Methven pleads guilty over false ads, fined $50k

Methven pleads guilty over false ads, fined $50k

By Paul McBeth

Oct. 4 (BusinessDesk) – Methven Ltd., the manufacturer of taps and bathroom fittings, pleaded guilty to misleading customers with false advertising, and has been ordered to pay $50,000 plus costs.

Judge Russell Callander told the Waitakere District Court the manufacturer’s ads involved “more than carelessness” and could be seen as “deliberate,” according to a Commerce Commission media release.

The ads claimed customers could achieve significant savings in both hot water energy and total water use by installing a Satinjet showerhead with a nine or 14 litre flow restrictor compared to regular showers. The Commerce Commission found some 60% of New Zealand showers already flow at nine litres or less, so any savings would be minimal.

“It is important that businesses clearly disclose any important or qualifying information so that consumers have all the necessary details to be able to make an informed decision,” said Greg Allan, commission enforcement manager, Wellington. “Many consumers are probably not aware of the per-minute flow of their household water and so would have incorrectly presumed that they would have made the savings promised.”

Methven’s shares were unchanged at $1.75 in trading today, and have gained 6.1% this year.

When the commission said it will pursue prosecution in July last year, the manufacturer said the claims were indicative of the savings that could be achieved for showers connected to mains with flow rates of 20 litres per minute, and that it had voluntarily recalled and altered all advertising once an investigation was underway.

(BusinessDesk)

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