Grill'd Gets Grilled: What the ACCC's Greenwashing Case Means for Marketers

Adam Bieder
6 hours ago
4 min read

From Production to Perception

Historically, businesses have primarily competed using operational efficiency, effective means of production and economies of scale. Toyota’s post-World War II ‘Toyota Production System’, which emphasised manufacturing efficiency and the elimination of operational waste, is the classic example.[1] By contrast, modern commercial competition has evolved to align with consumers’ increasing interest in sustainability, ethical practices and corporate social responsibility (‘CSR’).

Successful businesses have responded by integrating these contemporary values into their branding, marketing and corporate reporting. Toyota reflects this trend, publishing its 18^th annual sustainability report in 2024.[2] This evolution has shifted competition from production to consumer perception, with significant legal implications for the representations businesses make. The Australian Competition and Consumer Commission’s (‘ACCC’) recent proceedings against Grill'd provide a timely illustration of how sustainability-based marketing may attract regulatory scrutiny when commercial ambition extends beyond what can be substantiated.

The Commercial Value of Sustainability

Sustainable and ethical business practices have evolved from a largely voluntary exercise in corporate philanthropy to a significant commercial driver. Increasing consumer demand, shareholder scrutiny and mandatory reporting requirements have elevated environmental and social governance to a core element of commercial strategy.

According to reports, 82% of consumers prefer a brand’s marketable values to align with their own and 74% confirm that a company’s environmental practices influence their purchasing decisions.[3] This demand has made sustainability a genuine commercial differentiator, as consumers increasingly base purchasing decisions on shared values rather than price or quality alone. As competition intensifies, businesses are increasingly incentivised to make ambitious marketing representations that distinguish their brands and enhance their competitive position. That same dynamic that creates commercial value is what creates legal risk in marketing practices.

The Australian Consumer Law: Defining the Boundary of Competition

The Australian Consumer Law (‘ACL’) is the primary legislative framework within the Competition and Consumer Act 2010 (Cth) which exists to regulate business practices, maintain national standards for fair trading and protect consumer rights.

Among its most commercially significant provisions are:

Misleading or deceptive conduct (s 18)
False or misleading representations (s 29)
Unconscionable conduct (s 21)
Unfair contract terms (s 23).

Together these provisions establish important legal standards governing commercial conduct in the Australian marketplace.

While commercial institutions remain free to promote genuine sustainability initiatives, these provisions ensure that representations made in pursuit of competitive advantage accurately reflect the products, services and initiatives being promoted.

Grill’d: When Competitive Marketing Meets the ACL

The commercial and legal tensions discussed above are reflected in the ACCC’s recent proceedings against Grill’d, an Australian burger chain that has built much of its brand identity around sustainability and ethical sourcing.

The ACCC alleges that between January 2021 and April 2024, Grill’d’s ‘Tree Day Tuesday’ campaign constituted a form of greenwashing by overstating the circumstances in which $1 donations towards tree planting would be made.[4] Specifically, it alleges Grill’d engaged in misleading or deceptive conduct, and made false or misleading representations, by conveying that Tuesday purchases would result in environmental contributions. According to the ACCC, those representations were subject to several eligibility requirements that were allegedly not adequately disclosed, including that purchases be made by a ‘Relish’ member, be dine-in only, have the member’s barcode scanned at the counter (with QR-code table orders excluded), and not be made in conjunction with another promotional offer.[5]

Viewed objectively, the ACCC's allegations are directed to the overall impression conveyed by the campaign, which it contends did not accurately reflect the circumstances in which donations would be made, as those significant eligibility requirements materially qualified the advertised benefit. The ACCC alleges that only around 4% of the more than five million burgers purchased on Tuesdays during the relevant period ultimately qualified for a donation, a gap it says was reflected across the 26 advertisements at issue in the case.

Accordingly, the ACCC alleges that consumers were deprived of the ability to make informed purchasing decisions because the campaign overstated the circumstances in which donations would be made.[6] It further alleges that these representations may have afforded Grill’d an unfair competitive advantage over competitors promoting comparable sustainability initiatives.[7] The ACCC is seeking declarations, penalties, costs and other orders.

Regardless of the ultimate outcome, the proceedings demonstrate regulators’ increasing willingness to scrutinise sustainability-based marketing under the ACL.

Compliance as a Competitive Advantage

Businesses invest significant financial, operational and reputational resources into developing sustainability initiatives and the marketing campaigns that communicate them. However, where the representations underpinning those campaigns fail to satisfy the Australian Consumer Law, the resulting regulatory scrutiny, litigation and reputational damage can undermine the very competitive advantage the business sought to create.

In this environment, compliance should no longer be viewed as a legal exercise undertaken after a marketing strategy has been developed, but as a strategic consideration informing its development from the outset. Businesses no longer compete despite the legal framework in which they operate; they compete successfully because they understand how to operate within it. Viewed in this way, the ACL is not simply a mechanism for enforcing legal standards, but a framework that enables businesses to compete confidently, credibly and sustainably in an increasingly values-driven marketplace.

Conclusion

The rapidly growing commercial value of sustainability and CSR initiatives presents businesses with significant opportunities to distinguish themselves in an ever more competitive marketplace. However, as these values become integral to corporate strategy, so too must the legal frameworks that govern how they are communicated. The businesses best positioned to succeed will not be those making the boldest claims, but those capable of substantiating them.

The content in this Article is intended only to provide a summary and general overview on matters of interest. It is not intended to be comprehensive nor does it constitute legal advice. It should not be relied upon as such. You should seek legal or other professional advice before acting or relying on any of the content.

The solicitors at BlackBay Lawyers can provide specialised and detailed advice for athletes and their advisors. If you require advice, please feel free to contact BlackBay Lawyers on (02) 8005 3077 or via www.blackbaylawyers.com.au for a confidential discussion with one of our solicitors.