Library

Don't say it if it isn't true

25 Jun 2007

A leading sport wear manufacturer in New Zealand was recently fined over $23,000 for cutting labels incorporating the words “Made in China” off New Zealand Commonwealth Games uniforms, and replacing them with “Made in New Zealand” labels. Not only was the company, Sports Resources Limited itself fined, but the company director was also convicted under the Fair Trading Act.

This case highlights how important it is for all traders in the apparel industry to ensure their labelling complies with all laws.  If they don’t comply the New Zealand Commerce Commission (or its Australian counterpart, the ACCC) can bring action under the Fair Trading Act (FTA) in New Zealand and the Trade Practices Act (TPA) in Australia.  Disgruntled customers or competitors might also complain or take action. If the company and directors are found guilty, they can face criminal liability and significant fines.

Clothing labelling laws

Clothing labelling laws ensure all clothing is clearly and correctly labelled.  The laws are designed to protect consumers, who can be influenced in their buying decision by what a garment is made from, whether it is easy to care for and where the garment was made.

It is the responsibility of all manufacturers and retailers to ensure the garments they are selling comply with all necessary standards.

In Australia and New Zealand there are labelling standards clothing manufacturers and retailers must comply with.  These include:

1. country of origin
2. fabric care
3. fabric fibre content

Country of origin standards

Country of origin labelling standards require articles of clothing and footwear to be labelled or marked to show the country in which they were made or produced.  In New Zealand, this is compulsory.  In Australia, country of origin labelling is not compulsory, but if a manufacturer chooses to use country of origin labelling on products, the label must not be misleading or deceptive.

Fabric care standards

Manufacturers, importers, wholesalers, distributors and retailers must ensure the garments they are selling comply with care labelling standards in both Australia and New Zealand.  The purpose of these standards is to give customers, dry cleaners and launderers information on how to care correctly for the garment.  They also allow potential buyers to assess how much it is going to cost to care for the garment when they buy it. 

The standard dictates specific words, phrases and symbols that must be used. 

Fabric content standards

Apparel items must also contain labelling specifying the content of the various fibres the garment is comprised of. 

The standard describes two different ways fibre content can be specified and how the product must be labelled.  There are also directions on how the fibre content can be assessed.

The ACCC and Commerce Commission have pursued several cases over the last few years against manufacturers and retailers selling garments that are labelled with misleading or deceptive fibre content labels.  For example:

• The importer of AUSSIESOX branded socks was prosecuted for falsely labelling some of its socks as “Pure Cotton” when they were only 84.4% cotton.
• Two companies that imported Ugg boots with 100% WOOL LINING were prosecuted when it was discovered the lining was 99.5% polyester and 0.5% polypropylene.
• A company selling “100% polypropylene” thermal underwear was prosecuted as the garment contained a small percentage of another fibre.  Because the company claimed it was 100% when it was not, their actions were considered misleading and deceptive.

All apparel manufacturers and retailers should own current editions of the various Standards.  These can be purchased from the ACCC in Australia and obtained from the www.standards.co.nz website in New Zealand.

Emma McBride
Associate, A J Park Auckland
emma.mcbride@ajpark.com
DDI +64 9 353 6809

An edited version of this article was published in Apparel magazine June 2007