ACCC takes Woolworths to court over misleading environmental claims

Eco lineConsumer watchdog ACCC has taken action against Woolworths in the Federal Court.

ACCC said today in a statement it is alleging that the environmental representations Woolies made about its ‘W Select eco’ picnic products were false, misleading or deceptive, in contravention of the Australian Consumer Law.

“At Woolworths, we’re committed to doing the right thing for the environment and continue to work hard to drive initiatives that help both us and our customers minimise our impact on the environment,” Woolworths spokesperson told Inside FMCG.

“We treat our obligations under the Australian Consumer Law very seriously, and understand how important it is that environmental claims are clear and accurate for our customers. Following enquiries from the ACCC, we took the precautionary step of voluntarily withdrawing the products from sale in November 2017 so that we could carefully consider the concerns raised. We are now in the process of reviewing the ACCC’s claims and considering our next steps.”

From November 2014 to November 2017, Woolworths labelled disposable bowls, plates and cutlery in its ‘W Select eco’ line as ‘Biodegradable and Compostable’. The ACCC alleges that by these labels Woolworths represented to consumers that the products would biodegrade and compost within a reasonable period of time when disposed of in domestic compost bins or conventional landfill sites in Australia. The consumer watchdog also alleges the supermarket giant failed to make reasonable or adequate efforts to substantiate these biodegradability and compostability claims.

“Customers paid a premium because they rightfully thought the environmental claims would have been substantiated,” ACCC commissioner Sarah Court said.

“The ACCC also alleges that Woolworths made these claims in circumstances where it was aware there was confusion among consumers and businesses about the meaning of biodegradable and compostable.

“One of the suppliers of the W Select eco line also had significant qualifications on its website about the biodegradability and compostability of its products. Despite all these matters, Woolworths made the representations without explanation or qualification.”

Woolworths said the products were released in 2014 and independent certification was provided. All products in the range were made from materials derived from corn starch or sugarcane and other natural materials.

ACCC also alleges that Woolworths acted contrary to its own Environmental Claims Policy, which stated that: ‘Environmental claims must be accurate, specific and clear; apply to a real environmental benefit; not overstate a benefit and be articulated in plain language.

“Businesses making environmental claims about their products must take reasonable steps to ensure the benefits are achievable for ordinary Australian consumers,” Court said.

The supermarket giant added there is currently no mandatory Australian standard on how claims in relation to biodegradability and compostability must be conveyed to customers. It is keen to support the development of a mandatory Australian standard to improve consistency and consumer understanding of environmental labelling across the retail industry.

Furthermore, Woolworths also said it continues to work hard on delivering the company’s commitments.

“Woolworths Group’s 2020 Corporate Responsibility Strategy, we set six sustainability targets, including a specific commitment to ‘Improve the recyclability of our Own Brand packaging and contribute to the circular economy.’” Woolworths spokesperson told Inside FMCG.

The ACCC is seeking pecuniary penalties, injunctions, declarations, publication orders and costs.

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