ACCC v Grill’d – Misleading and Deceptive Conduct in “Greenwashing” Promotions
Introduction
The ACCC has commenced proceedings in the Federal Court against Grill’d over alleged misleading and deceptive conduct for statements made in connection with the “Tree Day Tuesday” promotional campaign. It is being argued that a lack of transparency over the conditions of the promotion on social media has breached several sections of the Australian Consumer Law (ACL).
Background
Grill’d is a fast-food restaurant chain which operates roughly 173 stores across Australia, both directly and through franchisees. From 2021, it is alleged that Grill’d began running a promotional campaign branded “Tree Day Tuesday” in which it was represented that one dollar from every burger purchased on a Tuesday would be donated towards the planting of trees.
However, it is asserted by the ACCC that for a purchase to lead to a donation, the following conditions had to be met (the “Donation Conditions”):
The purchase had to be made on a Tuesday;
The purchase had to include a burger or a salad;
The buyer had to be a member of Grill’d’s Relish loyalty program;
The purchase had to be dine-in only;
Dine-in orders had to be placed at the front counter (not via QR code or at a table);
The buyer had to scan their loyalty program bar code when ordering, and
The purchase could not be made in conjunction with any other offer.
Given the above conditions, it is alleged that only four percent of burger purchases made on Tuesday’s during the promotional period actually qualified for a donation.
The Representations on Social Media
In bringing the proceedings, the ACCC referenced several statements made in promotional posts that posted on Grill’d social media accounts, for example:
“If you don’t have time in that busy schedule of yours to plant a tree today, swing by for a burger instead and we’ll plant one for you. Every burger purchased by our Relish members today helps grow our Grill’d Forests. That’s something for you and something for the planet”.
“For every Tuesday Grill’d burg purchase, $1 goes towards planting a tree”.
“Every burger purchased today contributes to growing our 100-year protected Grill’d forest”.
The ACCC alleges that some of the Donation Conditions, such as the requirement that the buyer had to be a Relish member were mentioned in some, but not all of the highlighted posts. Others, such as the requirement that the purchase could not be made in conjunction with any other offer, do not appear to have mentioned in any of the highlighted posts.
The case argued by the ACCC
The ACCC is arguing that the effect of the social media representations, which often omitted many of the Donation Conditions, had the effect of significantly overstating the circumstances in which a purchase would lead to a donation.
This is alleged to have a constituted a breach of:
Section 18 of the ACL which prohibits conduct that is misleading or deceptive; and
Section 29 of the ACL which prohibits false or misleading representations in connection with the supply of goods.
It is alleged that these breaches caused harm to consumers and competition by:
Depriving consumers of making an informed choice with respect to a burger purchase at Grill’d, as they may have incorrectly believed that a donation would flow from their purchase; and
Putting Grill’d at an unfair advantage over its competitors by contribution towards a perception of Grill’d as being more sustainable and environmentally focused than it was in reality.
Key takeaways
While this case is before the Federal Court and has not been resolved, it does provide some lessons to franchise businesses:
Having conditions attached to obtaining the benefit of promotions that are not clearly communicated to consumers could result in misleading or deceptive conduct claims being made.
The ACCC has made it a priority in recent years to take action against companies making what it considers to be “greenwashing” representations.
Given the nature of social media posts and the fact that potential consumers may only view one post or advertisement in isolation, it may not be sufficient if information which ameliorates the misleading effect of a representation is present in some, but not all related posts.
Should you wish to discuss any aspect of this post please contact:
Alicia Hill
Principal
T: +61 3 9611 0180 | M: +61 484 313 865
E: ahill@sladen.com.au
Jake Cole
Special Counsel
T: +61 3 9611 0112 | M: + 61 413 557 157
E: jcole@sladen.com.au
This article was prepared with the assistance of Tony Huang, Law Clerk.
