Behind the scenes: brands bitten by the ACCC
Australian discount chain store Dimmey’s is the latest organisation to incur the wrath of the ACCC, with a line of children’s dressing gowns judged to not have complied with the ACCC’s safety standards.
It is alleged that in May and June 2010, Dimmeys supplied childrens dressing gowns which did not carry any fire hazard information label as required by the standard,” reads an ACCC release. “It is also alleged that between April 2009 and August 2010 Dimmeys supplied further childrens dressing gowns which did not have their fire hazard information label attached in the correct position in accordance with the standard.”
The ACCC has begun legal proceedings and is seeking…
• declarations that Dimmeys contravened the Act
• pecuniary penalties for supplies made after 15 April 2010*
• an injunction preventing Dimmeys from supplying childrens nightwear
garments unless they comply with the standard
• an order that Dimmeys implement a trade practices compliance program, and
Dimmey’s marketing manager Earnest Kuhl tells Marketing magazine just how hard it is to keep up with the ACCC’s stringent standards.
“We buy most of our stuff from overseas. So sometimes in those stock lots there’s stock we haven’t bought but it ends up in with it,” he tells Marketing magazine, “and because Australia has such tight regulation, some of the merchandise doesn’t meet the ACCC standards.”
“We then have to recall the merchandise, we also have to put ads in the paper, so it’s a huge expense,” Kuhl explains. “We’ve got 44 stores. We’re in four states, we’ve got to put ads in the daily papers in four states. It’s just something we have to do to accord with their demands.”
It may seem a harsh penalty, but Kuhl seems to accept it as inevitable part of running a national business. Luckily, consumers don’t seem to mind too much when the ACCC cracks down, they’ll continue to shop at Dimmeys.
Kuhl says Dimmeys sometimes get clothes returned to stores after ACCC announcements, but there isn’t a shift in brand perception for customers. Dimmeys never get angry phone calls or letters from consumers related to ACCC proceedings.
If you haven’t thought about Dimmeys as a national brand for a while, it’s probably because you live in the city. The chain is flourishing since it made country stores its focus. Kuhl says monthly catalogues, Dimmey’s primary marketing tool, are wildly successful and the brand is still growing.
“All our country stores go exceptionally well,” he tells Marketing magazine.
“We mainly do catalogues. It’s the most cost efficient way for us, and we do letterbox drops. Because our stores are so scattered it doesn’t pay to do TV, there’s just too many country zones to go into.
You might not see Dimmey’s making noise on TV, but the retailer knows it’s on to a good thing with letterbox drops.
“We wouldn’t do the catalogue if we weren’t getting a sales spike. After our catalogues are sent out, we have people outside the door trying to get in. A lot of the stuff we have on the front page will last a day.”