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MARKETING WITH BUZZWORDS: KEEPING IT LEGAL How businesses can rise to the challenge of promoting the ‘natural’, ‘sustainable’, ‘ethical’ or other such properties of brands or goods without taking missteps when it comes to the law. BTy Bird & Bird Partner Lynne Lewis and Senior Associate Shariqa Mestroni. odays’ consumers are more mindful about their buying habits, paying more attention to a product’s ‘green’ credentials, a company’s sustainability practices, and the broader environmental impact of their buying decisions. Businesses are trying to meet the market by launching ‘natural’ product lines or adopting ‘sustainability’ strategies. But navigating the law and regulatory landscape isn’t simple when there are many grey areas. While phrases such as ‘ethical’ and ‘sustainable’ have in recent times become buzzwords, these terms lack objective measure and clear legal definition. This, in turn, makes consumer choices about what is truly sustainable all the more difficult. The Full Federal Court of Australia has provided some guidance on the use of the word ‘natural’ in relation to advertising.1 Moroccanoil Israel Ltd, which produced of a range of hair and skin care products centred on argan oil, sued ALDI under the Australian Consumer Law (ACL) (among other things) in relation to ALDI’s similar product line labelled ‘PROTANE NATURALS’ together with the words ‘Moroccan argan oil’. One of the allegations was that by using the word ‘naturals’, ALDI created a false impression that the products contained only (or substantially) natural products, when they did not. The Full Court held that there was no misleading or deceptive conduct due to several contextual factors that effectively counteracted the meaning communicated by the word ‘naturals’ in the product’s branding. These included the appearance of the word ‘naturals’ on packaging in relatively small font, the product description, and the fact that the relevant products were sold in the ALDI promotional discount bins. The Court held that in these circumstances, an ordinary consumer would not expect the hair care products would be made only or substantially from boutique natural ingredients such as argan oil. This case demonstrates that getting the balance right on ‘natural’ or ‘green’ claims requires a case-by-case approach. In Australia we don’t have specific laws and regulations regarding ‘green claims’. However, any ‘natural’, sustainability or environmental claims that are vague or are not substantiated may well fall foul of the ACL for being misleading or deceptive. It’s also contrary to the ACL to make a false representation about a product or service, in terms of it being of a particular standard, quality, grade, value, composition, style or model, or having a particular history or use. Recently, proceedings were brought by the ACCC against two companies regarding sustainability claims about future matters. In its case against Kimberly Clark Australia (KCA),2 the ACCC challenged statements made in relation to ‘flushable’ wipes, alleging that they gave rise to a number of representations that effectively suggested that the wipes would disintegrate in a manner similar to toilet paper when flushed, and that the wipes were compatible with sewerage systems in Australia. The ACCC alleged that these representations referred to how the wipes would perform after their use and were therefore representations as to future matters. The Full Federal Court found on appeal that the representations related to the performance characteristics of the wipes and were not predictive statements about future matters. In any event, the Court found that KCA had proven that it had reasonable grounds for making the representations. The ACCC’s case against Woolworths was in relation to environmental claims made about its picnic products.3 The regulator claimed that the products, which were labelled ‘biodegradable and compostable’, made false and misleading representations about future matters. The trial judge found that Woolworths had not made the representations in the form alleged by the ACCC and, in any event, the representations made by Woolworths were not about ‘future matters’, rather the representations were about an inherent characteristic of the products and a fact that could be ascertained at the time the representation was made. Although the ACCC lost both these cases, it’s clear from its 2021 enforcement priorities that it will continue to pay close attention to ‘green’ marketing claims. The penalties for breaches of the ACL are significant. Whether a representation such a ‘natural’ or ‘in respect of a future matter’ is misleading or deceptive will depend on the words used and the context, and therefore require close scrutiny. Where representations are about the properties of a product or predictive in nature, businesses should ensure there are reasonable grounds for making the claim: gather evidence and ensure you can substantiate the claim. We recommend that businesses keep robust records and align policies and practices in this regard. The takeaway for brand owners is the need to be cautious about representations and claims about the sustainable credentials or properties of their products. Claims must be accurate, able to be substantiated, specific (not unqualified, general statements), not overstate benefits, and consider the whole product life cycle. We recommend that advertising claims be specific in their nature and linked to test results that can be relied on as evidence in the event of a challenge. The dual benefit of brand owners investing in their sustainability messaging is that consumers will be drawn to and able to better connect with brands grounded in authentic behaviour. References 1. Aldi Foods Pty Ltd v Moroccanoil Israel Ltd \\\[2018\\\] FCAFC 93. 2. Australian Competition and Consumer Commission v Kimberly-Clark Australia Pty Ltd \\\[2020\\\] FCAFC 107. 3. Australian Competition and Consumer Commission v Woolworths Group Limited (formerly called Woolworths Limited) \\\[2020\\\] FCAFC 162. LEGAL About Bird & Bird Bird & Bird is one of the world’s leading international law firms advising industries where technology, regulation and intellectual property are driving change. With a strong Australian presence, clients enjoy global reach across various practice areas. JUN, 2021 RETAIL WORLD 67