Thermomix Australia being sued by former seller
THE $2089 Thermomix calls itself "the most advanced appliance on the market" and has thousands of zealous fans, but the cult kitchen brand is at the centre of a bitter, emotional legal battle with a "traumatised" former contractor.
The high tech food processor is supposed to make life easier, yet in the past two years the company has been accused of causing third degree burns, encouraging a toxic bullying culture and failing to be honest with its customers.
Now former contractor Elisabeth Higgins, 56, from Perth, is suing Thermomix Australia in the District Court of WA. She claims Thermomix took away her business and failed to compensate her, and wants them to pay her lost earnings of $85,230.40, as well as additional compensation, interest and legal costs.
You cannot buy a Thermomix in a shop or online. The direct selling business operates like Tupperware or Avon, and the machines are sold by 'consultants', who work on commission, during in-home demonstrations.
The consultants operate in an allocated geographical area and are managed by group leaders, who earn commission on the sales of their consultants.
Consultants are not technically employees of Thermomix, but rather independent contractors who manage their own businesses. The more consultants a group leader recruits, trains and manages in their area, the more their own business grows and therefore their income.
Ms Higgins became a Thermomix consultant in February 2007 and Thermomix terminated her contract in April 2014.
During that time, Ms Higgins progressed to a group leader and "sourced, recruited, trained and managed" up to 20 consultants. She was making about $60,000 annually from this business.
In court documents seen by news.com.au, Ms Higgins claims Thermomix "transferred" some of these consultants away from her area, with "no offer of compensation ... for the loss of income that would result".
She also says the company reduced the size of the geographical area" in which she operated. In April 2014, Thermomix terminated Ms Higgins' employment contract.
Ms Higgins claims these three acts were in breach of Australian Consumer Law. Her case, which goes to trial in May, hinges on proving Thermomix broke this law.
"The Plaintiff has suffered damages representing lost income of $85,230.40 and lost opportunity to recruit consultants," the court documents state.
"As a result of the termination ... the Plaintiff has lost her business with subsequence loss of income and opportunity to sell the business."
"As a result of the matters ... [Ms Higgins] claims damages and compensation to be assessed".
When contacted about the case, a Thermomix spokeswoman told news.com.au "The proceeding has been defended and as it is a matter before the District Court of Western Australia it is not appropriate to comment further."
News.com.au understands Ms Higgins's lawsuit is the "test case" for a group of former Thermomix consultants who are also pursuing legal action against the company.
There are five other women - two in WA, one in Victoria, one in South Australia and one in NSW. All claim they have had similar experiences to Ms Higgins and say they are "traumatised" by the experience.
"I worked so hard for years, and was very successful for the company, but when I was 'discarded' I felt so used and it devastated me," one woman told news.com.au, on the condition of anonymity. "It broke my heart. After I left Thermomix I was ill for a long time," she said.
Another woman, who also spoke anonymously, said: "We all worked exceptionally hard with long unpaid hours to build the Thermomix business, then had this ripped away. We were devastated and could not believe that this was right, let alone legal."
She continued: "We pursued legal action after we realised just how badly we were being treated. We all worked so hard as contractors, to build up the Thermomix business in various areas, only to have them take it from us and often with little or no warning, or even a discussion.
"In most cases the businesses grew after a lot of work, extensive hours and travel - only to have them divided up and handed to new managers, along with some of our team. Areas were just carved up, or just handed over to another contracted manager, with no compensation."
This lawsuit is the latest in a series of negative headlines for Thermomix.
Last year, consumer group Choice provided a mass incident report to the ACCC after receiving 83 complaints from people about the TM31 model.
There were reports the machine would burst open while turned on, causing hot liquid to splatter everywhere.
Choice says 45 people were injured, 18 required treatment from nurses or doctors and eight were hospitalised. One victim was treated in a specialist burns unit for three weeks.
At the time, a Thermomix spokeswoman told news.com.au the safety of Thermomix customers is always "our highest priority".
"We have always fully co-operated with the relevant authorities and will continue to do so," she said.
In May, former Thermomix consultants told news.com.au about the company's "nasty" profit-obsessed culture that puts making money over the happiness and livelihood of its employees.
"They're nasty, those bitches," one woman said. "You don't want to play dice with Thermomix."
In 2014, Thermomix customers complained to the ACC after alleging the company secretly launched its new TM5 machine without warning. Customers who had just bought the old model were upset they weren't told a brand new version, sold for the exact same price, was about to be made available.
That same year, Choice gave the Thermomix a Shonky Award, a gong given to companies peddling "sneaky, slippery, unscrupulous and sometimes unsafe" goods and services.
So why all this fuss over a blender? Because the food processor market in Australia is worth $55.8 million, according to Euromonitor International. In 2016, there were 318,900 food processors sold in Australia.
Thermomix used to be the market leader and grew 8.5 per cent in volume terms over 2014-2015, aided by the popularity of cooking shows like MasterChef and My Kitchen Rules.
Now it sits in second place, controlling 17.4 per cent of the market, just below the Nutri Ninja which owns 18.3 per cent.
Thermomix made a gross profit of $39.4 million in 2014-15 on sales of $155 million, according to an annual financial statement obtained by News Corp.