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Compostable Products Company Settles Deceptive Packaging Claims

CONTACT: Elliot Burg, Assistant Attorney General, (802) 828-5507

September 27, 2011

Penley Corporation, based in West Paris, Maine, has agreed to settle claims by Vermont Attorney General William H. Sorrell that the company violated the state’s Consumer Fraud Act by misrepresenting the availability of local composting options for its Full Circle line of “compostable” cutlery. The settlement requires Penley to pay $10,000 to the State of Vermont in penalties and costs, and another $10,000 to the Northeast Organic Farming Association of Vermont (NOFA Vermont) to support its Harvest Health Coupon Program.

Commenting on the settlement, Attorney General Sorrell said that Vermonters care about responsible disposal, including the compostability, of consumer products, and need to be able to rely on sellers’ claims about how those products may be disposed of. “If most Vermonters can’t compost an item in the state, then advertising the item as ‘compostable’ is deceptive,” he said.

Starting in June 2007, Penley marketed a “Full Circle” line of cutlery that was capable of being composted in a professionally managed municipal or commercial facility. The Full Circle packaging bore prominent references to compostability, including the term “compostable!” in sizable red type in two places, and a boxed Biodegradable Plastics Institute/US Composting Council logo next to a third, capitalized, “COMPOSTABLE.”

In fact, there are few municipal or commercial facilities in Vermont that accept compostable cutlery, and most Vermonters have not had, and do not have, practical access to such facilities. And while the Full Circle cutlery packaging did state that municipal or commercial composting facilities “may not exist in your community. Check to see if they do.,” this disclosure was printed in an almost unreadably small five-point typeface on the back of the package.

It is estimated that retail sales of Full Circle cutlery in Vermont totaled between 7,920 and 13,776 boxes, for which local consumers paid a total of between $10,216 and $17,771. Penley’s settlement with the Attorney General’s Office prohibits the company from representing to the public, directly or by implication, the compostability of any products sold in or into Vermont unless (a) there are municipal or commercial facilities reasonably and practically available to a substantial majority of Vermont consumers, which facilities accept those products for composting; or (b) there is a prominent disclosure on the product packaging of the absence of such facilities that is proximate to the compostability claim and is no smaller or less visible than the claim itself.

Penley’s payment to NOFA Vermont will support a program that offers matching coupons as an incentive to 3SquaresVT (formerly Food Stamp) recipients to buy healthy, farm-fresh foods at over 30 local farmers’ markets.

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