With misleading organic claims and greenwashing a major issue for certified organic products in Australia, leading organic industry group, Australian Organic, welcomed action by the Australian Competition & Consumer Commission (ACCC) to impose penalties of AUD$37,800 on Dreamz Pty Ltd (trading as GAIA Skin Naturals), for ‘misleading consumers’ that some of its products are free from synthetic chemicals ‘when they are not.’
GAIA described its Natural Baby Bath & Body Wash, Baby Shampoo and Baby Moisturiser as “Pure * Natural * Organic.” However, these products contain two synthetic chemical preservatives: sodium hydroxyl methyl glycinate and phenoxyethanol, the ACCC said.

“Businesses making organic claims must be able to substantiate those claims. GAIA’s claims may have misled consumers into thinking these products are free from synthetic chemicals when they are not,” ACCC commissioner Sarah Court said.

“We fully support the ACCC in targeting misleading organic claims and welcome the news that this company has been called to account for its behavior,” commented Sue Willis, general manager, Australian Organic.

Marg Will, secretary of the Organic Industry Standards and Certification Council (OISCC), which maintains the National Standards for Organic and Biodynamic Produce in Australia, said: “Australian Organic should be commended for its work in bringing this case to action. The ACCC decision is the best thing to happen in the organic industry in the last 20 years and represents a watershed moment.”

“It’s impossible to quantify exactly but somewhere in the order of 500 million dollars is lost every year because of products falsely claiming to be organic."

In Australia, all certified businesses must follow a stringent auditing process, over several years, run by accredited certification bodies such as Australian Certified Organic and NASAA Organic, to earn the right to display an organic certification logo on their products and to genuinely claim their product is organic or biodynamic.

The ACCC also identified concerns with a small number of Naturis Organic Breads’ products which do not contain synthetic chemicals or preservatives but contain a mix of organic and non-organic ingredients. "In response to our concerns, Naturis has amended its website and the relevant product labels," the ACCC said.

In 2017, major certified organic producers and processors told ABC news of their concerns that consumers are getting ripped-off and paying premium prices for products that do not meet Australian organic standards. Major organic firms like Arcadian Organic, Natural Meat Company, and organic grain processor and grower Kialla Pure Foods, raised concerns about brands using the word 'organic' on their packaging without organic certification and expressed that the law should mandate and prevent this.

Australian Organic chairman Andrew Monk said at the time that Australian Organic is "absolutely concerned about greenwashing" and the use of words such as organic, sustainable, natural and free-range by non-certified producers.

Dr. Monk, a former CEO of Biological Farmers Australia and current chairman of Murray River Organics and environmental services companies, said Greenwashing is the practice used by companies to make unsubstantiated claims about the origin and the ecological sustainability of their products.