The Federal Court in Sydney yesterday made orders accepting a settlement reached between the Australian Competition and Consumer Commission and Woolworths Limited; Woolworths (Qland) Pty Limited; Woolworths (South Australia) Pty Limited; Woolworths (W.A.) Pty Limited; Woolworths (Victoria) Pty Limited; and Australian Safeway Stores Pty Limited in relation to the sale of children's nightclothes which did not comply with the strict mandatory standards prescribed under the Trade Practices Act.
In doing so, the Woolworths group has become Australia's first major retailer to work with the ACCC to improve its compliance with mandatory standards for children's nightwear and its recall system.
"This is the first time such a system of cooperation has been put in place in Australia and follows the action over children's sleepwear which did not comply with the mandatory safety standard," ACCC Chairman, Professor Allan Fels, said today.
The companies have admitted breaching sections 52, 53(a), 53(c) and 65C of the Act by selling and offering for sale six styles of children's nightclothes.
Under the terms of the settlement the companies have agreed to injunctions preventing further sale of the products concerned. They have also given undertakings to the court to:
- appoint an independent external investigator to report to Woolworths and the ACCC on how the contraventions occurred and who was responsible;
- identify necessary modifications to Woolworths quality assurance, warehouse, inspection and product recall procedures;
- routinely submit all new product lines of children's nightclothes to Woolworths quality assurance department for testing and certifying compliance with the standard;
- routinely test representative samples of each batch of imported children's nightclothes for compliance with the standard;
- revise existing inspection and product recall procedures in consultation with the Commission;
- B7 review their trade practices compliance system to the ACCC's satisfaction within three months; and
- pay the ACCC's investigation and legal costs.
"The ACCC regards compliance with mandatory consumer product safety standards, including the children's nightclothes standard, as vital," Professor Allan Fels, said. "The ACCC will continue its policy of vigorously enforcing serious breaches of the mandatory standards under the Trade Practices Act.
"In this case the ACCC is pleased that throughout this matter, Woolworths has pursued a cooperative approach in its dealings with the ACCC. After the Commission queried one item with it, Woolworths tested its entire children's nightclothes range and as a precaution recalled a further 23 products which may not have complied with the mandatory standard. All of these products were voluntarily recalled.
"Pursuant to the undertakings given to the court, Woolworths and the ACCC will be working together to improve Woolworths' systems for the testing of children's nightclothes and for product recall.
"Although Woolworths has for many years had a system of checking for compliance with this standard, it is quite clear that its systems were not fool proof. When human errors of this sort can get through its clearly time to revisit the controls the companies have in place. The aim of the review is to minimise the likelihood of such a problem occurring again, and at the same time to maximise the speed and efficiency with which products are removed from sale and recalled.
"This process is being assisted by an independent investigation being conducted into all the circumstances surrounding the breaches," he said.
" Anyone who has bought children's nightclothes from Woolworths, Safeway, Crazy Prices, Flemings, Food for Less, Roelf Vos or Purity Supermarkets in the past six to 12 months should check the in-store signs to see whether the garment is covered by the recall."