What is a false and misleading claim? ACCC’s appeal on “flushable” wipes

The case of ACCC v Kimberly-Clark Australia Pty Ltd [2020] FCAFC 107 (ACCC v Kimberly-Clark) is a reminder that companies must be aware of their obligations under the Australian Consumer Law (ACL) when making claims about their products.

In this case, the Full Federal Court dismissed an Australian Competition Consumer Commission (ACCC) appeal alleging false and misleading representations made by Kimberly-Clark Australia Pty Ltd (Kimberly-Clark) in relation to the “flushability” of their wipes.

Background

In December 2016, the ACCC initiated proceedings against Kimberly-Clark and Pental Products Pty Ltd (Pental), arguing that both companies had made false and misleading representations about their wipes in contravention of the ACL. While Pental conceded the ACCC’s allegations, Kimberly-Clark did not.

The ACCC argued that by describing and advertising their wipes as “flushable”, Kimberly-Clark had misled consumers as to the suitability of their wipes because they caused harm to sewerage systems.  Specifically, the ACCC argued that rather than being required to establish that the wipes did in fact cause or contribute harm to sewage or plumbing systems, it merely had to prove that there was a “real risk” that the wipes could cause or contribute harm to household sewerage or plumbing.

The Court found that while the wipes did not disintegrate as quickly as toilet paper, given the “element of resilience” with which sewerage systems are designed they were still able to be flushed down the toilet. Ultimately, the ACCC failed to demonstrate that the risk was materially greater than the risk posed by toilet paper.

Takeaways

The fact that Kimberly-Clarke had met guideline requirements and performed additional testing on their products heavily influenced the Court in both decisions.

This is an important reminder for suppliers and manufacturers in respect of the claims they make about their products. If claims as to the durability, substance, or nature of goods are made, then products should be thoroughly tested to ensure that these claims are supported.

However, this is not to be confused with the Courts recognising and permitting general “puffery”, being exaggerated, subjective statements that no reasonable persons would believe to be true.

If you require advice in relation to your obligations under the ACL or would like us to review marketing representations, please do not hesitate to contact:

Paul Gray
Principal
T: 03 5225 5231
E: pgray@ha.legal

Alexander Gulli
Lawyer
T: 03 5226 8573
E: agulli@ha.legal

This article was prepared with the assistance of Hugo Le Clerc, Graduate Lawyer.