Misleading green claims on plastic bags cop fines

Press Release – Commerce Commission

A manufacturer of plastic rubbish bags has been fined $30,000 in the Auckland District Court for breaches of the Fair Trading Act in relation to environmental claims that were liable to mislead.Misleading green claims on plastic bags cop fines

30 August 2013

A manufacturer of plastic rubbish bags has been fined $30,000 in the Auckland District Court for breaches of the Fair Trading Act in relation to environmental claims that were liable to mislead.

Pacrite Industries Limited pleaded 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”. The claims were made on the bags themselves, the company’s website, in brochures provided to retailers and in media releases.

Pacrite claimed the bags, which contain an additive that makes them oxo-biodegradable, were better for the environment than conventional plastic bags, and its advertising stated or implied the bags would oxo-biodegrade in a landfill.

However, a Commerce Commission investigation found that while it is technically true that oxo-biodegradable plastic bags can break down in a laboratory the representation that the bags would undergo this process in the real world was liable to be misleading. This is because the bags, used for household rubbish, would predominantly end up in landfills and, once covered over, the vast majority of bags will not oxo-biodegrade because the process relies on sufficient oxygen to break down the bags.

In sentencing Pacrite today Judge Collins said traders who wish to market their products based on environmental advantages have a responsibility to ensure the product can live up to the claim.

Judge Collins said Pacrite’s whole branding was based on the product’s environmental advantage. He noted that although he did not know how many people bought the product because of the branding, environmental issues are increasingly important to society and consumers.

Commerce Commission Head of Investigations Ritchie Hutton said the Commission was pleased with the outcome.

“New Zealanders care about their environment and will be influenced by marketing claims of environmental benefits. It is important that consumers are able to rely on those claims and are not misled by untrue claims.”

“These rubbish bags are not markedly better for the environment than conventional bags. The only way that they can break down, as claimed by Pacrite, is if they are left lying around above ground, exposed to oxygen, or, potentially, if they remain in the surface layers at the landfill,” said Mr Hutton.

The bags are no longer being manufactured.

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/

ENDS

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