Wild Nature sentencing concludes souvenir prosecutions

Wild Nature sentencing concludes souvenir company prosecutions for misleading tourists – total fines imposed reach $1 million

Media Release

Issued 12 December 2014

Release No. 60

Auckland souvenir company Wild Nature NZ Limited and its director Mr Sung Ho (Stanley) Park have been fined $243,444 and $25,000 respectively in the Auckland District Court after pleading guilty to over 30 charges of making false representations about expensive alpaca and merino wool products for sale to tour groups.

Wild Nature and Mr Park are the last of eight souvenir companies and seven directors to be sentenced after the Commerce Commission launched its investigation in 2011 with the support of Police, Customs, Immigration Service and the Wildlife Enforcement Group. Fines imposed by the court across all prosecutions now total $1.15 million.

Wild Nature faced 37 charges in total – the most of all the companies prosecuted. Mr Park was sentenced on 30 charges relating to the company’s behaviour.

Tourists from China, Korea and Taiwan from organised tour groups were ferried to Wild Nature’s premises, where they were sold “New Zealand made” Alpaca rugs – a claim that was repeated in its marketing brochures. The rugs in fact came from Peru. Wild Nature also created certificates claiming the rugs had the approval of professional entities that do not exist. It displayed the certificates in its showroom and also used one in a promotional brochure.

Wild Nature further pleaded guilty to offering duvets for sale labelled as containing exclusively or predominantly alpaca or merino wool fibre. In reality, the alpaca fibres were only a small part of the duvet mix and there was no merino wool in the merino duvets.

Tourists paid as much as $4,000 per rug ¬– up to four times more than they would have paid elsewhere for properly labelled rugs – while the duvets, made for approximately $70, were often sold for prices that varied between $400 and $1000.

Commission Chairman Dr Mark Berry said Wild Nature’s behaviour was highly calculated and the company clearly set out to deceive tourists.

“The extent to which Wild Nature worked to mislead tourists displayed a callous disregard for the law and New Zealand’s tourism reputation. They had no other goal but to rip tourists off and reap the rewards. This behaviour is damaging to our reputation as a tourist destination and also harms other law-abiding tourism businesses by association, as tourists may question who they can trust," said Dr Berry.

In September 2013, while awaiting sentencing having pleaded guilty to the charges it faced, Wild Nature entered voluntary liquidation. The Commission sought leave to continue the prosecution and while this was opposed by the liquidator, the High Court ruled sentencing should proceed. Justice Venning noted: “companies facing prosecution by regulatory authorities should not consider they can avoid the prosecution or penalty by voluntary liquidation.” The liquidator has confirmed that at the time the company was placed into voluntary liquidation, it was considered that any penalties imposed by the Court could be paid from Wild Nature’s assets.

In the Auckland District Court today Judge David Sharp said the court needed to protect the tourist industry, which is of major importance nationally, and the prosecution of Wild Nature was “an occasion where the label of fraud can appropriately be applied".

“While we are pleased that this investigation has been successfully concluded, we still have concerns about parts of New Zealand's organised Asian tour group industry. Hopefully these prosecutions serve as a deterrent to anyone who believes they can get away with fleecing tourists, but regardless the industry can be assured we will continue to target this behaviour," said Dr Berry.

The Commission is currently investigating other companies for similar conduct.

Background

The seven companies sentenced earlier in similar cases have incurred the following fines:

The six individuals already sentenced have incurred the following fines:

The Fair Trading Act

The Fair Trading Act 1986 is designed to protect consumers and make competition more effective. If competition is to be effective, consumers need to be able to rely on the information provided by companies about the goods and services they offer.

False or misleading representations can distort competition and a competitive advantage can be gained by using unfair methods. The Commission is responsible for enforcing the Fair Trading Act. You can read more about the Fair Trading Act and Country of Origin claims at:

http://www.comcom.govt.nz/fair-trading/fair-trading-act-fact-sheets/place-of-origin-representations/

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