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Small business lambasts ACCC ‘witch hunt’

Adam Zuchetti
Adam Zuchetti
24 October 2018 2 minute readShare
Big vs small

A small Australian manufacturer has accused the competition regulator of launching “a witch hunt” against it and seeking to “bully a small Australian business to pay hefty fines”.

Sydney-based Ozwear Connection, which sells a range of Ugg boots and accessories, was accused by the ACCC of insinuating that its merchandise was made in Australia when its products are predominantly made in China.

According to the ACCC, Ozwear used marketing between January and April this year that claimed its Classic Ugg range was “100 per cent Aussie owned” and made from “the best materials available in Australia”. The product also came with green and gold tags in the shape of Australia.

The competition watchdog claimed such marketing amounted to “false or misleading representations” about the country of origin of its products.

It issued Ozwear with two infringements notices totalling $25,200, which the company has since paid.

But speaking to My Business, Jason Zhang from the company disputed these findings and said that it had simply presented the facts.

“The ACCC originally served us paperwork that asked for proof of origin of the sheepskin used in the classic boots. (We provided evidence that we do indeed use Australian sheepskin). They were fine with our substantial evidence and this request was appeased,” said Mr Zhang.

“The ACCC also asked for info pertaining to our ‘Australian Made’ range. We provided in-depth info and invoices for a local Australian manufacturer who made a small Australian made range for us in 2014 and surrounding evidence. This request was appeased also.”

However, Mr Zhang said that the ACCC continued to look for faults and focused on its marketing and product descriptions.

“Then the ACCC focused on terminology used such as, ‘We are a proud Australian company’. This is, in fact, true. I am an Australian citizen and I am proud of my Sydney-based Australian company; I have worked very hard on this business,” he said.

“‘We use the best materials available in Australia’ is true as well. We use high quality Australian-sourced sheepskin and had proven this to the ACCC. All our boots have the country of manufacture within the footwear and on stickers on the box (outside) and the poly bag they come in.

“We simply believe that stating facts is not a crime.”

In a further bid to appease the regulator, Mr Zhang said that Ozwear changed its packaging and descriptions – despite disagreeing there was a need to do so – but that the ACCC nevertheless issued infringement notices.

“We actually made changes to our swing tags and corporate wording to appease the ACCC even though we disagreed with their ideology, but they were on a witch hunt and looking to bully a small Australian business to pay hefty fines and tarnish us with the same brush as the real shonky operators out there,” he said.

“Whether there is an ulterior motive for this action is unknown. We feel we have been let down by the very system that is set out to protect us all.”

Mr Shang said that he was grateful to be given “an opportunity to have a voice as we feel it is important to set the record straight”.

In a statement announcing the infringement notices, ACCC deputy chair Mick Keogh said that the country of origin is a “powerful marketing tool for businesses” and that Australian-made products often attract a higher price tag as consumers dig deeper to support local businesses.

“When false or misleading representations are made about a product being Australian-made, consumers may end up paying more for no reason at all, and businesses who are genuinely making their products in Australia lose out,” he said.

The regulator notes that the payment of infringement notices is not an admission of guilt.

It comes as a separate business was found by the Federal Court to have actively promoted its Aboriginal art as being genuine when it was actually manufactured in Indonesia.

Small business lambasts ACCC ‘witch hunt’
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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