Warning To Souvenir Traders

Issued 27 March 2002/029

Warning To Souvenir Traders: All Star Trading Ordered To Pay $5,200 Plus Costs For “Place Of Origin” Breaches

Christchurch souvenir retailer, All Star Trading Limited, was fined a total of $5,200 in the Christchurch District Court on Monday. It admitted a total of eight breaches of the Fair Trading Act and non-compliance with the Consumer Information Standards regarding country of origin claims on t-shirts sold in its two central city stores in Christchurch.

A Commerce Commission investigation last year revealed All Star sold t-shirts on which the embroidery and neck labelling implied that the garments were made in New Zealand, when in fact they were made in Australia and China.

In addition, the t-shirts did not comply with the Place of Origin Labelling Regulations, which require place of origin labels to be accessible for examination by a prospective purchaser. On the reverse side of the sewn neck label was a statement of the actual place of origin of each t-shirt, but this was completely covered by a large price sticker.

Of the eight breaches, four related to misleading claims concerning the place of origin of the goods. The remaining four breaches were for non-compliance of the consumer information standards.

The Commission’s Director of Fair Trading, Deborah Battell, said tourists have a strong preference for purchasing New Zealand made souvenir clothing, which can command a price premium of up to 35 percent.

“It is not unreasonable for tourists to expect to buy goods in New Zealand on the basis of accurate representations,” said Ms Battell.

She added that misleading information has the potential to bring any industry, in this case the tourism industry, into disrepute.

“The actions of a few can cost the entire industry over time.”

The Commission first visited All Star Trading in May 2001, and interviewed the managing director in June. The Commission revisited the trader in August, to find the practice of placing price labels over the place of origin label was continuing.

In summing up the case, Judge Stephen Erber said the August offending was worse as the company had wilfully continued with the practice after being interviewed by the Commerce Commission. He said that deterrence in the marketplace was an important consideration.

In addition to the $5,200 total fine for the eight breaches, Judge Erber awarded solicitor’s fees of $700 and court costs of $260.

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