The Australian Competition and Consumer Commission (ACCC) recently reached an agreement with Pental Limited and Pental Products Pty Ltd (together, Pental) that the two companies will pay a combined $700,000 in fines relating to misleading and deceptive conduct and false and misleading representations which breached the Australian Consumer Law (Australian Competition and Consumer Commission v Pental Limited).
The outcome for Pental is a reminder that companies must ensure that claims made about their products are supported by robust evidence. This is all the more important when a product line claims to do something new or innovative. The proceeding also shows the impact that consumer advocacy groups like Choice can have in bringing products to the attention of the regulator.
The issue of flushable wipes came to the ACCC's attention after Choice made a complaint to the ACCC about Kimberly-Clark's Cottonelle flushable wipes. Choice awarded these wipes a "Shonky Award" in 2015 after conducting testing that showed that the Kimberly-Clark wipes were still holding together after 20 hours, compared to toilet paper which fully disintegrated after 2 minutes and 40 seconds. Analogous proceedings against Kimberly-Clark are set down for trial later this year.
Pental marketed its White King Power Clean Flushable Toilet Wipes as being able to be flushed down the toilet, saying that the wipes were specially designed to disintegrate in the sewerage system.
By consent, the Federal Court declared that Pental, on its packaging and websites, made three representations in contravention of sections 18, 29 and 33 of the Australian Consumer Law which prohibit false, misleading and deceptive conduct as well as representations that goods are of a particular quality, nature or have particular performance characteristics, uses, benefits or suitability for purpose.
The offending representations were that the wipes:
- were made from a specially designed material that would disintegrate like toilet paper in the sewerage system, when in fact they were not;
- had similar characteristics to toilet paper when flushed, when in fact they did not; and
- would break up or disintegrate in a timeframe and manner similar to toilet paper, which they did not.
In addition to the fines, Pental is now restrained from representing that the wipes are "flushable" either until six years from the date of the orders, or the date on which a legally enforceable code, guideline or standard in relation to the use of the word "flushable" comes into force in Australia and Pental's representations are in accordance with that code, guideline or standard.
Pental must also implement a Competition and Consumer Compliance Programme and was ordered to pay a portion of the ACCC's costs.