'Made in New Zealand' claims "blatantly dishonest"

A clothing supplier's failure to sweep the factory floor made life easier for the Commerce Commission when it raided the company's premises following a confidential tip-off.

The contract awarded to New Zealand sports clothing supplier, Sports Resources Ltd, to supply official Olympic games team clothing to Adidas and the New Zealand Olympic Committee, stipulated that most of the clothing – including the iconic Kiwi black singlet – was to be made in New Zealand.

But, after the tip-off about a possible breach of the Fair Trading Act, the Commerce Commission executed a search warrant at Sports Resources’ South Auckland factory.  There, the Commission’s investigators found goods in their original packaging with ‘Made in China’ labels attached, clothing with ‘Made in China’ labels cut out that had been relabelled as ‘Made in New Zealand’, and literally hundreds of the cut off ‘Made in China’ labels strewn over the factory floor.  The court found the company director had instructed staff to cut out the ‘Made in China’ labels from the imported clothing and sew in new ‘Made in New Zealand’ labels.  Neither the Olympic Committee nor Adidas were in any way aware of the mislabelling, although Sports Resources had already supplied over 1,800 items of clothing to the Olympic Committee before the Commission’s raid, and several thousand more were yet to be delivered.

Sports Resources was last month fined $23,750 in the Auckland District Court for two charges of breaching the Fair Trading Act, and its company director has been convicted and discharged.  It is illegal under the Fair Trading Act to make false or misleading representations concerning the place or origin of goods.  As the maximum penalties that can be imposed under the Fair Trading Act are $200,000 per offence for companies and up to $60,000 per offence for individuals, many may consider that Sports Resources was let off relatively lightly.  This is especially so given the comment from Commerce Commission’s Director of Fair Trading, Deborah Battell that “It’s hard to think of a more blatantly dishonest act than cutting off the words ‘Made in China’ and sewing on a new ‘Made in New Zealand’ label.

The Commission ensured that all items were relabelled before being distributed to the games team.

Each year the Commission investigates a large number of complaints in relation to misleading representations about place of origin.  While the Sports Resources proceedings centred on the wording that appeared on clothing labels, firms should be aware that a false or misleading impression can also be created by the use of symbols, such as Kiwis, flags or other national emblems.

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