CGS Trading Australia Pty Ltd, importer, distributor and supplier of Aussiesox brand socks, has admitted to incorrectly labelling some of its socks in respect to fibre content.
CGS claimed a range of socks as being 'Pure Cotton' when they were not composed entirely of cotton. CGS also misrepresented that a range of its 'Cotton Rich' socks was composed of 98 or 95 per cent cotton when they were composed of no more than 84.4 per cent cotton.
Mr Won Mo Yoon, director of CGS, also admitted to the incorrect labelling by CGS. Given his direct involvement in day-to-day CGS management, Mr Won Mo Yoon acknowledges that he was knowingly concerned in contraventions of the Trade Practices Act 1974 in relation to the sale of the Aussiesox socks.
In March 2006 the Australian Competition and Consumer Commission instituted legal proceedings against another company of which Mr Won Mo Yoon was a director, H & Y Trading Pty Ltd in relation to this conduct. Subsequently H & Y's lawyers advised that the information they had previously provided to the ACCC wrongly identified H & Y as the importer and supplier of the Aussiesox socks. H & Y's lawyers confirmed that while H & Y had been the previous retailer of the Aussiesox socks, CGS had in fact undertaken the conduct which was the subject of the proceedings.
To ensure a timely resolution, the parties agreed that the matter be settled by way of court-enforceable undertakings from CGS and Mr Won Mo Yoon and the court action against H & Y be discontinued. CGS and Mr Won Mo Yoon will also make a contribution towards the ACCC costs.
CGS will:
- refrain from supplying or offering to supply socks in the future that carry false or misleading fibre content labelling and/or any other representations contrary to Part V of the Act, particularly sections 52, 53(a) and 55; and
- implement a trade practices law corporate compliance program for CGS employees and other persons involved in its business.
Mr Won Mo Yoon will, in his capacity as a director or office holder of any corporate entity he is involved with:
- refrain from supplying or offering to supply socks in the future that carry false or misleading fibre content labelling and/or any other representations contrary to Part V of the Act, particularly sections 52, 53(a) and 55; and
- ensure that these corporate entities establish a trade practices corporate compliance program.
"If a business makes strong claims as part of its labelling or promotional campaigns they must be accurate", ACCC Chairman, Mr Graeme Samuel, said today. "Consumers and honest competitors are the victims of inaccurate fibre content labels".