WORLD has accepted it may have broken the law by attaching tags indicating that t-shirts made in Bangladesh had actually been made in New Zealand.

Photo: WORLD

The New Zealand fashion label attached tags with the statement "Fabrique en Nouvelle-Zelande".

Earlier this year, WORLD caused controversy when it was revealed they had attached the swing tags to t-shirts manufactured by the low-cost brand AS Colour.

Its co-founder, Denise L'Estrange-Corbet defended the move, saying the company had made no attempt to conceal where the garments were made.

"I've never had anyone come back and say that they were misled by this in the seven years we have been doing this," she said at the time.

"I would have thought the New Zealand public was a bit smarter than that and could actually see the tag sewn into the garment which quite plainly states where it is made."

However, a subsequent investigation by the Commerce Commission found the tags were liable to mislead consumers and likely breached the Fair Trading Act.

"The Fair Trading Act prohibits businesses from misleading consumers about a product's country of origin," the Commission said in a statement.

"The Commission's view is that tags reading "Fabrique en Nouvelle-Zelande" (which translates as "made in New Zealand") were likely to have led consumers to think that the garments were manufactured in New Zealand when in fact they were manufactured in China or Bangladesh."

WORLD has now promised to stop attaching the tags to imported garments and will implement compliance procedures to ensure any claims it makes about the origin of its products are accurate.

It will also refund customers who bought the t-shirts thinking they were made in New Zealand.

Commissioner Anna Rawlings said it was important New Zealand companies were clear when they chose to manufacture products overseas.

"New Zealand-made products can sometimes attract a price premium when compared with similar products made overseas and their purchase can represent an important ethical choice for some consumers," she said.

"The truthfulness of information about country of origin is particularly important because consumers cannot check the accuracy of this kind of labelling for themselves."

WORLD estimates that since 2009 it has offered more than 1100 garments for sale which were manufactured overseas but had the "Fabrique en Nouvelle-Zelande" tag.

In that same period, 99 percent of the clothing it sold was made in New Zealand.