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Rubbish bag company fined heavily over environment claims

Rubbish bag company fined heavily for misleading environmental claims
Issued 19 November 2013
Release No. 41
Eco-Pal Ltd (Eco-Pal), a manufacturer of plastic rubbish bags, has been sentenced in the Auckland District Court for environmental claims it made that breached the Fair Trading Act (FTA).

Eco-Pal has been found guilty of 15 breaches of the FTA and fined $60,000 for claiming on its bags and its website that its rubbish bags were oxo-biodegradable, biodegradable, suitable for domestic composting and for claims giving the impression of environmental friendliness. A critical aspect of the company’s advertising found to have been liable to mislead was the slogan “Here today….gone tomorrow.”

Eco-Pal sold a range of bags that contained the additive d2W that it claimed made the bags “oxo-biodegradable.” The bags were marketed on the basis that there was an environmental benefit in using the oxo-biodegradable plastic bags over conventional plastic bags. Eco-Pal’s marketing gave the impression that its products would degrade over a reasonably short time, including when disposed of in a landfill, and were suitable for domestic composting. However the claims were liable to mislead as, while it is technically true that oxo-biodegradable plastic bags can break down in the right conditions, this will not occur within a short timeframe and in a landfill it has a minimal chance of occurring at all. Further, the bags were unsuitable for domestic composting.

In August this year, Pacrite Industries Limited was fined $30,000 after pleading guilty to ten charges in relation to claims about the oxo-biodegradability and environmental friendliness of its plastic rubbish bags, marketed as “Greensac” or “The Green One”. Pacrite no longer sells those bags.

In sentencing today, Judge Hinton said Eco-Pal’s behaviour amounted to serious offending.

“There is a sure appetite for environmentally friendly products, especially those that have an everyday or frequent use. There are very good policy reasons to penalise traders who disappoint customers and take economic advantage of competitors. Well intentioned shoppers were prejudiced on a reasonably substantial scale.”

Commerce Commission Consumer Manager, Stuart Wallace, said the Commission was pleased that companies who make inaccurate environmental claims are being held accountable for the failures in their advertising.

“Environmental issues are of significant importance to New Zealanders. Advertising such as this will cause more people to buy these products in the belief they are benefiting the environment when, in fact, there is little or no benefit whatsoever.”

“Eco-Pal is the second company convicted of this type of behaviour in the last few months. Businesses must ensure that consumers are able to rely on environmental claims and are not misled by inaccurate claims,” said Mr Wallace.

Background

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 environmental claims in our fact sheet http://www.comcom.govt.nz/environmental-claims/


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