GENUINE Australian ugg boot maker Eddie Oygur has labelled $25,200 in penalties paid by a company making its products in China as ridiculously low and “a parking fine”.
The Australian Competition and Consumer Commission this week said Ozwear Connection (Ozwear) has paid penalties totalling $25,200 after the ACCC issued two infringement notices for alleged false country of origin representations made about its “Classic Ugg” footwear range.
Between at least January and April 2018, Ozwear claimed on its website it is “100% Aussie owned” and that its “Classic Ugg” range were made using “the best materials available in Australia”, the ACCC said. Ozwear Connection is a wholesaler of footwear and accessories in Australia.
Prior to May 2018, Ozwear also attached a tag that was green and gold, shaped like a map of Australia and included the words “this exclusive premium label is uniquely Australian owned brand for authentic Australian Ugg boots”.
The ACCC considered the representations created a false impression that Ozwear’s “Classic Ugg” footwear were Australian made when, in fact, they were made in China.
ACCC deputy chair Mick Keogh said Ozwear’s conduct is unacceptable.
“Under the Australian Consumer Law, businesses are prohibited from making claims that create a false impression about products being made in Australia,” he said.
ACCC fines are “a ridiculously low penalty”
However, Sydney-based ugg boot manufacturer Eddie Oygur said although he is happy the ACCC has taken some action against Ozwear, it seemed a ridiculously low penalty.
“A fine of $25,000 is a parking fine for a company like Ozwear which has been selling significant volumes of sales of Chinese-made ugg boots to Australian consumers for many years now.
“I had been concerned about Ozwear’s labelling for some time,” Mr Oygur said.
“Their use of a swing tag in the shape of Australia, using the green and gold colours created a clear impression the minds of consumers that Ozwear ugg boots were made in Australia, particularly in the minds of tourists.
“What I’m surprised at it that the ACCC did not take more aggressive enforcement action against Ozwear given their label also said the following “This exclusive premium label is (an) uniquely Australian owned brand for authentic Australian ugg boots,” Mr Oygur said.
“It seems to me that Ozwear have been telling consumers that their ugg boots were “authentic Australian ugg boots” when in fact they are being made entirely in China.
“My other question is why didn’t the ACCC pursue a damages claim against Ozwear on behalf of all of the ugg boot manufacturers who are making the boots in Australia?
Mr Oygur said his business has lost many thousands of dollars’ worth of sales to businesses which are representing to consumers that their products are made in Australia when they are not.
“I guess I am not greatly surprised at the ACCC’s failure to take stronger enforcement action in this case given their total failure to take any enforcement action whatsoever against Deckers Outdoor Corporation a couple of years ago.
“Deckers had been selling their ugg boots under the brand name “Ugg Australia” for over 10 years after they moved all their manufacturing offshore to China,” he said.
“Despite this misleading conduct for over 10 years, the ACCC did not take Deckers to court or issue any fines against the company.”
Mr keogh said country of origin representations can be a powerful marketing tool for businesses, as many consumers are willing to pay extra for Australian made products.
“When false or misleading representations are made about a product being Australian made, consumers may end up paying more for no reason at all and businesses who are genuinely making their products in Australia lose out.
“Businesses are warned that making misleading claims or representations about a product’s country of origin will attract ACCC scrutiny and enforcement action,” Mr Keogh said.
Ozwear Connection is a wholesaler of footwear and accessories in Australia.
The ACCC has published a guidance for businesses making country of origin claims under the Australian Consumer Law (ACL).
The ACCC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain provisions of the Competition and Consumer Act 2010 (CCA) and the ACL.
The payment of a penalty specified in an infringement notice is not an admission of a contravention of the CCA or ACL.
A sample of Ozwear’s product with a map of Australia tag is below: