A. Royale & Co (Aust) Pty Ltd - s.87B undertaking

A. Royale & Co. (Aust) Pty Ltd ("A. Royale") is one of the leading suppliers of belts in Australia. In 1988 it began to import belts comprising a combination of leather and/or reconstituted or bonded leather and other non-leather components. It labelled these belts as leather, even though some of the belts contained less than 50% genuine leather. Figures provided by retailers indicate that over 454,000 incorrectly labelled belts were sold in a two year period before they were recalled by A. Royale. In June 2000 the New Zealand Commerce Commission began an investigation into a complaint made to it about the labelling of a belt imported into New Zealand by A. Royale. In August 2000 A. Royale informed the Commission of the NZCC investigation.

A. Royale has accepted that it may have engaged in misleading or deceptive conduct in breach of section 52 of the Trade Practices Act 1974 and falsely represented that goods were of a particular quality or composition in breach of section 53(a) of the Act. Accordingly, it has given the Commission section 87B undertakings to:

• not again engage in conduct in contravention of sections 52 or 53(a) of the Act in relation to all products supplied by it for a period of five years;
• publish corrective advertisements advising consumers of the incorrect labelling of belts and offering a refund to all affected consumers; and
• implement a trade practices compliance program.