The $1.7 million penalty for the company that makes Nurofen does not fit its crime and should be more like $60 million, consumer advocacy group Choice says.
Reckitt Benckiser was slapped with the fine by the Federal Court on Friday after being found to have breached Australian law.
The consumer watchdog took the painkiller maker to court last year on the basis that its special products for back pain, period pain, migraines and tension headaches were chemically identical, despite packaging touting remedy for specific types of pain.
The Australian Competition and Consumer Commission (ACCC) also said the products were similar to other standard Nurofen ibuprofen products, but almost double the price.
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Choice spokesman Tom Godfrey said $1.7 million was "pocket change" for a company such as Reckitt Benckiser.
"The law needs to be changed so that courts can and will issue penalties that give companies a real headache," he said.
"If a $10 million per breach penalty had been available in this case, like it is available under parts of the Competition and Consumer Act, Reckitt Benckiser could have been facing a more appropriate fine of $60 million.
"This kind of fine is needed to send a clear signal to big business that there is no profit to be made in deceiving consumers."
Reckitt Benckiser said it had no intention of misleading consumers but acknowledged it could have done more to make packaging clear.
In his penalty judgment on Friday, Justice James Edelman noted the company has said its packaging for the Nurofen Specific Pain Range no longer infringes the law because it carries the advice "also suitable for general pain relief".
