Another New Zealand office furniture company has been fined for breaching the Fair Trading Act for claiming in advertising brochures that two models of office chairs were made in New Zealand.

Auckland based Eden Office Seating pleaded guilty to three charges and was fined $5,000 and $2,500 court costs in the Auckland District Court.

In November 2008 identical penalties were also imposed on two other office chair manufacturers for also making 'New Zealand made' claims that breached the Fair Trading Act. These were Lower Hutt based Dawell Furniture Co and Auckland based Damba Furniture.

In all three cases, although the chairs were designed and assembled in New Zealand, apart from the foam for the seat and back and some fabrics, all other components were sourced from overseas.

"These cases, along with the earlier Knights Office Products case, reinforce the importance of businesses ensuring accuracy of 'made in New Zealand' claims," said Adrian Sparrow, Commerce Commission Director of Fair Trading.

"Although these cases centre on the office furniture industry, it is a reminder to all businesses that they should take care to be specific when making country of origin claims. These cases serve as a reminder to businesses that, if important components are imported or if a significant part of the manufacturing process is undertaken offshore, then a 'Made in New Zealand' claim risks breaching the Fair Trading Act. Such businesses should make explicit claims which are appropriate for their products, for example 'assembled in New Zealand from imported components'. Some consumers are willing to pay a higher price for goods that they believe to be made in New Zealand, so it is important that country of origin claims are accurate," said Mr Sparrow.

Background

The Commission's updated fact sheet on the Fair Trading Act and country of origin representations can be downloaded from the Commission's website www.comcom.govt.nz under Fair Trading/Resources/Fair Trading Factsheets.

Dawell Furniture Co Limited breached Section 13(j) of the Fair Trading Act. Section 13(j) prohibits misleading representations concerning the place of origin of goods. The misleading representations were made between 2002 and 2005 in relation to the Tulip, Multi and Kate models of chairs in Boise Office Catalogues distributed to customers throughout New Zealand and also in an advertising brochure provided to resellers. The advertising brochure featured the New Zealand Made logo.

An office chair can be viewed as four separate sub-assemblies:

a. The five-star base and castor wheels

b. The gas lift

c. The chair mechanism and gas lift

d. The seat and back

There was only significant New Zealand input into the manufacture of the seat and back of the chairs.

In November 2008 Dawell pleaded guilty to 23 charges of breaching the Fair Trading Act and was fined $5,000 and $2,500 court costs in the Wellington District Court.

Damba Furniture breached Section 13(j) of the Fair Trading Act. Section 13(j) prohibits misleading representations concerning the place of origin of goods. The misleading representations were made between 2002 and 2005 in relation to the Tech Nova, Tech LE, Cube, Cube Duo, Cube Operational, Tango Duo, Zeus Multi Function, Tech Super Multi-Function 2407 and 2507, Tech Super Multi-Function, High Back and Medium Back chairs in Boise Office Catalogues distributed to customers throughout New Zealand.

There was only significant New Zealand input into the manufacture of the seat and back of the chairs.

In November 2008 Damba Furniture pleaded guilty to three charges of breaching the Fair Trading Act and was fined $5,000 and $2,500 court costs in the Auckland District Court.

Eden Office Seating breached Section 13(j) of the Fair Trading Act. Section 13(j) prohibits misleading representations concerning the place of origin of goods. The misleading representations were made between 2002 and 2005 in relation to the Silhouette and Tag model chairs in Boise Office Catalogues distributed to customers throughout New Zealand and also in a company brochure provided to resellers.

There was only significant New Zealand input into the manufacture of the seat and back of the chairs.

Knights Business Furniture was found guilty in the New Plymouth District Court in September 2007 of breaching Section 13(j) of the Fair Trading Act.

Knights used the words 'NZ Made' in advertising brochures when the chairs in question were assembled in New Zealand using imported components manufactured in Taiwan, China and Italy. The foam for the seat and the back was manufactured in New Zealand.

In his judgment, Judge Ongley held that whether a product was New Zealand made was a question of fact and degree and that in Knight's case the New Zealand input into the chairs was not enough to justify describing them as New Zealand made. The Judge noted that, in that case, the assembly in New Zealand of parts manufactured overseas could not be described as New Zealand made without creating a misleading impression.

Only the courts can give an authoritative ruling as to whether particular conduct breaches the Act and impose penalties.

Buy New Zealand Made is a membership based private organisation which promotes New Zealand made products using the stylised kiwi in a triangle logo. Buy New Zealand Made relies on its members to ensure their products comply with the country of origin provisions of the Fair Trading Act.