The Australian Competition and Consumer Commission has sent a strong warning to wool brokers and private merchants today that misleading and deceptive conduct will not be tolerated after it successfully obtained injunctions against former wool broker and private merchant, Port Adelaide Wool Company Pty Ltd*, and its Managing Director, Mr John Sinclair, plus costs of $100,000.
It was further agreed that Port Adelaide Wool Company and Mr Sinclair would pay compensation of $35,000 to wool export company Bloch & Behrens Pty Ltd.
In separate negotiations substantial compensation was agreed to be paid to wool export company Unilan (Australia) Pty Ltd.
In the Federal Court today, Port Adelaide Wool Company admitted that it supplied wool to Unilan Australia and Bloch & Behrens which had different characteristics or specifications from those set out in Australian Wool Testing Authority certificates it had obtained and forwarded to those companies. In particular, Port Adelaide Wool Company admitted:
there were differences of up to 2.6 microns (micrometres) between the mean fibre diameter or fineness of the wool ordered and the wool actually supplied; and the differences were not related to the sampling or testing of the wool by AWTA.
Additionally, Mr Sinclair admitted that he directed and controlled the entire operation of the company and was responsible for:
all matters involving the purchase, storage, sale and transportation of wool; and deciding what bales of wool would be combined to form interlots to be supplied to customers.
The ACCC instituted injunction proceedings against the parties in March 1995 alleging that Port Adelaide Wool Company had engaged in misleading or deceptive conduct in breach of the Trade Practices Act, 1974 and that Mr Sinclair was knowingly concerned.
Today the Federal Court granted the ACCC permanent injunctions against Port Adelaide Wool Company and Mr Sinclair restraining them from supplying wool that does not comply with previous representations or statements as to quality and composition. Injunctions were also granted restraining Port Adelaide Wool Company and Mr Sinclair from engaging in conduct that is misleading or deceptive in connection with the supply of wool.
"This type of conduct compromises the integrity of certified test results used in sales transactions and has the potential to cause irreparable damage to Australia's reputation in the international wool industry," ACCC Chairman, Professor Allan Fels, said today.
"It could undermine the very basis on which the Australian clip is marketed to overseas customers, namely, sight unseen selling of wool based on certified testing of key wool characteristics."
"Within the international wool industry, Australia is recognised as being the largest producing and exporting country with an outstanding reputation for the quality of wool produced. In 1994/95 Australian wool exports were worth approximately $3.4 billion and represented five percent of total merchandise exports."
"The ACCC has an important responsibility to ensure that companies do not mislead their customers in ways which could damage such a valuable export industry."
* Port Adelaide Wool Co Pty Ltd is not related to Adelaide Wool Co Pty Ltd of 133 Bedford Road, Gillman, Adelaide.
