Clorox fined $8.25m over misleading ‘ocean plastic’ claims on GLAD bags

In short:

The maker of GLAD garbage bags has been fined $8.25m after admitting to making inaccurate recycling claims on 2.2 million products.

Clorox was found to have misled customers over a two-year period by greenwashing.

What’s next?

Clorox must pay the penalty, bear part of the ACCC’s legal costs, set up a compliance program, and oblige with other federal court orders.

Clorox Australia, the manufacturer of GLAD waste disposal and food storage bags, has been hit with an $8.25 million federal penalty for making incorrect product recycling claims.

The Australian Competition and Consumer Commission (ACCC) sued Clorox for misleading customers between June 2021 and July 2023 with suggestions certain GLAD bags were partly made of recycled “ocean plastic”.

The ACCC said the packaging on more than 2.2 million products from Clorox’s GLAD to be GREEN ‘50% Ocean Plastic Recycled’ Kitchen Tidy Bags and Garbage Bags range indicated they were made of at least 50 per cent recycled plastic waste collected from the ocean or sea.

Clorox admitted those products were in fact made from about 50 per cent plastic waste that had been collected from “communities in Indonesia with no formal waste management systems, situated up to 50km away from a shoreline, and otherwise from non-recycled plastic, processing aid and dye”, according to the consumer watchdog.

The ACCC’s case in the Federal Court was upheld after it ruled that the packaging implied a “relationship between the products and the ocean”, and that the ‘GREEN’ label suggested they were environmentally-friendly goods.

The court said those references formed an important contextual basis in its assessment of Clorox’s conduct, which was found to have breached Australian Consumer Law (ACL).

ACCC Chair Gina Cass-Gottlieb said the false and misleading claims constituted a serious breach of trust and called the court’s penalty appropriate.

“Claims about environmental benefits matter to many consumers and may impact their purchasing behaviour,” she said.

“This is also a significant matter because consumers have limited or no ability to independently verify the accuracy of the claims made on packaging and it also disadvantages competitors who are accurately communicating their environmental credentials.”

Greenwashing taken ‘extremely seriously’

Clorox’s conduct may have undermined consumer confidence in environmental sustainability, a practice the court noted could cause broader harm to society.

The “development of products that minimise adverse environmental impacts is beneficial” but “environmental claims are useful for consumers only if they are accurate”, it said in its ruling.

The ACCC began investigating Clorox in mid-2023 after complaints of inaccurate ocean plastic representation, following which the products were discontinued in July the same year.

“We take allegations of greenwashing extremely seriously and will continue to monitor claims made by businesses and, where appropriate, will take enforcement action on misleading environmental claims,” Ms Cass-Gottlieb said.

Examples of misleading packaging text include: “Made using 50% ocean bound plastic that is collected from communities with no formal waste management system within 50 km of the shore line”. The ACCC found this declaration insufficient to dispel the false or misleading ocean plastic representation.

Greenwashing refers to the practice of companies billing their products or services as more sustainable, environmentally friendly or ethical than they actually are.

A 2023 report into greenwashing by Australian businesses found 57 per cent of the companies surveyed made concerning environmental claims, with the three most impacted sectors being cosmetic and personal care, textiles, garments and shoes, and food and beverages.

Clorox said its sub-company GLAD took its obligations to package and market products with accurate and substantiated claims seriously.

“While the ACCC and the Court recognised that Glad did not intend to mislead consumers, we respect this outcome and see this as an opportunity to further enhance our practices and reaffirm our commitment to offering products that help reduce environmental impact and meet consumers’ evolving needs,” a Clorox Australia spokesperson told the ABC.

In addition to paying the $8.25 million penalty, Clorox has been ordered to set up an ACL compliance program, publish a corrective notice on its website, and bear part of the ACCC’s legal costs, among other orders.

By Heloise Vyas