A major Australian men's accessories company has admitted labelling belts as leather when, in some cases, the belts contained no leather at all.
A. Royale and Co (Aust) Pty Ltd has offered the Australian Competition and Consumer Commission court-enforceable undertakings in which the company undertook to:
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not to breach section 52 (misleading conduct provision) of the Trade Practices Act 1974 for all products supplied by it for a period of five years
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to publish corrective advertisements advising consumers of the incorrect labelling of belts and offering refunds to all affected consumers
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to implement a trade practices compliance program.
"A. Royale has been involved in the manufacture and importation of men's belts since 1998", ACCC Chairman, Professor Allan Fels, said today. "It buys the belts overseas according to specifications it supplies then distributes the finished product through retail stores in Australia and New Zealand.
"In June 2000 the New Zealand Commerce Commission began an investigation into a complaint about the labelling of belts imported and supplied by A. Royale to Kmart stores in New Zealand. In particular, it was alleged that a belt labelled 'leather' was in fact it was made of bonded or reconstituted leather and other materials and contained no genuine leather.
"On 10 August 2000 A. Royale’s lawyers wrote to the ACCC advising it of the NZCC investigation and advised that:
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since 1998 it had labelled belts imported by it, and comprised of a combination of leather and/or reconstituted or bonded leather, and other non-leather components, as being 'leather' belts
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the belts had been imported into Australia and distributed by A. Royale to Kmart and Big W throughout Australia since early 1998
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all remaining stocks of the incorrectly labelled belts were withdrawn from sale by A. Royale on 14 July 2000.
"Tests of belts sold in Australia showed that some which were described as 'leather' contained no genuine leather and in others had just over 25 per cent genuine leather. Between going on sale in 1998 and the recall on 14 July 2000, Kmart and Big W stores sold a total of 454,603 of the incorrectly labelled belts.
"Trade associations do not consider bonded leather to be leather. An imported belt that contains less than 50 per cent genuine leather should not be labelled as being 'leather' under the Commerce (Import) Regulations. "The ACCC is concerned about the extent of the misleading conduct involved in this matter and the belief by A. Royale executives that this was industry practice.
This case should warn distributors of any manufactured item that they should ensure that goods are properly labelled so as not to mislead customers. "The ACCC has accepted undertakings in this instance because A. Royale brought the matter to its attention and immediately withdrew and relabelled all offending belts. Any rival of A. Royale that believes it may also be breaching the law in this regard should check its stock as soon as possible.
The ACCC may take a less lenient view of any similar breaches of the Act that come to its attention".