused Mr Mace's illness. Nonetheless, the court found that bottles from the relevant sales sequence (Sequence 2) contained evidence of botulism, and that the offence therefore gave rise to a serious and unacceptable risk to human health.

Objective seriousness
The offending was inadvertent rather than deliberate, and the court assessed the objective seriousness of nine of the ten offences as below the mid-range. Sequence 2 was assessed at mid-range, reflecting the presence of botulism in bottles from that batch. The court treated the inadvertent nature of the error, the company's swift recall response, and its post-offence remediation measures as relevant to objective seriousness and mitigation respectively.

Discount for early plea and totality
A 25% discount applied for the early guilty plea entered at the first available opportunity, consistent with the principles in GAS v The Queen and related authorities. Before discounts and totality, the court assessed fines of $60,000 for Sequence 2 and $15,000 for each of the remaining nine offences, producing a gross total of $195,000. After the 25% discount, the mathematical result exceeded $146,000. Applying the totality principle, however, the court determined that the aggregate fine would be excessive for the overall criminality involved, and reduced it to $120,000.

Corrective advertising
The court also made a corrective advertising order under s 132(b) of the Food Act 2003 (NSW), requiring Inside Out, at its own expense, to publish a quarter-page advertisement within the first 12 pages of the next available edition of the Food Australia Journal.

Orders Made

  • Inside Out Nutritious Goods Pty Ltd convicted of each offence (Sequences 1 to 10).
  • Fines totalling $120,000 imposed, allocated as follows:
  • Sequence 1: $10,000
  • Sequence 2: $30,000
  • Sequences 3 to 10: $10,000 each
  • A moiety order under s 122(2) of the Fines Act 1996 (NSW) directing that 50% of the fine ($60,000) be paid to the prosecutor (the NSW Food Authority).
  • The defendant to pay the prosecutor's costs in the fixed sum of $75,000 within 28 days.
  • Corrective advertising order under s 132(b) of the Food Act 2003 (NSW): the defendant to publish, at its own expense, an advertisement of at least a quarter page within the first 12 pages of the next available edition of the Food Australia Journal (published by the Australian Institute of Food Science and Technology).

Key Takeaways

  • An inadvertent labelling error that creates a serious risk of botulism contamination still constitutes a significant regulatory offence under the Food Act 2003 (NSW), even where no deliberate wrongdoing is established.
  • Causation of personal injury must be proved to the criminal standard (beyond reasonable doubt) before it can be treated as an aggravating factor at sentence; the court declined to find that the mislabelling caused a consumer's botulism poisoning on the evidence available.
  • A 25% discount for a guilty plea entered at the first available opportunity applies in food safety prosecutions, consistent with established sentencing principles.
  • The totality principle operates to moderate what would otherwise be a mathematically derived aggregate fine, where the cumulative total would be disproportionate to the overall criminality of the offending conduct.
  • Under s 132(b) of the Food Act 2003 (NSW), courts have the power to order corrective advertising at the offender's expense, and the Supreme Court exercised that power here by directing publication in a specialist food industry journal.

Legislation and Cases Referenced

Legislation
- Food Act 2003 (NSW), ss 4, 15, 21, 118, 132, Part 9
- Australian New Zealand Food Standards Code, Standards 1.2.6(2)(b) and 3.2.2(1)
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A(2)(g)
- Fines Act 1996 (NSW), ss 4, 122(2)
- Criminal Procedure Act 1986 (NSW), ss 257B, 257G(a)

Cases
- Royall v The Queen (1991) 172 CLR 378 (causation in criminal law)
- GAS v The Queen (2004) 217 CLR 198 (early guilty plea discount)
- Elias v The Queen (2013) 248 CLR 483 (sentencing principles)
- Hili v The Queen; Jones v The Queen (2010) 242 CLR 520 (totality)
- Markarian v The Queen (2005) 228 CLR 357 (sentencing methodology)
- Mill v The Queen (1988) 166 CLR 59 (guilty plea discount)
- Nash v Silver City Drilling (NSW) Pty Ltd [2017] NSWCCA 96
- NSW Food Authority v Samaras Food Pty Ltd [2021] NSWSC 237
- Harris v Harrison [2014] NSWCCA 84
- R v Dodd (1991) 57 A Crim R 349
- R v Todd [1982] 2 NSWLR 517