Pulling the wool over tourism rugs and duvets nets big fine

Princess Wool Co and Nangong Limited appeared in Auckland District Court today on the charges brought by the Commerce Commission.

Princess Wool, Koo Yoarn Lee and Kevin Stocker entered not guilty pleas. Nangong, Yun Qiang Hou and Caicai Hou were remanded without plea until March 8, 2016.

Princess Wool and Nangong sell their products to Auckland retailers or wholesalers that mainly cater to the Asian tourist market. They also have Auckland premises from where their product is sold to organised Chinese and Korean tour groups.

Princess Wool faces 50 charges against the business and Mr Lee and Mr Stocker have 74 charges. All 124 charges relate to misrepresentations made about the composition of their alpaca or cashmere duvets.

In an earlier case Auckland souvenir company Wild Nature NZ and its director Sung Ho (Stanley) Park were fined $243,444 and $25,000 respectively in the Auckland District Court for false labelling of woollen goods.

The company and Mr Park faced more than 30 charges of falsely claiming the garments were alpaca or merino wool following a Commerce Commission investigation.

Tourists from China, Korea and Taiwan from organised tour groups were ferried to Wild Nature’s premises, where they were sold New Zealand-made alpaca rugs.

The rugs came from Peru.

Wild Nature also created certificates and brochures claiming the rugs had the approval of professional entities that do not exist.

 Wild Nature also pleaded guilty to offering duvets for sale labelled as containing exclusively or predominantly alpaca or merino wool fibre when the alpaca fibres were only a small part of the duvet mix and there was no merino wool in the 'merino' duvets.

Tourists paid as much as $4000 per rug, which is up to four times more than they would have paid elsewhere for properly labelled rugs.

In September 2013, while awaiting sentencing having pleaded guilty to the charges it faced, Wild Nature entered voluntary liquidation.

The commission sought leave to continue the prosecution.

This  was opposed by the liquidator but the High Court ruled sentencing should proceed.

Justice Geoffrey Venning said companies facing prosecution by regulatory authorities should not think they can avoid the prosecution by voluntary liquidation.

In sentencing, Judge David Sharp said the court needed to protect the tourist industry which is of major importance nationally, and the prosecution of Wild Nature was “an occasion where the label of fraud can appropriately be applied."

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