A Queensland bedding company has been penalised by the national competition watchdog, the Australian Competition and Consumer Commission (ACCC), for false labelling in relation to the woolmark logo.

It was alleged that Gold Coast Wool, a small Southport factory, targeted foreign tourists who where willing to pay a premium price for products that they believed were made of 100 per cent Australian wool.

ACCC chairman Rod Sims said the company was found to undermine consumer confidence after analytical testing of its bedding products line showed items contained a blend of polyester and wool.

The products in question were wool doonas and underlays sold with the Woolmark logo.

Gold Coast Wool paid an infringement notice penalty of $6600 to the ACCC for falsely claiming that its bedding products were composed of 100 per cent wool.

The company's web site still promotes the Woolmark logo as pure new wool filling.

"This matter highlights the need for businesses, no matter how small, to be careful when promoting a product and to ensure labelling does not represent a product that it is not," Mr Sims said.