Pental’s luck is in the crapper as mistruths about flushable wipes cost it $810k
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It’s been a crap week for Pental as it shoulders a $810,000 penalty for misleading advertising around its non-flushable toilet wipes.
The Federal Court handed down a $700,000 fine for claims on its websites that said its White King Bathroom Wipes were flushable and disintegrated like toilet paper.
The competition regulator launched proceedings in December 2016. Pental (ASX:PTL) has also been ordered to pay court costs of $110,000.
“Pental had admitted to certain facts and orders to be made other than the amount of the penalty, and in light of this cooperation and other factors the Federal Court reduced the penalty that was otherwise sought by more than 50 per cent,” Pental said.
The ACCC alleged that claims about flushability and disintegration were “false, misleading or deceptive conduct”.
Pental said it inherited the product packaging from a major international company and believed that labelling was lawful.
It began a review in September 2014 and removed the claims relating to disintegration like toilet paper, but kept the ‘flushable’ label until July 2016.
Part of its defence was that “there is currently no legal standard for flushability” because of the ambiguity around the term.
Pental says it will wear the penalty in its full year results but it shouldn’t impact underlying performance.