World being investigated by Commerce Commission over NZ-made claims

Monday, 14 May 2018

The Fair Trading Act prohibits businesses from making false or misleading claims about the country of origin of their products.

The Commerce Commission has opened an investigation into fashion label World after receiving a flurry of complaints about its New Zealand-made claims.

The Commission has received nine complaints on the accuracy of World's 'Made in NZ' labelling on some of its t-shirts, sweatshirts and sweatpants after it was revealed they were made elsewhere and repurposed in New Zealand.

The ensuing debate in the fashion world has prompted the commission to add a fair trading warning to others.

Commissioner Anna Rawlings said consumers were often influenced by the origin of goods when they were looking to make purchases and were entitled to accurate information from the retailer about origin.

READ MORE:

Founder or World, Dame Denise Ann L'Estrange-Corbet says World has not mislead consumers with tags stating some garments are made in New Zealand, when they are not.

* Fashion label World clothing not entirely NZ-made

Commerce Commission commissioner Anna Rawlings says country of origin claims influences consumers' decision to purchase a product.

* More complaints against World laid with watchdog over 'made in NZ' labeling

* From woke to woeful - World's explanation falls short

'Some consumers are happy to pay a higher price for goods which they believe are made in New Zealand, and for some, this represents an important ethical decision. Country of origin claims are also important for local manufacturers that want to protect the value placed on a genuinely New Zealand made product,' Rawlings said.

'Any labelling must be clear and truthful. For example, if a manufacturing process includes steps taken within New Zealand and overseas, some brands choose to explain this with labelling such as 'Packaged in New Zealand using imported ingredients'.

'For clothing, an accurate claim might say 'Designed in NZ and manufactured in China,' she said.

The Fair Trading Act prohibits businesses from making false or misleading claims about the country of origin of their products.

Symbols such as kiwis or the New Zealand flag can also convey a misleading impression about the origin of the product if, in fact, it is not manufactured or produced in New Zealand.

Whether a product is 'made in New Zealand' depends on a number of factors, including the nature of the product and what consumers understand about it.

The Commission has taken a number of country of origin cases in recent years:

- In May 2017 a health supplement company and its owner were fined more than $500,000 for claiming that bee pollen was New Zealand-made when the bee pollen was sourced from China.

- In April 2016 the High Court found that a health supplement company's'New Zealand made' claims were misleading because all the active ingredients were imported from overseas.

- Since 2011 the Commission prosecuted 11 companies and 11 individuals for selling imported alpaca rugs as 'Made in New Zealand', and/or for claiming duvets were predominantly alpaca, merino wool or cashmere when they were not.

A total of more than $1.5 million in fines had been ordered when the most recent company was fined in 2017.