WORLD accepts breach of inaccurate NZ made labelling law

WORLD owner Dame Denise L’Estrange-Corbet.

WORLD accepts breach of law likely for inaccurate NZ made clothing labelling

Designer and retailer WORLD has entered into enforceable undertakings with the Commerce Commission after accepting the Commission’s view that labelling on some imported clothing was liable to mislead consumers about the place of origin of the clothing.

The Fair Trading Act prohibits businesses from misleading consumers about a product’s country of origin. The Commission’s view is that tags reading “Fabrique en Nouvelle-Zelande” (which translates as “made in New Zealand”) were likely to have led consumers to think that the garments were manufactured in New Zealand when in fact they were manufactured in China or Bangladesh.

Commissioner Anna Rawlings says that although another label was stitched inside each garment with the correct country of manufacture, this may not have been noticed in many instances and may have confused any consumers who read the label and saw that it was inconsistent with the tag.

When the error was raised in the media, WORLD immediately amended the tags on its imported garments. The Commission’s investigation has concluded with WORLD accepting the Commission’s view that its conduct was likely to breach the Fair Trading Act and undertaking to ensure that all clothing is accurately labelled in future.

In the enforceable undertakings, WORLD has agreed that it will:
• Not use any tag or labelling with the phrase “Fabrique en Nouvelle Zelande” on any imported garments.
• Implement compliance procedures to ensure any claims it makes about the origin of its products are accurate, able to be substantiated and are not capable of misleading consumers.
• Refund any customers who return the garments at issue to WORLD and who bought them under the impression that they were made in New Zealand.
Commissioner Rawlings says that if businesses label their products with a country of origin, they need to make sure the label is clear and accurate. They should also check that other labelling, imagery and packaging is not likely to give consumers the impression that the product is made in New Zealand when it is not.

“New Zealand-made products can sometimes attract a price premium when compared with similar products made overseas and their purchase can represent an important ethical choice for some consumers.”

“The truthfulness of information about country of origin is particularly important because consumers cannot check the accuracy of this kind of labelling for themselves,” she said.

Background
From 2009 to May 2018 WORLD estimates that it offered just over 1,100 t-shirts, sweatshirts and sweatpants for sale in retail stores which were manufactured overseas, but had the ‘Fabrique en Nouvelle Zelande’ swing tag. 99% of the clothing it sold during the same period was made in New Zealand.

You can see a copy of the Enforceable Undertakings on our website.

Business obligations
The Commission sent a reminder to businesses about their obligations when making ‘Made in New Zealand’ claims. You can read more and see examples of our previous country of origin cases here.
The Commission has produced a video called If you can’t back it up, don’t say it which offers guidance to traders about being able to substantiate that their claims are true.