Watchdog probes NZ team supplier

An Auckland sportswear company that kitted out the New Zealand Commonwealth Games team is under investigation by the Commerce Commission for alleged breaches of the Fair Trading Act.

Otara-based Sports Resources Ltd was raided by the commission late last year, after it was tipped off that the company was passing off China-produced sports gear - including Commonwealth Games team uniforms - as New Zealand made.

A Sports Resources employee - who did not want to be identified - told the Herald the commission seized garments on December 22, understood to be the day they were to be delivered to adidas.

The clothing was eventually returned to Sports Resources by the commission, on the condition it was relabelled as made in China, the employee said.

Commerce Commission Auckland manager Graham Gill this week confirmed an investigation was under way into Sports Resources and search warrants had been executed on Sports Resources premises before Christmas. The commission had spoken to "a number of parties" in the matter but Sports Resources was the only business searched, he said.

However, Mr Gill would not comment on the nature of the investigation, nor would he confirm the seizure of Sports Resources' stock.

The Companies Office lists three directors on the Sports Resources board: Anthony Grant Botica, Laurence Clifford Hullena and Maurice John Prendergast.

Hullena, 40, is a former Wellington prop. He played nine matches for the All Blacks in 1990-91 but no tests.

Sports Resources Ltd was formerly known as Carisbrook Clothing.

Company job sheets, copies of which were obtained by the Herald, instruct staff to change existing labels to the adidas brand or New Zealand label, in one case saying: "existing labels are to be replaced with Carisbrook New Zealand labels".

Mr Botica and Mr Hullena said on Wednesday that a Commerce Commission investigation into the company's practices was "ongoing" but were reluctant to comment further.

However, the men said relabelling clothing with the name of the manufacturer was legal and standard throughout the industry.

Mr Botica confirmed the investigation was looking at "issues regarding relabelling" of products.

Mr Hullena said that if the practice had happened, it was most likely the fault of Sports Resources employees.

"Staff may have put the wrong labels on to it. If there was a problem, it has been put right."

Mr Botica said it was "unfortunate" that the story had come to light at this time, as there were aspects of the matter that could not be discussed while an investigation was under way.

Adidas managing director Greig Bramwell confirmed the company was aware of the investigation into Sport Resources. He confirmed Sports Resources had the contract to supply Commonwealth Games gear to adidas.

Mr Bramwell would not say whether adidas had been told by the commission to relabel any of the gear subsequently distributed to the Commonwealth Games squad, as an investigation was still under way.

Sports Resources had been contracted to supply adidas with "leisurewear products" for the Games team, including shorts, T-shirts, polo tops and caps.

"The product that the athletes are wearing ... the feedback we are getting is very favourable, and it has been produced to the highest level and has been labelled properly."

Adidas has been supplied by Sports Resources since 1999 and the companies would continue to do business in the future, he said. However, he would not comment on what would happen if charges were ultimately to be brought against Sports Resources.

Consumer Institute boss David Russell said changing labels showing a garment's country of origin was an insidious practice that was "out-and-out misleading". A company was quite within its rights to remove the country-of-origin labels from a garment but was breaching the Fair Trading Act if it was replacing them with made in New Zealand tags.

By fobbing Asian- or China-produced clothing off as New Zealand made, the seller would be able to charge a premium, Mr Russell said.