The Federal Court has ordered Clorox Australia to pay $8.25 million in penalties following misleading claims about its GLAD products being made from ‘ocean plastic’. The court found that Clorox breached Australian Consumer Law between June 2021 and July 2023 by falsely representing that certain GLAD products contained at least 50% recycled ocean plastic.

During this period, over 2.2 million products were sold with packaging that misled consumers. The products were actually made from approximately 50% plastic waste collected from communities in Indonesia, up to 50 kilometres from a shoreline, rather than directly from the ocean.

The Australian Competition and Consumer Commission (ACCC) initiated court action against Clorox, underscoring the significance of accurate environmental claims for maintaining consumer trust and ensuring fair competition. ACCC Chair Gina Cass-Gottlieb said: “Claims about environmental benefits matter to many consumers and may impact their purchasing behaviour. When those claims are false or misleading, this is a serious breach of trust, as well as the Australian Consumer Law.”

“This is also a significant matter because consumers have limited or no ability to independently verify the accuracy of the claims made on packaging and it also disadvantages competitors who are accurately communicating their environmental credentials,” said Cass-Gottlieb.

The misleading packaging included statements such as ‘50% Ocean Plastic Recycled Bags’ and ‘Made using 50% Ocean Plastic*’, accompanied by imagery of waves and blue bags. Despite Clorox updating the packaging in March 2022 to read ‘Made using 50% Ocean Bound Plastic*’, the ACCC deemed this still misleading.

Clorox cooperated with the ACCC throughout the investigation and legal proceedings, making admissions and agreeing to joint submissions on penalties. The company was ordered to implement an Australian Consumer Law compliance program, publish a corrective notice, and pay part of the ACCC’s legal costs. Clorox discontinued the products in July 2023 after the ACCC commenced its investigation.

The Federal Court made observations on the case, noting, “there is a particular societal harm that arises when conduct undermines consumers’ confidence in environmental claims” and that “development of products that minimise adverse environmental impacts is beneficial”. The court also remarked, “Environmental claims are useful for consumers only if they are accurate.”

Cass-Gottlieb said: “We consider this penalty is appropriate in this case where Clorox gave insufficient consideration to what ‘ocean plastic’ meant to an ordinary consumer, particularly in light of the blue colour and wave imaging on the packaging.”

The ACCC released guidance in December 2023 on making environmental claims, outlining obligations under Australian Consumer Law.

“While the ACCC encourages businesses to innovate and offer environmentally sustainable products, businesses need to be clear and accurate when making representations about them. We take allegations of greenwashing extremely seriously and will continue to monitor claims made by businesses and, where appropriate, will take enforcement action on misleading environmental claims,” said Cass-Gottlieb.