By Pattrick Smellie
Oct. 26 (BusinessDesk) - New Zealand clothing manufacturer and retailer WORLD has avoided prosecution under the Fair Trading Act by agreeing to stop labelling clothing made offshore to appear as if it was made locally.
The Commerce Commission announced the agreement with WORLD, which was revealed in May to have been selling Bangladeshi-made garments with a prominently displayed 'swing-tag' label that said "Fabrique en Nouvelle Zelande", French for 'Made in New Zealand'.
It transpired only the tags were made in New Zealand. While other less prominent labelling identified Bangladesh as the country of manufacture for the clothes, the commission said WORLD had accepted that "some imported clothing was liable to mislead consumers about the place of origin of the clothing". WORLD has made "enforceable undertakings" to stop the practice.
That is a change of tune since May, when co-founder Denise L'Estrange-Corbet vigorously defended the use of the misleading labels and sought to characterise The Spinoff website's original report on the practice as an example of the New Zealand "tall poppy syndrome" at work.
Her reaction sparked a second round of backlash against a brand that has prided itself as a champion of ethical business practices and, as the commission noted today, manufactured 99 percent of its clothing in New Zealand during the period 2009 to May 2018 - the period during which WORLD said an estimated 1,100 foreign-made t-shirts, sweatshirts and sweatpants were sold.
WORLD's undertakings mean 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; and 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".
Enforceable undertakings are one of a number of options available to the commission to enforce the provisions of the Fair Trading Act, including prosecution.