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Kiwi clothing brand under fire: ComCom warns businesses about "Made in NZ" claims

15 May 2018

Clothing brand WORLD is under investigation by the Commerce Commission regarding the accuracy of its t-shirt labelling.

The Commission received nine complaints regarding the “Made in NZ” label on WORLD’s t-shirts.

As a result, the Commission is warning all businesses that all claims they make about their products must be accurate, able to be substantiated and must not mislead consumers about the country of origin.

The Commission reminds all businesses that the Fair Trading Act (FTA) prohibits businesses from making false or misleading claims about the country of origin of their products.

Commissioner Anna Rawlings says consumers will often be influenced by the origin of goods when they are considering whether to buy something and are likely to – and are entitled to – rely on the information provided by the retailer about origin.

“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.”

Rawlings says country of origin claims are also important for local manufacturers that want to protect the value placed on a genuinely New Zealand made product.

In addition, the Commission also produced a video, back in called “If you can’t back it up, don’t say it”, which offers guidance on false, misleading and unsubstantiated misrepresentations, and how to avoid them.  

In the video, former Fair Go presenter, and current senior communications adviser at the Commerce Commission, Gordon Harcourt, states, “It’s an offence to make a representation, a claim, that’s unsubstantiated, that’s a claim you don’t have reasonable grounds to make. You can’t back it up.”

“For example, a heat pump supplier made claims about the efficiency of some of its heat pumps, but it couldn’t back it up. It was fined $125,000 for unsubstantiated representations, and $185,000 more for other misleading claims.”

In the past, the Commission has taken on a number of other country of origin cases, including a health supplement company that was fined more than $500,000 for claiming their bee pollen was New Zealand-made when, in fact, it was sourced from China.

Since 2011, the Commission has 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.

The commission also offered some examples to help explain how the meaning of “made” can vary depending on the product:

  • For a clothing item, where is it changed from fabric into a garment?
  • For a food item, where were the ingredients grown?
  • For a manufactured product, was it substantially manufactured in NZ? Where was the primary componentry made? Were any substantial stages of manufacture conducted offshore?

“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’,” Rawlings adds.

“For clothing, an accurate claim might say “Designed in NZ and manufactured in China.”

“Any labelling must be clear and truthful.”

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