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Shonky multinationals

Companies are trading on weak consumer laws in other countries to maximise profits.

August 2016

We've launched the call for nominations for the 2016 CHOICE Shonky Awards and we'd love to hear your suggestions.

From a cheeky experiment in 2006, the Shonkys have now turned into an important tool for driving market change.

We have used the awards to bring to life parts of the Australian Consumer Law – like in 2012, when we gave the Jetset Travelworld group a Shonky for requiring consumers to sign away their rights to a refund if travel bookings made with a credit card weren't fulfilled.

We argued that this provision of the standard contract was an unfair contract term and therefore void. The ACCC swung into action and shortly afterwards, Jetset Travelworld agreed to amend its contracts.

We were also thrilled when Smiths and Unilever were recently fined for selling rice crackers and ice creams with logos that said they were approved under national school canteen guidelines. This was off the back of our 2015 Shonky Award that targeted fake school canteen logos on a range of kids' products.

Let's be clear about what was happening here. These companies were lying, on the front of packs. They had even invented special logos to lend credibility to the lies.

As is often the case with Shonkys, the culprits were not small, unsuspecting businesses but large multinationals that have no excuse for not understanding the law. There's no shortage of multinationals in the Shonkys hall of fame, which includes the likes of Samsung, Ikea, Amazon and LG. Major food companies feature prominently – last year we highlighted Coca Cola's funding of a sham organisation aimed at promoting the value of sugary drinks as part of a healthy lifestyle.

What worries us more and more is that the bad behaviour we notice in Australia is often the 'nice' side of an international operation.

Take Coke, for example. In Fiji, they don't waste time on elaborate PR scams – they go directly to children by sponsoring high school athletics. In a country that ranks second in the world for the rate of death from diabetes, Coke wants to hook children on sugary drinks at an early age.

In America, vehicle manufacturers take advantage of differences in standards to sell safe cars in the United States but leave out basic safety features like airbags and stronger bodies from the models they sell in countries like Mexico and Brazil. These companies are trading on weak consumer laws to maximise profits, contributing to dramatically higher rates of motor accident deaths in those countries.

While we'll always focus on calling out shonky behaviour in Australia, we increasingly think we have a responsibility to tell Australian consumers about how major companies are treating consumers in less developed economies.

Australians care about how businesses behave overseas. And shonky is shonky, wherever it occurs.