A Christchurch company has been fined $48,000 for trying to “dupe” overseas tourists by passing off souvenirs as New Zealand-made.
Souvenir wholesaler ProKiwi International Ltd was sentenced in the Christchurch District Court yesterday after pleading guilty to 17 charges of misleading the public under the Fair Trading Act between March 2008 and May last year.
ProKiwi sold at least 17 of the products, including lip balm, soap and hand lotion, in more than 250 souvenir shops throughout New Zealand.
All products used images and words suggesting they were New Zealand-made, with 15 failing to mention the products were made in China from Asian ingredients.
Packaging displayed the words “New Zealand” and “Aotearoa” prominently and featured images of kiwifruit, Mt Cook and a merino ram.
Judge Philip Moran said ProKiwi had made a blatant and cynical effort to convince non-English-speaking tourists that the products were made from New Zealand ingredients in New Zealand.
“It was intended to dupe overseas tourists,” he said.
While the company had entered early guilty pleas and added “Made in China” stickers to outgoing products, it had not recalled offending items from shop shelves where they were still being sold, he said.
“I would have expected the company to do something about that.”
Commerce Commission lawyer James Donkin said ProKiwi had made minimal effort to correct packaging, and last week at least two souvenir stores were still selling the deceptively labelled products.
The Press visited four Christchurch souvenir shops selling ProKiwi products yesterday.
While some items had small “Made in China” labels, most did not say where they were made.
Donkin told the court the company’s deception gave it an unfair advantage over competitors, which could not hope to compete on price when selling New Zealand-made products.
Figures for the 2007-08 year showed ProKiwi made $132,000 from “body-care” products with a gross profit margin of 50 per cent.
The company, which also sells caps, key rings and other souvenirs, had an overall gross profit margin of 12 per cent.
ProKiwi lawyer Michael Kirkland said that while it was accepted “innuendo” on the labelling could be misleading, the offending was careless rather than deceptive or reckless.
All products had listed their ingredients correctly and when warned by the commission, the company had corrected all outgoing labelling with “Made in China” stickers.
“There was no deception,” he said. “A piece of soap is a piece of soap.”
Last month, ProKiwi co-owner Rafe Anthony Hammett spoke out against plans by Ngati Toa to trademark the Ka Mate haka, which features on tea towels sold by the company, saying the haka did not belong to anyone.
Tourism Industry Association chief executive Tim Cossar said the penalty was fair and “rogue traders” such as ProKiwi could damage New Zealand’s tourism brand.