The Australian Competition and Consumer Commission has accepted court enforceable undertakings from The Australian Bush Hat Co Pty Ltd in relation to misleading country of origin claims made about its hats.
Between 2006 and 2009 ABHC represented that its Premium Selection and Statesman hats were manufactured in Australia when that was not the case. The hats were in fact substantially manufactured in India and imported into Australia by ABHC where they were subsequently trimmed and finished.
Tags and labels attached to the hats included the statement Manufactured in Australia from Quality Imported and Local Products, ABHC's name and a map of Australia which created the overall impression that the hats were manufactured in Australia.
The hats were sold in souvenir stalls and other outlets in Western Australia.
ABHC accepts that it engaged in misleading or deceptive conduct and made false representations about the place of origin of the hats in contravention of section 52 and 53(eb) of the Trade Practices Act 1974.
ACCC Chairman Graeme Samuel warned that businesses must take care when making claims about the origin of products.
"The Act allows companies to make the premium claim that a product is made or manufactured in Australia if it has been substantially transformed in Australia, and at least 50 per cent of the costs of manufacturing the product have been incurred in Australia," he said. "This was not the case in this instance and the work undertaken in Australia in finishing the hats appears to be mainly cosmetic."
ABHC has undertaken to:
- refrain from representing that its hats are manufactured in Australia unless they meet the country of origin test as outlined in the Act
- publish a corrective notice in the weekend edition of the West Australian offering refunds to customers who purchased the hats in the belief they were manufactured in Australia
- write to retailers asking them to return non-compliant stock to ABHC, and
- establish and implement a trade practices law compliance program.
A copy of the undertaking provided by ABHC will be available on the ACCC's website under Public registers then Undertakings register (s.87B).