Grill'd Sued by ACCC Over Alleged Greenwashing

The consumer regulator has sued Grill’d over allegations the burger retailer engaged in greenwashing by dramatically overstating how much money it was donating towards one of its key environmental campaigns.

The Australian Competition and Consumer Commission (ACCC) on Tuesday announced it had launched federal court action against Grill’d, alleging it misrepresented its Tree Day Tuesday campaign for more than three years.

The ACCC alleges that between January 2021 and April 2024, Grill’d represented to customers it would donate $1 from every burger purchased on a Tuesday towards the planting of trees.

While the restaurant chain sold more than 5m burgers during the period, only about 4% of these resulted in a donation because the terms and conditions were so restrictive, the ACCC said.

On Tuesday, Grill’d acknowledged it had donated just $250,000 to tree planting as a result of the promotional campaign.

The ACCC alleges Grill’d did not adequately disclose to customers the fine print that dictated which orders would result in a $1 donation.

Among the terms and conditions were that customers had to be members of the chain’s Relish loyalty program.

Only dine-in orders made at the front counter of a Grill’d store qualified, whereas online orders, takeaway, and even those made in a restaurant but at a table via a QR code did not.

The ACCC chair, Gina Cass-Gottlieb, said the regulator considered the conduct to be a form of greenwashing.

“Grill’d is a large fast-food chain and operates across Australia, meaning that its conduct had the potential to mislead many consumers nationwide about the environmental benefits of their purchase,” she said.

A spokesperson for Grill’d said the Tree Day Tuesday promotion was “undertaken with positive intent” that resulted in the planting of 100,000 trees and restoration of over 40 hectares of forests.

“Grill’d takes Australian Consumer Law very seriously, and our reputation is forged in trust and doing the right thing in the communities where we live,” they said.

“Grill’d has worked internally and with all stakeholders, including the ACCC, to ensure that brand and sustainability initiatives undertaken are clear and cause no confusion in the eyes of the Australian public.”

The restaurant chain, which operates 180 stores, has previously been the spotlight for a string of controversies involving pay and conditions, including that it employed young people as part of a training program and under a legal loophole was able to pay them less than minimum wage.

The company is facing a separate class action brought by Gordon Legal, with the support of the retail workers’ union, the SDA, on behalf Grill’d workers who allegedly didn’t get their 10 minute paid rest breaks on shifts of four hours or more.

When the class action was launched in December last year, the Grill’d chief executive, Simon Crowe, told media the company took its obligations to its staff - “our greatest asset” - “very seriously”. He said the company’s recently approved enterprise agreement made Grill’d among the highest-paying employers in the industry.

On Tuesday, Grill’d said it had a “proud history” of supporting and donating to community groups across Australia.

“We are an Australian business, and supporting Australian communities and those in need has and will always be part of who we are,” the spokesperson said.