A businessman whose company has been fined $25,200 for allegedly misrepresenting a range of ugg boot products as Australian-made claims he’s the victim of an ACCC “witch hunt”.
Jason Zhang, the owner of footwear manufacturer Ozwear Connection, was issued two infringement notices over claims his business created the false impression its ugg boots were made in Australia when they’re actually manufactured in China.
The competition and consumer watchdog alleges between January and April 2018, Ozwear claimed on its website its ugg boots were “100% Aussie owned” and made using “the best materials available in Australia”.
A green and gold paper tag shaped like Australia was also attached to the boots, with the description “this exclusive premium label is the uniquely Australian owned brand for authentic Australian Ugg boots”.
Zhang does not deny the products are manufactured in China but said the claims made on Ozwear’s website highlighted by the ACCC are accurate and he provided the ACCC with “substantial evidence”.
“They were on a witch hunt and looking to bully a small Australian business to pay hefty fines and tarnish us with the same brush as the real shonky operators out there,” he said in a statement provided to SmartCompany on Wednesday.
“We feel we have been let down by the very system that is set out to protect us all.”
The ACCC confirmed one of the infringement notices related to representations made on the Ozwear website, while the other related to the tag attached to the ugg boots.
Zhang says he provided the ACCC with evidence the sheepskin used in Ozwear’s ugg boots is Australian and his business is Australian-owned.
“I am an Australian Citizen, and I am proud of my Sydney-based Australian company, I have worked very hard on this business,” Zhang said.
“We simply believe that stating facts is not a crime.”
Ozwear made changes to its website earlier this year in response to ACCC inquiries, and it’s current ‘about us’ page does not include the term “Australian” in the main body of text.
Ozwear also created new product tags which are circular and include a different description.
But Zhang said this was done to appease the “ideology” of the ACCC, as his products include country of manufacturer labels.
The ACCC did not respond to questions about whether Ozwear had made any factually incorrect statements or the degree to which each of the statements highlighted in its release weighed on its decision.
ACCC deputy chair said on Thursday Ozwear’s conduct is “unacceptable” and businesses doing similar things were on notice.
“Country of origin representations can be a powerful marketing tool for businesses, as many consumers are willing to pay extra for Australian-made products,” he said.
“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,” Keogh said.
Law not limited to “explicit statements”
Commercial lawyer Richard Prangell, director at Viridian Lawyers, says misleading product representation isn’t limited to “explicit statements”.
“A business may mislead the public by creating an overall false impression of a product without having made any particular statements at all,” he tells SmartCompany.
“It seems pretty clear in this case the retailer was either intentionally testing the boundaries of those rules or was reckless to them.
“Business owners should also be aware there are no ‘loopholes’ or ‘magic words’ that can get you around these prohibitions in a retail context, and no amount of ‘fine print’ can overcome an overall impression to the contrary,” Prangell says.
The ACCC secured a $10,800 fine against Kingdom Groups International, which trades as Aries Sheepskin, in 2016, over a similar case.
Koala Jack also fell victim to ACCC scrutiny in 2013 for claiming its ugg boots were made in Australia when they were made in China.