The Commerce Commission has begun an investigation into the clothing brand World after complaints it mislabelled T-shirts as being made in New Zealand.
The company has come under fire after The Spinoff reported it attached swing tags to some clothing items - including T-shirts, sweatshirts and sweatpants - that were actually made in Bangladesh, by the brand AS Colour.
The company said the clothing has the country of origin clearly labelled on the collar and seam.
However, the Commerce Commission has received nine complaints about the tag's accuracy and it has opened an investigation.
Under the Fair Trading Act it is illegal to make false or misleading claims about the country of origin.
It has also prompted a reminder that claims need to be able to be substantiated.
"Any labelling must be clear and truthful," Commissioner Anna Rawlings said.
"Some consumers are happy to pay a higher price for goods which they believe are made in New Zealand, and for some this represents an important ethical decision.
"Country of origin claims are also important for local manufacturers that want to protect the value placed on a genuinely New Zealand made product."
In May 2017, a health supplement company was fined more than $500,000 after it said its bee pollen was locally made when it was sourced from China.
Almost a dozen companies and 11 people have been fined more than $1.5 million since 2011 for selling imported alpaca rugs falsely claimed to be made in New Zealand.