Methven Limited, a company that manufactures and supplies bathroom fittings, has pleaded guilty to nine breaches of the Fair Trading Act for misleading consumers about the potential savings gained when using the Satinjet shower product range. Methven has been fined $50,000 and ordered to pay court costs in the Waitakere District Court today.

Between May 2008 and February 2009 Methven undertook an extensive advertising campaign which claimed that significant savings for both hot water energy and total water use could be achieved by installing a Satinjet showerhead with a 9 or 14 litre flow restrictor, compared with conventional showers.

However, a Commerce Commission investigation found that approximately 60 per cent of New Zealand showers already flow at a rate of nine litres per minute or less, meaning those households would not have achieved any of the claimed savings by installing a Satinjet showerhead with a 9 or 14 litre flow restrictor. While households with showers operating at flow rate of above nine litres per minute would have achieved some savings, only those households with showers operating at or above 20 litres per minute flow would have achieved significant savings.

In sentencing Methven today, Judge Callander noted that the representations in the Satinjet ads involved "more than carelessness" and could be objectively seen as "deliberate".

Judge Callendar noted that Methven had a previously unblemished record under the Fair Trading Act but said the claims as to savings were "clearly false at least in the extent that those claims applied to ordinary households."

Greg Allan, Commerce Commission's Enforcement Manager, Wellington said, "Many consumers make decisions on what products to purchase based on what is good for both their budgets and the environment, sometimes choosing to buy more expensive products if they believe that they will make savings in the longer term. So consumers can make informed decisions, businesses must ensure that any claims they make are accurate and not misleading."

"While a minority of New Zealand households, particularly those with mains water pressure systems, may have seen savings using Methven's Satinjet products, the promotion of the products implied savings for most consumers."

"It is important that businesses clearly disclose any important or qualifying information so that consumers have all the necessary details to be able to make an informed decision. Many consumers are probably not aware of the per minute flow of their household water and so would have incorrectly presumed that they would have made the savings promised," said Mr Allan.

"While Methven did change the wording of the advertising once they were aware of the Commission's investigation, there was still potential for competitors to be disadvantaged and consumers misled," said Mr Allan.

Background

Methven Limited designs, manufactures and distributes showers, tapware and valve products. The Satinjet shower range was launched in 2004.

The Commerce Commission has issued guidelines on green marketing and a fact sheet on the Fair Trading Act and environmental claims.