Costco Australia hit with AUD 33,000 penalty for false country of origin claims for lobster

Costco Wholesale Australia has paid AUD 33,000 (USD 22,200, EUR 21,100) in penalties for lack of compliance with country of origin labeling requirements.

According to the Australian Competition and Consumer Commission (ACCC), Costco Australia received two separate infringement notices for selling two packages of lobsters in its Casuarina, Western Australia store labeled “Kirkland Signature PREVIOUSLY FROZEN WHOLE COOKED WA LOBSTER” and “Australian Lobster.” However, the lobsters had actually been imported from Canada.

Additionally, the product packaging used the Australian-made kangaroo logo and a chart indicating that the lobsters were exclusively Australian when they were not, according to the ACCC.

“Selling goods with an incorrect country or place of origin label is a breach of Australian consumer law,” ACCC Deputy Chair Mick Keogh said. “Many shoppers pay a premium to purchase Australian seafood rather than imported products, which makes the accuracy of the labelling a crucial part of enabling consumers to make an informed choice. While a small number of consumers were impacted in this instance, this conduct involved a large and sophisticated business.”

Other seafood products being sold at the store were also displayed for sale with the allegedly misleading labels, the ACCC said.

Australia implemented its country-of-origin food labeling information standard in 2016, covering most food available for sale at retail in the country, including imported food. The standard requires that if a product is grown, produced, or made in Australia, the label must contain a kangaroo-triangle logo indicating the product is of Australian origin, a bar chart indicating the percentage of Australian ingredients in the food, and explanatory text stating whether the product was grown, produced, or made in Australia.

Separately, section 29 of the Australian Consumer Law prohibits Australian businesses from making false or misleading representations about the place of origin of the goods they supply to consumers. However, the ACCC said the payment of a penalty specified in any infringement notice it publicizes is not an admission the company has contravened the law.

Costco, which operates 15 stores in Australia, is one of the largest retailers in the world.

“This action by the ACCC is a reminder to all businesses, large or small, of the importance of ensuring that country of origin labelling is accurate and complies with the country-of-origin food labeling information standard,” Keough said.

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