Federal Court finds "Green" claims to be misleading

11 November 2003

The Federal Court, Sydney has found that Sanyo Airconditioners Manufacturing Singapore Pte* Ltd, trading as Sanyo Airconditioning Australia, engaged in false, misleading and deceptive conduct over advertising of air-conditioning units it supplied.

Sanyo Airconditioning Australia's promotional brochure for the Eco Multi Series air conditioners, which was distributed to businesses and consumers, from about May 2002 to July 2003, contained environmental marketing claims, such as "environmentally-friendly HFC 'R407C' Added" and "for a new ozone era - keeping the world green".

The ACCC instituted proceedings against Sanyo Airconditioners Manufacturing Singapore Pte Ltd alleging it had contravened the Trade Practices Act 1974 by making false, misleading and deceptive representations about the environmental benefits of the gases used in its air conditioning units, namely the hydroflurocarbon (HFC) refrigerant R407C and the hyrdochloroflurocarbon (HCFC) refrigerant R22.

The court declared that Sanyo Airconditioning Australia's brochure was misleading and deceptive in breach of section 52 of the Trade Practices Act 1974, and contained false and misleading representations in breach of 53(c) of the Act, in representing that its air conditioning units were environmentally-friendly when in fact:

  • R-407C employed in its air conditioning units is a powerful greenhouse gas which contributes to global warming, and does not benefit the environment and
  • R-22 employed in its air conditioning units is a powerful greenhouse gas which contributes to global warming, is an ozone depleting substance, and does not benefit the environment.

The court also ordered that Sanyo Airconditioning Australia:

  • be restrained from engaging in similar misleading conduct in its future promotional activities
  • write to businesses and consumers who were supplied the brochure and also members of the Airconditioning Refrigeration Equipment Manufacturing Association enclosing the Federal Court's orders and the agreed Statement of Facts
  • implement a trade practices compliance program and
  • pay the ACCC's costs.

The court orders were made by consent of the parties.

"This outcome sends a warning to businesses attempting to promote their products or services using misleading environmental claims", ACCC Chairman, Mr Graeme Samuel, said today. "Environmental claims, including those in the form of statements, logos and images, must be accurate, clearly identify the environmental benefit to which the claim refers, and must be verifiable.

"Environmental marketing claims are an important marketing tool in the air conditioning industry, as well as in other industries. In light of the court's orders, extra care should be taken by businesses intending to promote the environmental aspects of their products or services to accurately specify the environmental benefits claimed.

"During the course of its investigation the ACCC was informed of similar environmental claims being made by other air conditioner manufacturers both domestically and internationally. Accordingly, the ACCC would call on other air conditioning manufacturers to review their advertising to ensure that their environmental claims are accurate and verifiable", Mr Samuel said.

Release number: 
MR 235/03
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