MAC Cosmetics and Target were in the Federal Court today after MAC claimed the retailer was selling counterfeit MAC products.
MAC undertook “extensive testing” of the products in its US laboratories and claims the MAC marked products that were, until recently, being sold at Target Australia are counterfeit.
The cosmetics company says it cannot guarantee the quality or safety of products not purchased from an authorised retailer of MAC Cosmetics.
Target Australia is not an authorised retailer of MAC Cosmetics and we did not supply any MAC products to Target Australia.
Jodie Matthews, spokesperson for MAC told SmartCompany products bought at retailers who were not authorised by MAC may not be authentic and may not meet MAC’s quality and safety standards.
“We believe Target should urgently advise their customers that the product they sold is potentially counterfeit because of the potential quality and safety concerns,” she says.
“Target should advise customers where they can buy genuine MAC Cosmetics in Australia.”
Matthews says MAC would like to work with Target and the authorities in Australia and overseas to address counterfeiting.
“We don’t know what formula they used, where they sourced their materials, where the product was made, whether and how it is tested, and that ultimately is a quality and potential health and safety risk for Australian customers,” she says.
“We also want our customers to know that MAC Cosmetics takes our commitment to deliver the highest quality products very seriously.”
Matthews says MAC spends millions of dollars in research and development so it can produce products that are safe and of superior quality.
“We employ highly qualified scientists, and meet international quality standards in all of our laboratories and production houses so our customers know we take our responsibility to customers and our reputation seriously.”
However, Megan Lane, spokesperson for Target told SmartCompany the retailer believes the MAC product supplied to Target was sourced lawfully by a domestic supplier from a legitimate MAC wholesaler overseas.
“Sourcing genuine product in this way, a process known as parallel importing, is not illegal in Australia and can result in significant savings for our customers,” says Lane.
“As a result, we can offer customers MAC products for 40% less than other Australian retailers.”
Lane says Target is aware of the allegations raised regarding the authenticity of the MAC products sold in its stores and is currently investigating, including further testing of the products by its supplier.
Before going on sale in Target stores and online, the product was tested by Target’s supplier, who provided assurance it was genuine.
“However as a gesture of good faith and to act responsibly on behalf of customers, Target removed the MAC products from our shelves and online store until further testing is complete,” Lane says.
Jane Owen, partner at the law firm Middletons, told SmartCompany if the products are parallel imports then it is likely that Target is able to sell them.
“MAC owns all its trademarks in Australia, so if the goods are genuine goods the only way it can be asserting they can’t be sold is if it has arrangements with its manufacturers that territorially affect distribution rights; so then it can run an argument like the recent Greg Norman case. Otherwise, Target is right; there is no law against parallel importation,” she says.
Owen says MAC appears to be taking the view that the infringing product is not of the same quality, which involves a claim of trademark infringement.
Parallel importation has become a growing issue in Australia and Owen says in the last few years brand owners and people with exclusive distribution rights have been trying to prevent parallel imports with varying degrees of success.
“It’s certainly very high in the consciousness of people with exclusive distribution rights in Australia, particularly so with the high Australian dollar which makes purchasing from overseas very attractive,” she says.
“There is a whole market for slightly cheaper branded product coming through secondary sources, supplying to retailers at a lower price than the official distribution channel can or will.”