A wholesaler has been penalised $2.3 million for claiming products manufactured in Indonesia were hand-painted by Indigenous Australians.
A wholesaler that pretended thousands of didgeridoos and boomerangs were hand-painted by Australian Aboriginal people when they were instead made overseas has been fined $2.3 million for deceptive conduct.
The Australian Competition and Consumer Commission had been seeking penalties in the Federal Court after Birubi Art Pty Ltd was found in October to have breached Australian consumer law between July 2015 and November 2017.
It ceased trading soon after.
The wholesaler sold five product lines to retailers featuring images, symbols and styles of Australian Aboriginal art, being loose and boxed boomerangs, didgeridoos, bullroarers - a musical instrument - and message stones.
It was found to have made false or misleading representations that they were of a particular style or had a particular history, and further misrepresentations about their place of origin.
These were designed to enhance the cultural value and attractiveness of the objects, Justice Melissa Perry said in Sydney on Wednesday.
About 50,000 Birubi Art items were sold to retailers for a total of $324,210.
Two of the five products were produced without the involvement of an Indigenous artist.
"Birubi represented that each of the products were hand-painted by Australian Aboriginal persons and that they were made in Australia when in fact neither was true," Justice Perry said.
"The products were manufactured in Indonesia."
Particular words were given prominence on the products including "HAND MADE" and "Authentic Aboriginal art".
The judge ordered $2.3 million be paid to the Commonwealth of Australia for the "substantial and systemic" wrongdoing.
But she further ordered the ACCC was not to take steps against Birubi Art to enforce the monetary penalty or to have its legal costs paid without further leave of the court, to reflect the fact the wholesaler was in liquidation.
The ACCC had pressed its claim for penalties to be awarded "only to serve the purposes of general deterrence", Justice Perry said.
The consumer watchdog had submitted Birubi's contraventions were liable to cause offence and cultural harm.
"Such conduct puts at risk an array of economic and social benefits which are vital to Indigenous communities, particularly those in remote areas," the ACCC penalty submission says.
"A strong deterrent message is therefore important to ensure that other would-be contraveners are not tempted to prioritise their own short-term profits over the risk of such harms."
Justice Perry said the Indigenous arts and souvenirs sector generated revenue of $300 million to $500 million each year.