What you need to know:

• Ad Standards’ Industry Jury has ruled a coffee cup supplier, Pinnacle Packaging, was misleading or deceptive in its marketing materials when it claimed they were “plastic free” and “compostable”.
• The case was brought by a competitor, BioPak, that brought proof Pinnacle’s products weren’t made by a company called rePAPER that was certified as plastic free.

When making claims that products are environmentally friendly and sustainable, it pays to keep evidence on hand. That’s the advice from Ad Standards, the industry body that adjudicates advertising complaints, after a decision finding a coffee cup supplier in breach of the advertising Code of Ethics.

In August last year, BioPak Pty Ltd, which makes food packaging, filed a complaint against a competitor, Pinnacle Packaging.

Pinnacle, BioPak argued, was telling businesses its “Truly Eco” brand did not contain plastic, was fully recyclable and was fully compostable. BioPak said there was no evidence to support these claims. Pinnacle strongly disagreed.

It is a notable case because it highlights the role of the rarely-used Ad Standards Industry Jury, which is an alternative a competitor can bring that avoids an in-court lawsuit. It also highlights the importance of having a well-evidenced supply chain. This is the Jury's first decision in two years.

In this case, Pinnacle claimed the leakproof coating inside its products was made by a company called rePAPER, which had the necessary certifications about its products being eco-friendly. BioPak said it had evidence rePAPER did not make the leakproof coating in Pinnacle’s products.

Pinnacle put forward a signed contract from its manufacturer stating the coating for its Truly Eco cups was purchased from rePAPER. It had signed purchase orders from late 2019 and early 2020.

BioPak, meanwhile, had an email from rePAPER in late 2021 stating it had “no business ongoing” with Pinnacle’s manufacturer. Likewise, rePAPER had carried out third party testing through Intertek, and had found the coating in Pinnacle’s products was not made by rePAPER.

The claims

Pinnacle Packaging claimed its products were the “first plastic-free cups in Australia”, that they were an “Environmental friendly alternative to plastic”, and that they were “100% plastic free”.

BioPak gave Ad Standards the report by Intertek that found the cups “contain a copolymer of poly (ethylene-co-acrylic acid) or similar which is a plastic compound”.

Effectively, Pinnacle could not prove its products were certified as recyclable.

On February 10, Ad Standards’ jury – Laura Hartley from Addisons, Lisa Ritson from Ashurst, and Christine Ecob from Johnson Winter & Slattery – found Pinnacle in breach of sections 1.1, 1.2 and 1.4 of the Code of Ethics, which govern the compliance of marketing material, whether ads are misleading or deceptive, and whether they “exploit community concerns” about the environment.

Pinnacle said it would modify its marketing material “without any admission that it has contravened any relevant legislation or the Code”. It also said the Industry jury had made a mistake in finding Pinnacle’s products weren’t made from rePAPER.

In a statement, Ad Standards said: "The case serves as an important reminder to advertisers that they must hold sound documentary evidence to support claims that consumers are likely to regard as objective and that are capable of objective substantiation, before publishing their advertising or marketing communication."