A bad week for Woolworths just got even worse today after the supermarket chain was fined $3.057 million in the Federal Court for Australian Consumer Law breaches over safety of house brand products sold in Woolworths, Big W and Masters stores.
The Australian Competition and Consumer Commission (ACCC) took the legal action against Woolies alleging misleading and deceptive conduct and in some cases had made false or misleading representations about the safety of five products – the Abode 3L stainless steel deep-fryer, Woolworths Select drain cleaner, Homebrand safety matches, Home Collection padded flop chair and Masters folding stool – over a 3-year period.
The court agreed, with Justice Edelman also finding that Woolworths failed to report serious injuries to the ACCC within two days of becoming aware they had occurred, as required by law, on at least eight occasions.
Product defects caused several serious injuries, including burns when the deep-fryer handle broke during use and chemical burns including to a young child, due to a defective cap on drain cleaner bottles.
Despite knowing about the danger, the ACCC alleged Woolworths continued to sell and did not recall the products until later, after further injuries occurred.
In these cases the Court found that Woolworths had misled consumers as to the suitability of the products.
In other cases, the Court representations on some products or packaging were false or misleading. For example, the padded flop chair was described as capable of bearing 115kg when under testing it could not reliably support more than 92kg.
In handing down his judgement, Justice Edelman said the severity of the penalties imposed were designed to act a deterrent
“The penalties I have imposed are designed in broad terms to achieve specific and general deterrence by requiring vigilance concerning quality management procedures to ensure the accuracy of representations and effective procedures for the recall or withdrawal of products and the notification of the ACCC,” .
ACCC Chairman Rod Sims said: “Woolworths misled Australian consumers and placed their safety at risk. The significant penalties imposed in this case reflect the serious nature of Woolworths’ conduct.”
Woolworths is also expected top upgrade its product safety compliance program.
The $3 million fine caps a bad week for the retailer, which is already plagued by how to deal with its loss-making Masters hardware stores, and additional fears that its upmarket Thomas Dux stores are also a drag on the business.
On Tuesday, the business lost top spot on the index of Australia’s most valuable brands to Telstra.
On Thursday, Woolworths and rival Coles both issued recalls for 24 salad products after 28 people fell ill with salmonella poisoning and the problem was traced to a supplier in Victoria.
The failures of the “fresh food people” went viral earlier today after a Sydney woman filmed a large and alive huntsman spider inside the bag of a Woolworths salad mix and posted it on Facebook. The video has been shared around 80,000 times in 24 hours.
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