Business

Canada Goose fined by China for 'misleading' consumers about parka material

Toronto-based Canada Goose Holdings Inc. is in hot water with China, which has fined the winter-apparel maker for allegedly misleading consumers about the materials it uses.

Regulator alleges Toronto-based company overstated quality of down

Jackets are on display at the Canada Goose showroom in Toronto in November 2013. Canada Goose Holdings has been fined around $88,000 by China for allegedly making misleading claims about the materials it uses. (Aaron Vincent Elkaim/The Canadian Press)

Toronto-based Canada Goose Holdings Inc. is in hot water with China, which has fined the winter-apparel maker for allegedly misleading consumers about the materials it uses.

The country's regulator, the National Enterprise Credit Information Publicity System, fined the company 450,000 yuan, the equivalent of about $88,202.

As first reported by Bloomberg News, a commentary in China's state-affiliated Economic Daily newspaper Wednesday details the fine and accuses the company of flouting Chinese advertising laws.

The complaint centres on the company's claim it uses "Hutterite down," the warmest down available. It alleges the company uses other kinds of down in most of its products.

"The main filling is ordinary duck down, but it costs tens of thousands of yuan at every turn. Is the Canadian goose down jacket sold for warmth or IQ tax?" the commentary says. 

In an emailed response to CBC News, the company said a technical error on a partner website was behind confusion about its products' materials.

"Earlier this year a misalignment of text was found on a partner site, Tmall, in our [Asia-Pacific] region. The error was corrected immediately," the email said.

Tmall is one of the largest online platforms for Chinese consumers.

The parka-maker said it uses both goose and duck down, depending on the construction of the garment.

Canada Goose isn't the first foreign-owned apparel company to tangle with China about its marketing messages.

Earlier this month China fined Swedish retailer H&M 260,000 yuan ($51,000) for claims that some apparel items were exclusive to China; this after, in April, H&M came under fire for a map on its website and its depiction of China's territory in the South China Sea.

Relations soured

Relations between Canada and China have soured since the detention of Huawei executive Meng Wanzhou at the Vancouver Airport in December 2018.

The U.S. wants to extradite Wanzhou to New York, where she faces fraud charges. A hearing in B.C. Supreme Court concluded Aug. 18, with the judge's decision expected in October.

Jia Wang, interim director of the China Institute at the University of Alberta, says relations between Canada and China are at what some would describe as their lowest point in the past two decades. (Submitted by Jia Wang)

Since the arrest, the relationship between Canada and China can best be described as "very fraught," said Jia Wang, interim director of the China Institute at the University of Alberta in Edmonton.

"Some would even say this is probably one of the low points of our bilateral relations over the past couple of decades," said Wang.

While it would be a stretch to draw a direct line between the Canada Goose fine and the geopolitical situation, said Wang, the downturn in relations was most notable with the detention of Canadians Michael Kovrig and Michael Spavor shortly after Meng's arrest. But there have been economic retaliations as well, she said. 

"China's ban on the imports of Canadian canola seeds, for example — that's widely believed, for good reason, as a retaliation measure levied against Canada by the Chinese government."

With its population of 1.4 billion and a growing middle class estimated at somewhere between 300 and 700 million, Wang said China is "the largest luxury goods market in the world," representing about one third of the total global market.

"So that's why a lot of luxury goods companies around the world, not just Canada, are really eyeing the Chinese market … because they see a downturn of their sales in other markets, the developed world markets, but they are hoping, of course, to maintain their revenue levels.

"They are looking at China, a big market, and it's not shrinking. It's still growing."

People line up outside the Canada Goose flagship store in Beijing, in November 2019. China is the biggest market for luxury goods in the world, says Wang. (Submitted by Jia Wang)

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