Baby products firm Terra hits back as Commerce Commission fields complaints over face masks

The Commerce Commission has received three complaints about Terra face masks. Photo / Terra website

The Commerce Commission has fielded three complaints about Terra-branded surgical face masks sold in supermarkets but the company says it's been unfairly targeted by a "disgruntled customer" and is taking legal advice.

Terra, a baby products firm based in Mangere, says someone has been been sending letters sealed in envelopes to supermarkets and media organisations questioning the product's quality, labelling and price in an "attempt to damage the brand".

Its masks are sold in some supermarkets for $52.99 for a pack of 50.

A spokesperson for the Commerce Commission said it had received 70 complaints about face masks in general since March 26.

Of those, three had been made about Terra masks - one in July, August and another this month - alleging misrepresentations about country of manufacture and/or that the masks are made of organic materials.

The commission is "engaging with Terra" to "understand the representations made, and whether the representations comply with the law", the spokesperson said.

A spokesman for Terra, owned by Auckland-based personal care manufacturer Zeta Group, told the Herald the allegations made in the letter had no substance, its face masks were certified by MedSafe and TGA, and it had not misled the public in any way.

The Herald has seen certification documentation that shows Terra masks have been tested and are of a medical-grade quality, as its packaging claims.

Its masks, and some of its nappies, are manufactured by Chinese company Fujian Hanhe Products Co Ltd - owned by Zeta Group. But the claims of the product not aligning with Terra's "made in New Zealand" and "from natural materials" were incorrect, the spokesman said.

He said Terra was "confused" by the situation and did not understand why it was being targeted.

The company has engaged legal advice to see if the actions taken are criminal.

At least four envelopes with the letter had been delivered - one each to Foodstuffs head office and a Foodstuffs supermarket and two to media organisations.

Terra originally suspected that the letter, and a similar blog post written on Chinese-language site SkyKiwi.com, were the actions of a competitor motivated by financial gain by damaging the brand's reputation.

But it says it now has information from the supermarkets and believes it is the actions of a disgruntled customer who had complained about the product at the supermarket they purchased the product from.

"[The person] basically went back to the Pak'nSave they bought it from and complained about it and they asked for some freebies. Pak'nSave said no, the customer then came to us and asked for freebies from us due to it, which we also said no to," the spokesman said.

The customer had seen a Chinese-language sticker from the first batch - in about 60,000 packs - that said the masks were non-medical protective masks, and had asked for free product on the basis that the product was not up to standard, he said.

"Why they were unhappy with the product, I'm not sure, perhaps they saw the Chinese sticker [in the pack] and drew the conclusion that we were lying and wasn't happy when they were told we weren't lying.

"We have no idea who the person is exactly," he said, adding that it was hard to know how much "actual damage" the spreading of false information was doing to the brand.

The spokesman said the reason the note was included was to comply with Chinese law.

During the lockdown period in China, the Government of China implemented a temporary regulation that required the note to be supplied with face mask products - but the mask quality remained the same and the masks provided were of a surgical grade, he said.

A Foodstuffs spokeswoman confirmed the co-operative was aware of the situation and said it was confident its supplier had met all of its required supply and certification obligations.

"We are unsure whether the letter has been sent by a consumer or a competitor but whatever the underlying motives we are confident in our supply chain," Antoinette Laird, Foodstuffs head of corporate affairs and marketing, said.

A note provided in Terra's first batch, of about 60,000 packs, of surgical masks. Photo / Skykiwi forum

"Terra's website clearly states 'Everything we produce is manufactured in our factory in New Zealand (Except The TERRA Surgical Mask), where we adhere to strict safety protocol and never compromise on quality' – so at no time has there been a claim the product is manufactured in New Zealand. Like any product made overseas, Terra masks are tested, certified and registered accordingly with Medsafe, TGA, EU and the FDA," she said.

"With the exception of the Terra masks, all other Terra-branded products are manufactured in New Zealand. As such, we have no issue with their proudly New Zealand claims."

Terra is an offshoot of Zeta Group to allow the company to import its baby wipes and skincare products into China.

'Price gouging' claims

The letter claimed Terra-branded face masks manufactured by Fujian Hanhe Products Co could be bought for 5 cents each.

The spokesman for Terra refuted this, saying that was impossible and did not include cost of air freight, warehousing and distribution: "It's not remotely possible".

Terra masks are sold through its website for $48 for a pack of 50, marked down from $68, and in some supermarkets for $54.99. Individual supermarkets and pharmacies were able to set their own prices for the masks, he said.

Terra managing director, Sheng Liu, said the company decided to introduce face masks to its range after it observed a shortage of the PPE in this country and the "unreasonable prices" they were being sold for.

"After discounting the lack of NZ-made options, Terra had to quickly investigate offshore suppliers and discovered it was possible to source quantities of quality masks "at a price more acceptable to New Zealanders from China".

Liu said the margins were thin for Terra and retailers that sold its masks.

He explained that its masks "prior to importing were checked and met all compliance standards".

"At this time, being in the midst of the Covid-19 pandemic, countries like China were continually reviewing and changing regulations as information about the virus emerged. This made it very difficult to comply, hence one of the mask shipments contained labels specific to the Chinese market which were later retracted, which is why not all shipments have this label."