23 May 2016

Hefty fine for fake alpaca duvets

9:40 pm on 23 May 2016

A company selling duvets and rugs and its owner have been fined a total of more than $109,000 for selling fake alpaca duvets to tourist shops.

Nangong Limited and owner Yun Quiang Hou pleaded guilty to 14 charges of making false claims in Auckland District Court.

Nangong was fined $91,000 of the total penalty and Mr Hou was fined $18,200.

The Auckland based company had claimed the duvets contained alpaca wool and were made in New Zealand, when they were in fact made in China, using 100 percent sheep wool.

The claims were made on packaging and labelling, on invoices and in a conversation with a Commerce Commission investigator.

Labelling included pictures of alpacas, a silver fern and the Woolmark logo, and wording such as "Made in New Zealand", "New Zealand alpaca" and "Pure Wool Alpaca".

Commissioner Anna Rawlings said customers spent up to $700 on a duvet that was worth only about $240.

The products were supplied to three Auckland retailers catering mainly to the Asian tourist market.

Ms Rawlings said country of origin claims are of ongoing concern to the Commerce Commission.

She said New Zealand made products are often sold at a premium because they have a reputation for quality, and this type offending undermined that.

"The law is clear that products have to be truthfully labelled, and businesses must be able to substantiate any claims they make about the quality, origin and composition of their products," she said.

Two other companies have been charged by the commission over false or misleading claims about their cashmere and alpaca products. They are still before the court.