According to a news source, Estée Lauder has refused an offer from the Australia-based Wesfarmers Target retail chain to settle a lawsuit alleging that Target stocked its shelves with heavily discounted and fake Make-Up Art Cosmetics (MAC), a line manufactured by an Estée Lauder subsidiary. Target has reportedly removed the products from its shelves and offered to sever its ties with any products sold under the MAC trademarks, pay MAC its profits from a promotional sale in 2012, plus interest, and reimburse MAC for its legal fees. Estée Lauder, however, apparently wants the retailer to further admit that it sold counterfeit products and issue an apology.

Target reportedly purchased the products through the “grey market,” importing them cheaply from a wholesaler in the United States. While this practice is apparently legal, it left Australian department stores that have an exclusive sales agreement with the high-end cosmetics company no option for redress. But that was only until the products sold in Target stores were alleged to have been made with a different formula than genuine MAC products, and litigation was filed. Target traced the purportedly counterfeit products upstream through its importer to an Arizona supplier, run out of a suburban home by a sole director who has abruptly closed the business, and then to a Texas company, Mudd Puppy Cosmetics.

Target has sued that company in the United States to find where its sole owner obtained her MAC cosmetics. It, too, has apparently curtailed its Internet presence. Target is evidently hoping to rescue its reputation and regain consumer trust by proving the cosmetics were genuine. See Brisbane Times, April 22, 2013; The Age, May 6, 2013; UPI.com, MENAFN.com and BRW, June 18, 2013.