Cosmetics Industry Mislead and Deceived: Ross Macdougald, Ingredient manufacturer Plant Extracts and skin care brand Biologi ordered to publish corrective notices.

Self-proclaimed cosmetic chemist Mr Ross Macdougald and two of his controlled companies, Plant Extracts Pty Ltd (ingredient manufacturer) and Biologi Pty Ltd (retail brand), have admitted to engaging in misleading and deceptive conduct and making misleading representations about their products in recent Federal Court proceedings.  

In expedited orders made on 19 October 2023 and an initial judgement published on 23 October 2023, the Federal Court ordered that Macdougald was knowingly concerned with Plant Extracts and Biologi’s conduct that breached the Australian Consumer Law and misled customers and potential customers.  The Court also ordered that each of Plant Extracts and Biologi be permanently restrained from engaging in the conduct that is the subject of eight separate corrective notices since 2016.

In making the corrective advertising orders on 23 October 2023, Justice Downes said, “As third parties (namely existing and potential customers) were likely being misled by the impugned conduct, I made this order at the conclusion of the trial rather than waiting for the final judgment to be handed down. I was particularly concerned that the injunctions be issued and that the corrective advertising occurs as soon as possible”.

Plant Extracts, incorporated in 2016, manufactures botanical extracts as ingredients for other cosmetic brands, including Biologi. Biologi, incorporated and Founded by Ross Macdougald in 2017, is a consumer skincare brand that sells several plant extracts (manufactured by Plant Extracts) as its serums directly to consumers, stockists, and through various distribution channels both in Australia and internationally. 

Incorporated in 2012, NATIVE EXTRACTS Pty Ltd is a leading Australian manufacturer and supplier of natural plant-based ingredients (botanical extracts) for the cosmetics, pharmaceutical, nutraceuticals, food and beverage industries. Carroll and Macdougald started NATIVE EXTRACTS Pty Ltd together in 2012, with Carroll purchasing Macdougald’s interest in April 2016.   Since then, Carroll and her team have significantly expanded their ingredient range, improved on the initial extraction methodology and introduced a range of nutrient-dense “essences” in what is believed to be an Australian first. 

During the trial, Macdougald and his controlled companies amended their defences. They admitted numerous allegations, including that Plant Extracts doctored several Southern Cross University (SCU) certificates of analysis that report the phyto compounds identified in a botanical extract that belonged to NATIVE EXTRACTS Pty Ltd.  They subsequently represented to customers and potential customers that these results were their own when, in fact, they had not commissioned SCU to do independent testing of these extracts at all.

Commenced on 10 July 2020, the proceedings involved allegations by NATIVE EXTRACTS Pty Ltd and its related parties that Ross Macdougald and his related companies (Plant Extracts Pty Ltd, Phytoverse Pty Ltd, FPI Oceania Pty Ltd and Biologi Pty Ltd) breached a contract of sale, breached the restraint of trade clause, breached his directors duties and obligations of confidence, infringed copyright, engaged in misleading and deceptive conduct and made various misleading statements in relation to Plant Extracts and Biologi’s products in breach of the Australian Consumer Law.

The Federal Court ordered that Ross Macdougald, Plant Extracts and Biologi publish eight corrective advertisements on each of their websites and their social media channels to correct the following:

• Since July 2016, Plant Extracts has modified various certificates of analysis produced by an independent testing facility, Southern Cross University Plant Sciences Laboratories and owned by NATIVE EXTRACTS Pty Ltd by removing the date, customer, customer reference number, laboratory reference number and job number and inserting its own, to represent that it had completed independent testing on its products when in fact it had not;
• Between July 2016 and May 2018, Plant Extracts represented that it was certified as organic, using an Organic Food Chain logo using another company’s Organic Certification number – when, in fact, it was not organically certified during this period;
• Between June 2018 and 2020, Plant Extracts represented in its product catalogues that the compound “Byangelicin” was present in its Finger Lime and Desert Lime extracts and that this compound “improves elastin production in the skin, is a potent anti-ageing active and reduces the potential of anti-ageing” in circumstances where Byangelicin is not a compound known to science, and does not exist.

