A number of recent cases highlight the importance of ensuring the accuracy of country of origin claims. Sounds simple enough, but consider products constituted by ingredients from various countries, assembled in another country by a company owned elsewhere. As demonstrated by the cases below, false claims relating to a product’s country of origin can result in a breach of the Australian Consumer Law (ACL).
The ACL prohibits businesses from engaging in misleading or deceptive conduct, or in conduct that is likely to mislead or deceive. The breadth of this prohibition extends to businesses making claims about their product’s country of origin, or making representations that may create an overall impression that their products are made in a particular country.
New ‘safe harbour’ provisions in the ACL relating to country of origin claims and the ACCC’s release of its Country of Origin Claims Guide (Country of Origin Guide) have brought this issue into focus. The ACCC’s Country of Origin Guide assists businesses in determining the boundaries of compliant country of origin representations. However, as we will see from the cases below, even when a business avoids making express statements about their product’s country of origin, their claims can still create false impressions in breach of the ACL.
Birubi Art distributes Australian Aboriginal related products, such as boomerangs and didgeridoos, featuring designs associated with Aboriginal art. Birubi’s products featured words such as ‘Aboriginal Art’, ‘genuine’ and ‘Australia’. The products were made in Indonesia. In a Federal Court decision, Birubi was found to have made false and misleading representations about its products. The Court found there was an overwhelming impression that the products were made in Australia and hand painted by Australian Aboriginal persons when this was not the case. A hearing on penalties will occur at a later date.
Ozwear is the owner of the ‘Classic Ugg’ footwear range. Ozwear made claims on its website about its Ugg range, including that it was ‘100% Aussie owned’ and the Uggs were made using ‘the best materials available in Australia’. An Australia-shaped tag was also affixed to the products. The products were made in China. The ACCC considered the representations created a false impression that the products were Australian made and issued two infringement notices to Ozwear totalling $25,200.
Nature’s Care Fish Oil and Vitamin D
Nature’s Care is the manufacture of soft gel fish oil and vitamin D capsules. Nature’s Care’s fish oil and vitamin D capsules are made from substantially imported ingredients which are encapsulated in Australia to create the end product: a soft gel capsule containing the imported ingredients.
Earlier this year, Nature’s Care re-applied for a licence from the Australian Made Campaign (AMC), the licensor of the ‘Made in Australia’ kangaroo logo, to continue to use the ‘Made in Australia’ logo on its fish oil and vitamin D capsule product. The AMC rejected Nature’s Care’s licence renewal application. The rejection was consistent with recent country of origin guidelines relating to complementary healthcare products published by the ACCC. These guidelines indicated that the ACCC would not consider the process of encapsulating ingredients to be a ‘substantial transformation’ of the product for the purposes of ‘Made in Australia’ labelling under the ACL.
Nature’s Care commenced proceedings against the AMC seeking declarations that the process of encapsulating its ingredients in Australia meant its product was last ‘substantially transformed’ in Australia, permitting the use of the label ‘Made in Australia’.
The Federal Court found that, consistent with the ACCC’s view, Nature’s Care’s process of encapsulating the ingredients in Australia did not fundamentally change the identity, nature or essential character of the product. Accordingly, the product could not be regarded as having been ‘substantially transformed’ in Australia for the purposes of the ACL and Nature’s Care was not entitled to use ‘Made in Australia’ labelling on its product.
This article is provided by way of general information only and is not legal advice. Always obtain your own independent legal advice tailored to your business’ particular circumstances before making decisions relating to the legal issues referred to above. In this regard, we’re here to help.