A federal court also ordered Clorox Australia to publish a correction notice and pay part of the consumer watchdog’s legal fees. | Photo Courtesy of Australian Competition and Consumer Commission
Clorox Australia has been slapped with a multimillion-dollar fine resulting from misleading recycling claims for its plastic bags.
The country’s consumer protection agency fined Clorox $8.25 million Australian (U.S. $5.29 million) for claiming its Glad brand bags for garbage and food storage contained at least 50% ocean-bound plastic.
The company admitted it had used recycled plastic collected from “communities in Indonesia with no formal waste management systems” that were not located near water bodies, according to the Australian Competition and Consumer Commission.
The ACCC started investigating Clorox in mid-2023 following complaints about the accuracy of the ocean plastic claims. Clorox stopped making these products in July 2023, after the group started investigating but before a suit was filed in federal court.
In December 2023 the ACCC published eight principles to help businesses make accurate environmental claims.
“Claims about environmental benefits matter to many consumers and may impact their purchasing behaviour. When those claims are false or misleading, this is a serious breach of trust, as well as the Australian Consumer Law,” ACCC Chair Gina Cass-Gottlieb said in a press release.
“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.”
The federal court noted that “there is a particular societal harm that arises when conduct undermines consumers’ confidence in environmental claims.” It went on to say developing products that minimize environmental damage was beneficial, but “environmental claims are useful for consumers only if they are accurate.”
In a written statement, Clorox said it “takes seriously its obligations to package and market its products with claims that are accurate and substantiated.”
“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,” the company wrote.
In addition to the fine, Clorox also must publish a correction notice on its website and pay part of the ACCC’s legal costs. Further, the company has to establish an Australian Consumer Law compliance program, an internal system to identify, fix and reduce the risk of violating consumer protection laws.
In the U.S., other companies have been sued over recycling claims, including Danone, Reynolds and Keurig. Glad also was sued in California in 2023, on allegations that its recycling-related claims were false, and that case is still pending.
This story has been updated to clarify the headline and to include Clorox’s written statement.