Kmart and Atlas Imports offer refunds for misleading claims about "genuine" leather belts: possible industry-wide problem
Published10 Apr 2001
As part of a settlement with the Commerce Commission, Coles Myer New Zealand Holdings Limited, which trades as Kmart New Zealand, and Atlas Imports Pty Limited today offered refunds and started corrective advertising for making misleading claims that six styles of men's belts were "leather" or "genuine leather".
In the advertising Atlas and Kmart acknowledge that the labels were misleading and breached the Fair Trading Act.
Commission Chair John Belgrave said that this case is an example of how a small detriment to each individual consumer the belts contained little or no leather can become a big total detriment to consumers.
The settlement relates to about 9,000 belts that Atlas supplied to Kmart, but information received during the investigation suggests that this may be an industry-wide problem in New Zealand and Australia.
"Consumers are prepared to pay more for leather goods," Mr Belgrave said. "Multiply a few dollars per belt by the 9,000 at Kmart and you get a significant total. Multiply a few dollars by the much bigger number that may be in many shops, and consumers could have paid hundreds of thousands of dollars more."
Atlas' parent company, A Royale & Co (Aust) Pty Limited, supplies a large number of chain stores in Australia. The Commission's Australian counterpart, the Australian Competition and Consumer Commission, has been investigating A Royale & Co about the same labelling issue.
In New Zealand, four of the styles of belt Atlas supplied were labelled "leather" but contained no leather hide at all. They were made up of 18 to 37 percent reconstituted leather leather scraps ground up and then mixed with glue with the remainder being other fabrics. One style labelled "leather" contained 24 percent leather hide and the sixth style was labelled "genuine leather" contained 61 percent leather hide.
The six styles of men's belts are "Now Dress", "Now Plait", Now Porthole", "Now Sawtooth", "Now Jean" and "Rivergum Jean". Consumers who bought these belts between July 1998 and July 2000 can get a full refund from their nearest Kmart store. Consumers can contact Kmart about the belts and refunds on 0800 944 553.
If consumers have concerns that other brands of leather belts bought at other stores may not be genuinely leather, then they can contact the Commission.
Background
The Fair Trading Act prohibits misleading conduct in relation to goods (section 10) and false or misleading representations about the composition of goods (section 13(a)).
Courts can impose fines of up to $100,000 on a company and up to $30,000 on an individual.
