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A major Australian retail group has been hit with $630,000 in fines for multiple breaches of consumer law related to pandemic-related health products, including hand sanitiser with alcohol levels far lower than advertised, the consumer watchdog has announced.
Mosaic Brands Limited, an ASX-listed retail conglomerate that counts Katies, Rivers, Noni B and Rockmans among its stable of brands, has admitted to making false or misleading claims pertaining to hand sanitiser and face mask products between March and June 2020.
The deputy chair of the Australian Competition and Consumer Commission, Delia Rickard, said they were particularly concerned about the misleading claims because they were made during a global pandemic.
The fines come following tests by Choice, which found that the group was selling hand sanitiser with alcohol levels far lower than advertised.
Choice issued a complaint to the ACCC, which conducted independent tests and found “one of the sanitisers tested contained an alcohol content of 17% and another had an alcohol content of 58%, below the percentage advertised on Mosaic Brands’ websites in each case. This was also below the minimum 60% alcohol concentration recommended by Australian health authorities,” Rickard said.
In advertising these products, Mosaic used phrases including “Be prepared”, “Stock up now before it’s gone”, “Remain healthy” and “Stay safe and clean”. They also made specific references to the Covid-19 pandemic.
The Choice campaigner Dean Price said the initial testing by Choice was prompted by a supporter’s tip-off.
He praised the implementation of stricter regulations that “will make it harder for companies to repeat the mistakes of Mosaic Brands”.
In a statement, Mosaic said it agreed with and accepted the ACCC ruling, and apologised unreservedly to its customers.
“Early in 2020 wholesaler BDirect, who supply a number of large Australian retailers, sold via Mosaic Brands website a range of sanitisers and masks on the understanding that they complied with strict Australian regulations,” the statement said.
“Mosaic Brands subsequently learnt that BDirect provided misleading representation on two products, sold via the Mosaic website or substituted a small number of products with an inferior one.”
The company said the products were withdrawn from sale when the problem was identified.
BDirect has been approached for comment.
The fines are the latest development in what has been a turbulent period for Mosaic Brands.
Over the past two years, the retailer has closed more than 300 of its retail stores, with more closures to come as existing leases expire. In the 2019-20 financial year the group reported a net loss of $170m.
In a presentation to shareholders on 26 May 2021, the brand reported a return to profitability, amid rising sales and cost-cutting.
Source: The Guardian
Keyword: Australian retailer Mosaic Brands fined $630,000 for misleading hand sanitiser claims | Australian Competition and Consumer Commission (ACCC)