Woolworths ordered to pay over $3 million for misleading consumers

Posted by AFN Staff Writers on 8th February 2016

LawThe Australian Federal Court last Friday ordered Woolworths to pay AUD$3.057 million for misleading consumers over product safety issues with private label products sold in its supermarkets, Big W and Masters stores over a three year period.


The Court declared that Woolworths engaged in misleading and deceptive conduct and in some cases had made false or misleading representations about the safety of five of its house brand products – a deep fryer, drain cleaner, safety matches, a padded flop chair and a folding stool.


The defects in Woolworths’ products caused several serious injuries, including burns from hot oil when the handle of the deep fryer broke and chemical burns to a child due to a defective cap on a bottle of drain cleaner.


The Australian Consumer and Competition Commission (ACCC) said in some cases Woolworths was aware of serious injuries from these products but did not stop selling the products or recall them.


“These products were subsequently removed from sale and recalled, but not always before further injuries resulted from their defects,” the ACCC stated.


Presiding judge Justice Edleman said the more than AUD$3 million penalty was designed to deter other retailers activing in the same away Woolworths had.


“The penalties I have imposed are designed in broad terms to achieve specific and general deterrence by requiring vigilance concerning quality management procedures to ensure the accuracy of representations and effective procedures for the recall or withdrawal of products and the notification of the ACCC,” said Justice Edleman.


“This is particularly so where products can affect consumer safety and the person deals in the sale of large volumes of consumer products,” Justice Edleman stated.


Consumers must be able to rely on the safety of goods: ACCC


ACCC Chairman Rod Sims said Australian consumers must be able to rely on the safety of goods supplied to them by retailers.


“By failing to recall and remove products from its shelves for some time after it became aware that the products were defective, Woolworths misled Australian consumers and placed their safety at risk,” Sims said.


“The significant penalties imposed in this case reflect the serious nature of Woolworths’ conduct,” he said.


Sims concluded that the ACCC acknowledges Woolworths moved to implement an improved product safety compliance program, that it has cooperated with ACCC investigation and made admissions assisting in the resolution of the proceedings.


Woolworths responds  


In response to the rulings Woolworths issued the following statement to Australian Food News:


“Woolworths takes product safety and quality extremely seriously. Australians buy millions of items from us every day and we know they rely on Woolworths to provide safe, high quality products.


We acknowledge the failures in our quality processes that occurred some time ago and sincerely apologise to our customers. 


As acknowledged by the ACCC, Woolworths cooperated and took significant steps to address these failures. The issues were raised at the highest levels within the company and we have invested more than $20 million on an entirely new product lifecycle management system, implemented over two years, to ensure our products are the quality our customers expect.


Our customers can be confident that Wooworths’ products have been through stringent and comprehensive quality assurance processes.”