The Australian Competition and Consumer Commission (ACCC) issued an infringement notice and fined Ugg boot manufacturer Kingdom Groups International Pty Ltd (Kingdom) $10,800 for breach of the Australian Consumer Law.
The ACCC imposed the penalty after receiving a complaint from not-for-profit Australian Made Campaign Ltd, who noticed that Kingdom was selling their products online with images of the “Australian Made” label attached.
The infringement notice related to the false or misleading representations made on the seller’s website, as well as the country of origin claims associated with it. It’s important to note that the ACCC issues an infringement notice where it has reasonable grounds to believe that a business has breached the Australian Consumer Law, but paying the penalty does not mean Kingdom admits to the contravention.
What Was the Contravening Conduct?
The ACCC considered that Kingdom made misleading representations about the country of origin of its products. The investigation focussed on a product called ‘Aries sheepskin footwear’, advertised on the Kingdom website with the Australian Made logo and described as ‘truly Australian made’ manufactured in ‘Junee, Canberra, Australian Capital Territory’. This gave consumers the impression that the goods were manufactured in Australia. In reality, Kingdom footwear is manufactured in China.
Under the ACL, businesses are prohibited from making statements that are likely to mislead consumers or create a false impression. Even more specifically, it is illegal under the ACL to make misleading statements about where the goods are manufactured, that is, the country of origin. The descriptions on the Kingdom website were likely to cause consumers to think that the ugg boots were manufactured in Australia.
In addition to the claims made in writing about the country of origin, the Aries sheepskin footwear also had the recognisable Australian Made logo attached to it. For 30 years, the green and gold triangular image has been used to let consumers know that the product is Australian made.
Australian Made Campaign Limited (AMCL), a non-profit contracted by the Federal Government, regulates the use of the logo. AMCL owns the registered trade mark of the Australian Made logo. Goods linked to the logo are manufactured in Australia (not just packaged or assembled), and at least 50% of the manufacturing costs can be attributed to Australian materials or production processes.
It is not a logo that any business can attach to their products and sell, it must be done through the Australian Made campaign. Products must meet the necessary criteria and register through the AMCL.
Kingdom’s footwear products are not registered with AMCL and their use of the logo not only breached the ACL but infringed a registered trade mark. The foundation of the ACCC’s investigation and infringement notice is that Kingdom’s products wouldn’t satisfy the requirements to register the logo anyway.
Ian Harrison, Australian Made Campaign’s Chief Executive, explained that “consumers look for the Australian Made logo to identify genuine Aussie products, and Australian farmers and manufacturers rely on it to market their products, so it is of the utmost importance that we protect the integrity of the brand”. If the logo wasn’t regulated, any business could claim that its products are ‘Australian Made’ and consequently negate the effect of the endorsement.
The ACCC issues infringement notices where it has reasonable grounds to believe, but has not necessarily proven, a business has breached the ACL. Companies should ensure they know about the statements made in relation to their products or services, and through advertising. Statements that are likely to mislead consumers in relation to the quality of the goods and its country of origin contravenes the ACL and businesses can face hefty fines. Trying to improve a product’s credibility by attaching the ‘Australian Made’ logo may increase business short term, but it’s illegal and the consequences can be severe. If you have any questions about misleading conduct, get in touch with our consumer lawyers on 1300 544 755.