Clorox Australia fined $5.2 million over false claims of using recycled plastic

(Reuters) - Australia’s competition regulator said on Monday Clorox (NYSE:CLX)’s local unit had been fined A$8.25 million ($5.19 million) by the Federal Court over falsely claiming its GLAD kitchen and garbage bags were partially made from recycled ocean plastic.

The Australia Competition and Consumer Commission (ACCC) said the U.S.-based cleaning products maker admitted to breaching the Australian Consumer Law from June 2021 to July 2023 by falsely claiming on its "GLAD" kitchen and garbage bags that these were made of at least half recycled oceanic plastic waste.

In reality, over 2.2 million of these bags were made of approximately 50% plastic waste collected from Indonesian communities without formal waste management systems, and up to 50 kilometers from any shoreline, ACCC added.

"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," Clorox said in emailed statement.

The court ruling comes amid a broader societal focus on environmental impact and sustainability, with misleading ’green’ claims potentially eroding consumer trust and creating unfair market conditions.

The court noted that claims of environmental friendliness were crucial in assessing the violating conduct.

Clorox was also directed to establish an Australian Consumer Law compliance program, publish a corrective notice on its website, and bear a portion of the ACCC’s legal costs, according to the regulator’s statement.

The company ceased the production of the products in question in July 2023 after the ACCC initiated its investigation.

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($1 = 1.5903 Australian dollars)

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