Ad Standards finds coffee cup wholesaler made misleading environmental claims

The Ad Standards Industry Jury has found – following a complaint from competitor BioPak – Pinnacle International Wholesalers’ (Pinnacle) claims that its disposable coffee cups were plastic-free, fully recyclable and compostable were in breach of the Australian Association of National Advertisers (AANA) Code of Ethics.

An article published on Ad Standards’ website stated: “The case serves as an important reminder to advertisers they must hold sound documentary evidence to support claims consumers are likely to regard as objective and are capable of objective substantiation, before publishing their advertising or marketing communication.”

Environmental claims made by advertisements have been a topic of discussion, with the AANA flagging a consultations of the AANA Environmental Claims Code sometime this year.

The complaint made was made under section 1 of the AANA Code of Ethics (Code of Ethics), which allows for Australian businesses to submit claims against their competitors.

The sections of the Code that were found to be in breach were that advertising should comply to Commonwealth law (1.1), not be misleading of deceptive (1.2), and not exploit community concerns (1.4). There was also a complaint under section 1.3, that advertising shouldn’t contain a misrepresentation of a competitor, which the Industry Jury dismissed for insufficient evidence.

The Industry Jury was made up of three legal practitioners, in this case, Addisons’ Laura Hartley (who was also chair), Ashurt’s Lisa Ritson and Johnson Winter & Slattery’s Christine Ecob.

The type of advertisements the complaints were made of were on Pinnacle’s website and brochure – the former of which can be seen below.

(Click to enlarge)

In the initial response by the Advertiser, Pinnacle, it sought to reject the complaints as it concerned “‘labels or packaging for products’ and therefore the Claims are not subject to review under the Code of Ethics”, and further argued, as it was a wholesaler business, the claims were not subject to the Code. Pinnacle also said the claims made by the advertising material could be supported by the evidence.

On the first argument, the Industry Jury found although the advertisement materials were targeted towards business, the ultimate consumer would be a person using the coffee cups who might use the website or the brochures to verify the claims made on the cup itself.

Pinnacle claimed  its products were made with rePAPER, providing evidence to support this claim, with BioPak providing evidence to the contrary. The Industry Jury did not find there was sufficient evidence the cups were still being made with rePAPER product.

Pinnacle did acquire products from rePAPER in 2019 and early 2020, with documents indicating a continuous supply, but the Industry Jury was not satisfied Pinnacle could provide more recent evidence the cups were being made with that product.

As the Industry Jury found the product was not made from rePAPER products, it ruled the compostability claim to be false.

On the plastic-free claim, Pinnacle argued it had been certified through Control Union Certifications to use a “Plastic-Free Certification Mark”.

However, the Industry Jury stated: “The Plastic-Free Claims are made in very broad terms and have not been qualified in any way… An average consumer would be entitled to expect that the Products do not contain plastic in any form and not simply that the Products had been tested to a specific standard referenced by the Plastic Free Certification Mark.”

A report by Intertek, a third-party testing body, found the coffee cups did contain plastic. In its response to the findings, Pinnacle rejected this report.

For the recyclability claims, Pinnacle argued the cups were recyclable even if they were not appropriate for kerbside recycling facilities.

The Industry Jury rejected this, and stated: “It is a fundamental requirement that if a product is represented in absolute terms as being a fully recyclable product or 100% recyclable, it should be capable of being recycled through standard kerbside recycling facilities in Australia. An average Australian consumer would expect that in the context of claims that create an overall impression that use of them will reduce landfill and that they are environmentally friendly, the Products must in actuality be capable of doing these things.”

It was noted the website had since been updated to clarify with an asterisk that: “Truly Eco Cups are recyclable when collected as a clean stream of only Truly Eco cups. Please contact Pinnacle to discuss recycling options”. The Industry Jury found this would be sufficient to qualify the claim.

In response to the findings, Pinnacle said it rejected some of the Industry Jury’s findings, including the establishment its cups were not made with rePAPER and the acceptance of the Intertek report.

The Advertiser stated: “Notwithstanding, and without accepting the accuracy of the Industry Jury’s determination in relation to those complaints and without any admission that it has contravened any relevant legislation or the Code, the Advertiser will modify its Advertising Material by taking such steps to modify its website and the downloadable brochure also available on that website so as to ensure that in the future it can adequately substantiate the claims wrongly found to be in breach in the determination.”

At the time of writing, Pinnacle’s website is not accessible, with a statement reading: “We are making some updates”.


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