In December 2016, the ACCC instituted proceedings against Kimberly-Clark Australia Pty Ltd (KCA) and Pental Products Pty Ltd (Pental) respectively, in relation to each of their ‘flushable’ wipes products.
The ACCC alleged that KCA and Pental were misleading consumers by representing that the wipes were flushable like toilet paper, when this was not the case.
The Pental proceedings concluded in April 2018 because Pental conceded the allegations. In June 2019, the Federal Court found that KCA’s ‘flushable’ claims in relation to its wipes were not false or misleading. On 29 July 2019, the ACCC announced it had appealed the Federal Court’s decision in respect of the KCA proceedings. This article explores these events in further detail.
The Pental Federal Court proceedings
In response to the ACCC proceedings, Pental conceded that:
- it had represented its ‘White King Flushable Bathroom Power Wipes’ and ‘White King Power Clean Flushable Toilet Wipes’ (collectively, Pental Wipes) were made from a material which disintegrated in the sewerage system like toilet paper, had similar characteristics to toilet paper when flushed, and were suitable to be flushed into the sewerage system;
- the Pental Wipes did not disintegrate or have similar characteristics to toilet paper; and
- describing them as flushable amounted to a misleading representation.
Pental was ordered by consent to pay a $700,000 penalty and to enter into a compliance program for making the misleading representation.
The KCA Federal Court proceedings
The Pental Wipes and the Kleenex Cottonelle Flushable Cleaning Cloths manufactured by KCA (KCA Wipes) are substantially similar – both are designed to be flushed after use.
However, KCA did not concede that the claims made by it in relation to the KCA Wipes were misleading and maintained that the KCA Wipes were in fact ‘flushable’ like toilet-paper.
The Federal Court found in favour of KCA against all (except one) of the following claims that the ACCC argued:
- a ‘flushability’ representation entailed that the KCA Wipes:
- would not cause or contribute harm to household and sewerage systems; and
- were compatible with sewerage systems;
- the risk of harm to both household and sewerage systems from KCA Wipes was greater than the risk of harm posed by toilet paper;
- the KCA Wipes meeting the international guidelines of the International Nonwovens and Disposables Association and the European Disposables and Nonwovens Association (collectively, Guidelines) should not be relied upon because they are formulated by manufacturers and therefore not a credible standard; and
- the ‘flushability’ representation was with respect to a future matter as it predicted how the KCA Wipe will behave when flushed and entering the sewerage system, which would only manifest in the future.
The judgment analysed a plethora of technical evidence of what happens when a KCA Wipe is flushed, how it disintegrates, how it travels through the sewerage system, its effects on the sewerage system and whether it amplifies the instance of blockages occurring in households and sewerage systems.
The detailed evidence discussed that although KCA Wipes do not disintegrate as quickly as toilet paper (in roughly half an hour as opposed to a couple of minutes), or arguably to the same extent (they arguably do not completely disintegrate), the KCA Wipes are still able to be flushed down the toilet despite the extended period of time they take to disintegrate, that the sewerage system is designed with an ‘element of resilience’, and there is insufficient evidence to make the conclusion that KCA Wipes contribute to blockages.
The Federal Court found on the evidence presented that:
- KCA Wipes do not increase the risk of blockages in households or sewerage systems (expert evidence suggested that other materials like large industrial wipes and paper towels are a bigger problem);
- KCA Wipes do not break down and disperse to the same extent as toilet paper, but the inferior properties of breakdown do not pose an increased risk of blockages in households and sewerage systems;
- The Guidelines represent a conscientious and scientific effort to establish a sound assessment for ‘flushability’ and were met by KCA regarding the KCA wipes; and
- The ‘flushability’ representation is not an expression of a future matter, but a characteristic of the KCA Wipes.
The evidence suggested that the KCA Wipes may be caught within the sewerage system and delivered to land fill, resulting in the KCA Wipes being inevitably harmful to the environment. However, the ACCC dropped the argument that the representation of the KCA Wipes being flushable suggest that it does not cause harm to the environment.
The ACCC has now appealed the decision of the Federal Court, stating that the Court erred in requiring evidence that the KCA Wipes had caused actual harm and should have found the KCA Wipes representation to be misleading because there was evidence of the risk of harm the KCA Wipes pose to the sewerage system.
The ACCC will also appeal the Court’s decision in rejecting the representation that the KCA Wipes break down like toilet paper when flushed.
Takeaways for manufacturers of consumer products
Manufacturers may be required to demonstrate not only that they have met the minimum recommendations or thresholds of their applicable manufacturing/product development guidelines, but also that they have tested their products outside the guidelines for prudential measure. In this case, the Federal Court took into account that the KCA Wipes not only excelled in meeting the minimum threshold of the Guidelines, but KCA had also conducted additional testing on KCA products and did not confine testing to just the Guidelines.
In addition, manufacturers are cautioned to carefully craft representations regarding their products to remove room for misinterpretation.
This article was written by Teresa Torcasio, Partner, Marian Ngo, Senior Associate and Basimah Memon, Solicitor.
P: +61 3 8644 3623