A shitty situation: Pental fined for misleading products
12 April 2018, Written by David Simmons
Pental (ASX: PTL) has been ordered to flush $700,000 down the loo after it was found by the Federal Court to have made misleading representations about its product.
This shitty situation arose after the company made representations saying its White King cleaning wipes were 'flushable'.
"Simply wipe over the hard surface of the toiletand just flush away" was printed on its promotional material and packaging for the toilet wipes.
As it turns out, these wipes were not flushable at all, and were in fact, pretty crappy products.
The company said the White King Toilet Wipes were made from a specifically designed material which would disintegrate in the sewerage system when flushed, just like toilet paper.
ACCC Commissioner Sarah Court says the consumer watchdog took action because consumers were being misled.
"These White King wipes can't be flushed down the toilet, and Australian wastewater authorities face significant problems if they are because they can cause blockages in household and municipal sewerage systems," says Court.
In addition to the $700,000 fine, the Federal Court made declarations that these representations were false or misleading in contravention of Australian Consumer Law, and ordered the company to implement a compliance program.
During the proceedings Penal admitted to certain facts and orders to be made other than the amount of the penalty, and because of its cooperation the Federal Court reduced the penalty sought by the ACCC by more than 50 per cent.
The Melbourne based company was also required to pick up the ACCC's costs estimated at $110,000.
The listed company does not expect the fine to impact the group's underlying performance for the FY18 year.
Pental isn't the only company in a stink at the moment; the ACCC has separate ongoing proceedings against Kimberly-Clark Australia concerning misleading representations in relation to four 'flushable' personal hygiene wipes.
Choice awarded a "Shonky Award" to Kimberly-Clark's Kleenex Cottonelle Flushable Cleansing Cloths for Kids in 2015.
Shares in Pental are steady at 0.37 per share at 4.15pm AEDT.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Author: David Simmons