ACCC (the Australian Competition and Consumer Commission) has instituted legal proceedings against Goody Environment Pty Ltd and Nupak Australia Pty Ltd.
The ACCC alleged that the companies engaged in misleading and deceptive conduct and made false representations regarding 'Goody' brand plastic bags, in contravention of the Trade Practices Act 1974. The action concerns alleged representations by Goody Environment and Nupak that 'Goody' brand plastic bags, containing an additive supplied by Goody Environment and distributed by Nupak, were biodegradable and compostable in accordance with the Australian Standard AS4736-2006 for Biodegradable plastics suitable for composting and other Microbial Treatment and could be legally supplied in South Australia.
The ACCC alleged that these 'Goody' brand plastic bags did not satisfy the Australian Standard's requirements as to biodegradability, disintegration and concentration of toxic or hazardous substances.
The ACCC seeked orders including:
• corrective advertising by Goody Environment and Nupak on their websites and in newspapers
• the publication by Goody Environment of a notice in a relevant magazine informing the public of the court orders
• letters to be sent by Nupak to its customers advising of the court orders
• the implementation of a trade practices law compliance and education training program by Goody Environment and Nupak
• findings of fact
• declarations that Goody Environment and Nupak contravened the Act
• injunctions including interim injunctions to restrain Goody Environment and Nupak from continuing to make these representations, and
• ACCC's costs.
The directions hearing was in Adelaide on the 15th of July and in response, Nupak has undertaken to refrain from making representations to the effect that 'Goody' plastic bags:
a. comply with the Australian Standard*;
b. comply with the requirements of State Legislation which proscribes the sale of plastic 'singlet' shopping bags; or
c. are biodegradable or compostable in accordance with the Australian Standard,
unless Nupak has first obtained independent scientific testing which substantiates such representations.
Nupak has also undertaken to send a letter to each Nupak customer supplied with Goody plastic bags informing them of the ACCC's action, the allegations and the undertakings by Nupak. The hearing of the ACCC's application for interlocutory relief against Goody Environment has been set down for 23 August 2010.