• Between April and December 2018, Biologi used NATIVE EXTRACTS Pty Ltd’s Organic Food Chain logo on its website to represent to the public that it was a Certified Organic brand by OFC when, in fact, it was not.
• Since 2018, Biologi has represented that its BF Hydration Body Serum (made from Finger Lime Extract) contained Byangelicin that " reduced the appearance of ageing” when, in fact, Byangelicin does not exist.
• Since 2018, Biologi claimed that its BK Rejuvenating Eye Serum and BF Hydration Serums “contained Vitamin C or high levels of Vitamin C” when, in fact, they contained no detectible levels of Vitamin C at all.
• Since November 2017, Biologi represented that it was the first to develop a method to stabilise natural Vitamin C and that its products were the only skincare products in the world that contain natural Vitamin C. This was untrue as NATIVE EXTRACTS Pty Ltd developed this method as early as 2013 and publicly announced this breakthrough and a related company previously called Onoir Pty Ltd sold a single extract serum of Kakdu Plum that contained Vitamin C as early as 2015.  NATIVE EXTRACTS Pty Ltd has supplied various brands with extracts containing natural Vitamin C from as early as 2013. 
• Since April 2017, Biologi represented that its skin care products contained only one ingredient, did not contain any additives, and were not diluted when, in fact, these claims were untrue.

Lisa Carroll, Director of NATIVE EXTRACTS Pty Ltd, welcomed the Court's judgement and the orders made for corrective advertising as a significant step towards transparency and integrity for the cosmetics industry.

“The orders relating to misleading representations impact both the cosmetic ingredient supply chain and retail customers in Australia and internationally,” said Lisa Carroll. 

“The case shows how easily misleading representations by an ingredient wholesaler such as Plant Extracts and those made to Biologi’s retail consumers, distribution channels, stockists and influencers can be amplified and proliferate exponentially globally.”

“This is not limited to isolated misstatements made by an ingredient wholesaler and a retail brand, but the misstatements have proliferated across social media channels and within the industry often unknowingly, as they are repeated by stockists, distributors and other skincare brands that formulate with the affected ingredients.”

“It’s alarming to think that an unknown compound like Byangelicin can return over 1000 Google search results, when in fact Byangelicin does not exist, raising the question of how it could ever have been attributed to delivering skincare benefits as claimed by Biologi and Plant Extracts in the first place,” says Carroll.

Biologi's skin care products are available directly from its website and through various online retailers, including Adore Beauty, The Iconic, One Fine Secret, A-Beauty, OZ Hair and Beauty.

The Court’s final judgment (including an assessment of loss and damage) is pending.   The link to the entire decision of the Court and the Corrective Notices to be published by Ross Macdougald, Plant Extracts and Biologi, is available here: https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2023/2023fca1265 

“This is an important case for our industry and for those brands and manufacturers that stand by the integrity of the Australian Cosmetic industry.  NATIVE EXTRACTS Pty Ltd took a stand to protect its business and the brands and contract manufacturers we supply, to inform others that were being misled, and ultimately for the benefit of the consumer,” says Carroll.

 

About NATIVE EXTRACTS Pty Ltd :

NATIVE EXTRACTS Pty Ltd (NE) is a leading Australian phyto-tech company that specialises in delivering True to Nature phyto-compound profiles from unique, powerful botanical sources.

They are the pioneers in harnessing the natural Vitamin C molecule in an aqueous format with stability over 24 months, providing unprecedented concentration in a liquid. They offer an extensive hydrophilic Cellular Extract range and continue to expand their oil-soluble range of unique native seed oils and infusions. NE operates a conscious manufacturing facility that minimises energy, water, and waste for traceable, transparent, and True to Nature molecules for natural solutions.

Backed by rigorous standards of quality control and certified ISO9001:2015, Food Grade, and Organic Certified, NE is evolving as a unique Australian Phyto-tech company expanding their ingredient categories to include flavours and post-biotics. NE is the industry choice for ingredient commercialisation, custom projects, and continuous R&D across Cosmetics, Nutraceuticals, Pharmaceuticals, Food and beverage, and collaborations with highly regarded research institutions. Learn more at www.nativeextracts.com.