The Commerce Commission has issued a warning to Kmart NZ Holdings Limited (Kmart) for what it alleged was unsubstantiated claims in its “100% sustainably sourced cotton” advertising.
The 100% sustainable cotton claims were made from August 4, 2023 and removed on October 4, 2024.
During the Commission’s investigation, Kmart admitted its “Better Cotton” was actually mixed with conventional cotton in the supply chain.
The Commission alleged the conduct was potentially in breach of the Fair Trading Act, and issued a warning letter to Kmart.
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“Kmart’s absolute claim of ‘100% sustainably sourced cotton’ implies a high level of certainty that we believe Kmart did not have,” said Commerce Commission competition, fair trading, and credit general manager Vanessa Horne.
“Kmart could therefore not say with certainty whether 100% of the cotton in its clothing was supplied by Better Cotton farmers or was sustainably sourced,” she said.
Horne said greenwashing was a concern for well-intentioned consumers who were led to believe products were more environmentally friendly than they actually were.
“Consumers have a right to clear and accurate information, and greenwashing makes it virtually impossible for a consumer to identify if a product is genuinely sustainable,” Horne said.
“Businesses know that consumers are increasingly considering the environment when buying goods or services and may be influenced to purchase from one company over another because of their environmental claims.
“Unsubstantiated claims are unfair for businesses who put in the time and resource to make sure their environmental claims are legitimate.
“We are very supportive of businesses getting involved in sustainability initiatives, but as with any advertising, claims made must be accurate and be able to be backed up to avoid breaching the Fair Trading Act.”
She said the message was simple: “If you can’t back it up, don’t say it.”
After the Commission raised the issue, Kmart removed the “100% sustainably sourced cotton” claim from its New Zealand website.
Kmart has also advised it continued to provide regular compliance training for its staff members in consumer and competition law.