Overview

Seven consumer laws are being reviewed as part of a major reform of New Zealand’s consumer law. In July 2010, the Ministry of Consumer Affairs sought submissions on its Consumer Law Reform discussion paper, which includes the Fair Trading Act, the Consumer Guarantees Act and the Weights and Measures Act.

Of particular interest to the Packaging Council was the proposal to amend the Fair Trading Act to prohibit unsubstantiated claims and give the Commerce Commission powers to issue substantiation notices. The discussion document notes that ‘…claims of eco-friendliness and sustainability is a growth area where there is significant potential to confuse and mislead consumers, but where there are few guidelines on what is meant by such definitions’.

In November 2010, following submissions from the Packaging Council and other organisations, the Ministry of Consumer Affairs issued an additional paper on claims substantiation.  They recommend that a general prohibition on unsubstantiated claims should be added to the Fair Trading Act, but did not recommend that the Commerce Commission be given substantiation notice powers. 

The Commerce Commission would have to use its current investigatory powers under the Fair Trading Act, effectively meaning that the burden of proof would still lie with the Commerce Commission to prove beyond reasonable doubt that a claim is misleading.  The enforcement powers would be limited to the Commerce Commission, meaning that competitors could not use the law change to demand trade secrets from each other.

PAC.NZ is broadly comfortable with the Ministry’s recommendations and will not take the matter any further, but will maintain a watching brief as the proposed law changes pass through Parliament.

The Consumer Law Reform Bill has been tabled Parliament and is awaiting its first reading.

The cabinet papers and decisions, discussion document, additional papers and submissions are available at:

www.consumeraffairs.govt.nz

The Bill may be accessed from:

http://legislation.govt.nz/bill/government/2011/0287/latest/DLM3672914.html

[last updated: 17th June 2011]

Packaging Council Submission

Our recommendations were as follows:

Recommendation 1: The Ministry should consider promoting and supporting compliance with packaging standards, industry Codes of Practice and guidelines as a means of providing incentives for claims to be made only when substantiated.

Recommendation 2: Only the person who initiates the claim should be the target of a substantiation order.

Recommendation 3: There should be no general provision prohibiting unsubstantiated claims which is enforceable privately.

This is to prevent competitor companies from taking private action to gain trade secrets from each other and attempting to stifle competition.

Recommendation 4: There should be no general provision prohibiting unsubstantiated claims which is enforceable by the Commerce Commission.

This is made on the basis that a general prohibition on unsubstantiated claims would give the Commerce Commission no advantage in an investigation over and above their current powers.

Recommendation 5: The Commerce Commission should be required to have reasonable grounds before issuing a substantiation notice.

Click here to download the Packaging Council’s submission.

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TOWARDS SUSTAINABLE PACKAGING

77 Greenmount Drive, East Tamaki, Auckland 2013
PO Box 58899, Botany, Auckland 2163
PHONE 09 271 4044, FAX 09 271 4041
EMAIL: pac.nz@packaging.org.nz