Self-serve frozen yoghurt brands Yoghurt Story and Frozen Yoghurt Limited have been fined over misleading claims about products, including selling ice-cream advertised as frozen yoghurt.
An investigation by the Commerce Commission found Yoghurt Story had been promoting products which did not contain yoghurt.
It also made misleading claims, including that the yoghurt was probiotic and would prevent infections and lower the risk of heart disease and diabetes.
The companies, both owned by Shaun Son, were sentenced and fined in the Auckland District Court with Judge David Sharp saying the health claims were "a significant departure from the truth".
Sharp said he would have fined a total of $270,000, but because both businesses are in liquidation the fine was reduced to $35,000 each.
"The defendants' conduct was a cynical attempt to take advantage of consumers' desire to make healthier food choices," Sharp said.
"The defendants themselves considered the product to be more akin to an ice cream product, yet they decided to call their stores 'Yoghurt Story' because it was more attractive to consumers than calling it 'Ice Cream Story," he said.
"The product simply was not yoghurt. The samples taken showed the product provided rarely met with its description."
There are only 10 Yoghurt Story stores left in the country, down from a peak of about 22. About 10 of Son's entities have gone into receivership or liquidation since last year owing hundreds of thousands of dollars, and Son was bankrupted in January.
Commissioner Anna Rawlings said the case was an important one for the Commission as consumers relied on information provided by traders.
"Where health claims or claims about product composition are made, customers rely on these claims to be accurate because they are not in a position to test the claims themselves," Rawlings said.
"In this case the health claims made by the companies were not supported by scientific justification and the product was not what it was marketed to be. Yoghurt Story's conduct was misleading as a result."
In conducting its investigation, Eurofin NZ Laboratory took 17 samples of frozen yoghurt from eight different Yoghurt Story stores on different dates.
Of those samples, 15 of the 17 did not meet the Australia New Zealand Food Standards Code definition of yoghurt.