The Federal Court in Adelaide has declared that Goody Environment Pty Ltd engaged in misleading and deceptive conduct and made false representations about 'Goody' branded plastic bags.
From at least May 2009 Goody claimed that its 'Goody' branded plastic bags were biodegradable and compostable in accordance with the Australian Standard* and could be legally supplied in South Australia, when this was not the case because the bags:
- contained the heavy metal Molybdenum in amounts that exceeded the maximum concentration prescribed by the Australian Standard, and
- did not biodegrade, disintegrate, or compost in accordance with the criteria prescribed by the Australian Standard.
Goody has undertaken to the court to refrain from making representations that plastic shopping bags promoted by or supplied by Goody, or on behalf of Goody, are biodegradable or compostable in accordance with the Australian Standard unless it has first obtained independent scientific testing of the actual plastic shopping bags which confirms that the bags do, in fact, meet the Australian Standard.
In late December 2010, Justice Lander declared, by consent, that Goody contravened sections 52 and 53 of the Trade Practices Act 1974** and ordered Goody to:
- publish corrective notices on its website and in The Advertiser newspaper
- implement a Trade Practices Compliance and Education Program, and
- contribute $65,000 to the ACCC's costs of the proceedings.
In taking court action the ACCC considered there was likely to be significant detriment if the bags continued to be supplied to the market. This includes considerable competitor, consumer and environmental detriment as well as undermining current government initiatives in relation to plastic bags.
Acting ACCC chairman, Michael Schaper said businesses must ensure biodegradable or recyclable claims can be substantiated and are appropriately qualified so as not to mislead consumers.
"Environmental claims are powerful selling tools as many purchasers want to do the right thing for the environment. It is important that they are given accurate information and can feel confident in the purchasing decisions they make," Dr Schaper said.
"The ACCC will continue to scrutinise such claims and take action where necessary to protect consumers," Dr Schaper said.
The ACCC's proceedings against Nupak Australia Pty Ltd, the distributor of the bags, were finalised by consent on 13 October 2010 (News Release 234/10, issued 27 October 2010).
The ACCC has published an information sheet regarding biodegradable, degradable and recyclable claims regarding plastic bags which can be found on the ACCC website.
*Australian Standard AS4736-2006 for Biodegradable plastics suitable for composting and other Microbial Treatment.
**On 1 January 2011 as part of Australian Consumer Law amendments the Trade Practices Act 1974 was renamed the Competition and Consumer Act 2010.
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