Following intervention by the Australian Competition and Consumer Commission, Fantastic Furniture must now promote furniture covered with "leather look" synthetic fabric, or upholstery containing only some leather fibres, in a way to make it clear the products are not leather.
The ACCC has accepted court enforceable undertakings from Fantastic Holdings Limited and Fantastic Furniture Pty Ltd to resolve concerns that Fantastic Furniture and D. Gallery Pty Ltd are likely to have misled customers about the composition of the upholstery on some products.
Fantastic Holdings is the ultimate holding company of Fantastic Furniture, which owns and operates 78 furniture stores throughout Australia, and of D. Gallery, owner and operator of the Dare Gallery furniture chain.
The ACCC considers that between November 2009 and June 2010 Fantastic Furniture engaged in false, misleading or deceptive conduct by representing that certain lounge furniture promoted in catalogues, television advertisements and on its website were either wholly or predominantly upholstered in leather when they were not.
In particular, Fantastic Furniture advertised predominantly synthetic furniture, promoted as being upholstered in "bonded leather", "Eurohide" and "Pellissima", under headlines and using statements such as "The luxury of leather for less" and "Now you can enjoy the luxury of leather for less".
Materials promoted as "bonded leather" may have differing compositions but typically consist of a layer of polyurethane on the contact side backed with a fabric core and a layer on the underside of reconstituted leather or leather fibres. The leather content in Fantastic Furniture’s "bonded leather" was approximately 10 per cent.
The ACCC also considers that D. Gallery engaged in false, misleading or deceptive conduct by representing furniture as being in "bonded leather" on the Dare Gallery website in circumstances where users navigated to this description by clicking on the hyperlinks "See all leather sofas" or "See all Leather Sofa Suites".
Fantastic Furniture and/or Fantastic Holdings have provided court enforceable undertakings to the ACCC that they will:
- not use the terms "leather" or "hide" to describe upholstery that is not wholly leather without clearly disclosing the fact it is not wholly leather for a period of three years
- publish a corrective notice on Fantastic Furniture's website and at the point of-sale at each Fantastic Furniture store, and
- implement a trade practices law compliance program.
ACCC chairman Graeme Samuel said consumers seek out and often pay a premium for leather goods.
"The ACCC will not tolerate traders in the furniture or any other industry misrepresenting predominantly synthetic materials as leather.
"If a trader chooses to use terms like leather or hide to describe goods that are only partially leather then they should also clearly disclose the fact it is not wholly leather to avoid consumer confusion."