The ACCC is appealing a Federal Court ruling that Kimberly-Clark's Kleenex wipes are suitable to be flushed down the toilet, arguing that the risk of harm to sewerage systems was overlooked.
The court found in June that Kimberly-Clark's "flushable" claims were not false or misleading, a decision that dismayed consumer groups and water utility firms who say wipes contribute to sewage blockages, environmental harm and high plumbing bills.
In her decision, Justice Jacqueline Gleeson said she was not persuaded the ACCC's evidence was sufficient to support a conclusion that the wipes were unsuitable for flushing, as the actual complaints were insignificant given the number of sales.
The Australian Competition and Consumer Commission said on Monday that Justice Gleeson was wrong to rule evidence of actual harm was required, when risk of harm from the product was apparent.
"The ACCC will also argue that the Court made an error by rejecting the ACCC's case that Kimberly-Clark had claimed the Kleenex wipes would break up quickly like toilet paper when flushed," chairman Rod Sims said.
"The ACCC is aware of problems continuing to be reported by Australian water authorities as a result of non-suitable products, such as wet wipes, being flushed down the toilet and contributing to blockages and other operational issues."
The full Federal Court will hear the appeal at a later date.
Kimberly-Clark has been contacted for comment.
Water Services Association of Australia applauded the ACCC's decision to appeal, and flagged that a new labelling standard for flushable products will be finalised by the end of 2019.
The association's executive director Adam Lovell said the standard will include pass/fail criteria and is being developed by manufacturers, water utilities, peak bodies and consumer groups.
"It's not just an issue here in Australia but internationally," Mr Lovell said.
"UK water utilities say it costs PS100 million annually to clear blockages contributed to mainly by wet wipes."
The ACCC originally claimed Kimberly-Clark made false or misleading representations between May 2013 and May 2016 about the suitability of its Kleenex Cottonelle Flushable Cleansing Cloths wipes being flushed down the toilet.
