Design firm accepts breach of law likely for inaccurate labelling

29 October 2018
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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 says tags reading “Fabrique en Nouvelle-Zelande” 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 while another label was stitched inside each garment with the correct country of manufacture, this may not have been noticed and may have only confused any consumers.

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.

Ms Rawlings says 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.”

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.