Hot drink cup company warned for misleading recycling claims

Glopac New Zealand Ltd, a paper packaging products company, has been warned by the Commerce Commission for making misleading claims about the ability to recycle its hot drink cups.

Glopac represented its hot drink cups were recyclable, when in fact hot drink cups are not currently accepted into recycling streams in New Zealand. The representations were made on Glopac’s website, social media and on the products.

The Commission considers Glopac likely breached the Fair Trading Act by making these claims and issued a warning letter after investigating the matter.

Glopac relied on test results from a German testing facility which showed that the cups were capable of being recycled. Glopac admitted it knew that hot drink cups were not accepted in recycling in New Zealand, but it thought that consumers would know that, and not put their hot drink cups into recycling.

Many hot drink cups in New Zealand contain a plastic lining, which makes them unsuitable for recycling. It is not easy to distinguish between plastic lined cups and 100% paper cups so, to avoid contaminating recycling streams, facilities do not accept any hot drink cups. Glopac’s hot drink cups are 100% paper and do not have a plastic lining.

Commission Chair Anna Rawlings said “Consumers are increasingly considering the environment when making purchasing decisions. Glopac focused on the fact that the product was technically capable of being recycled, rather than the realities of what will be accepted for recycling in New Zealand and the likelihood that consumers would expect the product could be disposed of in recycling waste streams when it could not.”

“We want to encourage New Zealand businesses to be innovative. However, when developing new products, businesses need to carefully consider how consumers may interpret any claims they make about their products to ensure the claims are clear and not misleading,” said Ms Rawlings.

Following contact from the Commission, Glopac has removed all hot drink cup recycling representations from its website and social media, and it is taking steps to remove the representation from its hot drink cups.

A copy of the warning letter can be found on the Commission’s website.

Background

Environmental claims guidelines
Environmental claims can include statements about recycling, biodegradability, and the use of recycled content or natural products. If you make environmental claims, they must be accurate, scientifically sound and substantiated.

We have released guidelines to help businesses understand their obligations when making environmental claims, including how to avoid breaching the Fair Trading Act.

Warning letters
A warning explains the Commission’s view of the conduct and does not constitute a finding of non-compliance with the Fair Trading Act. Only the Courts can decide whether a breach of the law has occurred.

If you can’t back it up, don’t say it
Traders must be able to back up the claims they make and if they cannot, they should not be making them. Guidance for traders on unsubstantiated and misleading claims is available on our website.

Substantiation
Every day consumers are faced with advertising that claims goods and services are now cheaper, superior, or provide particular benefits.

Consumers generally don’t have the time or resources to establish whether these claims are accurate. And in many cases even when they use the advertised good or service, they can’t easily evaluate whether the advertised claims are true.

Consumers need to be able to rely on the accuracy of claims to be able to make informed purchasing decisions. Under the Fair Trading Act it is illegal to make an unsubstantiated representation about a good or service without any reasonable basis. What this means is that businesses that make claims or imply something about their goods or services must have reasonable grounds for making those claims.

Misleading your customers is illegal
Consumers must be able to rely on the information traders provide when they are buying goods and services. Businesses must not mislead consumers about price, quality, features, deliverables or any discounts – everything must be accurate and clearly described.

The Fair Trading Act makes it illegal for anyone in trade to mislead consumers, give false information, or make misrepresentations. It also applies to advertising in all forms such as online, print, TV, social media – and in all dealings with consumer

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