Australia: "Product of Australia" and "Olive Oil" – the Latest Label Claims Attracting ACCC Focus

Last Updated: 24 October 2012
Article by Laura Hartley

On 11 October 2012, the Chairman of the Australian Competition and Consumer Commission (ACCC) announced the release of two new consumer guides:

  • The Good Oil: A guide to buying the right olive oil for you (Olive Oil Labelling Guide), and
  • Where does your food come from? As a consumer, if you want to buy food from a certain country, this fact sheet tells you what to look for on the label (Food Origin Labelling Guide).

The release of these two consumer guides follows shortly after the introduction of the Competition and Consumer Amendment (Australian Food Labelling) Bill 2012 (Food Labelling Bill) by the Australian Greens.

Product labelling, particularly in relation to food, is a political issue and one the ACCC is very interested in too. The Olive Oil Labelling Guide has been produced as a guide for consumers but shows that companies in the olive oil industry would be forgiven for being slightly confused as to what is required of them for olive oil labelling. The Food Origin Labelling Guide has also been produced as a guide for consumers but those fast moving consumer goods companies making "Product of Australia" claims can take comfort from the fact that the ACCC fully endorses the current legal tests for making "Product of Australia" claims as opposed to those proposed in the Food Labelling Bill. The Food Origin Labelling Guide is also a very simple and user friendly guide for industry to use too.

The Olive Oil Labelling Guide

The Olive Oil Labelling Guide provides the ACCC's view of the differences between different types of olive oil (i.e. "extra virgin olive oil", "extra light olive oil" or "pure olive oil") and therefore the support necessary to label olive oil products with these descriptors.

The release of the Olive Oil Labelling Guide follows various investigation and enforcement actions by the ACCC against olive oil suppliers:

  • In May 2012, the ACCC issued infringement notices totalling $13,200 against The Big Olive Company Pty Ltd for labelling products as "extra virgin olive oil" that the ACCC considered were not.
  • In 2009, the ACCC accepted court enforceable undertakings from Calcorp (Australia) Pty Ltd, Basfoods (Aust) Pty Ltd, and IGA Distribution Pty Ltd because testing revealed their products were not "extra virgin olive oil".

The ACCC explicitly states in the Olive Oil Labelling Guide that olive oil products must comply with named but currently voluntary olive oil standards. While there could be arguments raised over how reasonable consumers understand the phrases "extra virgin olive oil", "extra light olive oil" or "pure olive oil", the ACCC has clearly taken the view that it needs to educate consumers about the meaning of these phrases and by these means, to bring industry into line.

There are however numerous differences between the two standards referred to in the Olive Oil Labelling Guide. Unfortunately, the ACCC did not take the opportunity to specify whether olive oil suppliers should comply with the Australian Standard for Olive Oils and Olive Pomance Oils (AS5264-2011) or International Olive Council's Trade Standard for Olive Oil. Instead, the ACCC stated that consumers should look for products that comply with one "and/or" the other. Given the significant cost of testing for those in the industry, this lack of clarity is less than ideal. As a result though, olive oil suppliers need to determine which voluntary standard they will comply with, adopt a testing methodology to ensure their products do comply with that standard and then label their products with certification against that standard.

Food Origin Labelling Guide and the Food Labelling Bill

The Food Origin Labelling Guide clarifies and explains the difference between commonly used terms in food labelling including "Grown in", "Product of", "Made in" or "Australian Owned". It is a simple and easy to use Guide for industry as well as the consumer and can be accessed at the ACCC's website:

The release of the Food Origin Labelling Guide follows a recent spate of place of origin claims enforcement action by the ACCC and the recent introduction of the Food Labelling Bill.

Recent enforcement action regarding place of origin claims by the ACCC includes:

  • In October 2012, the ACCC obtained a Federal Court order requiring UNJ Millenium Pty Ltd to pay a penalty of $55,000 after it admitted it made false or misleading claims that sheepskin and wool bedding products were made in Australia.
  • In February 2012, the ACCC obtained a Federal Court order that Hooker Meats Pty Ltd pay a penalty of $50,000 for falsely claiming that the meat it offered was sourced from King Island.
  • In March 2012, the ACCC issued an infringement notice totalling $6,600 against Double D eucalyptus oil for falsely labelling imported oil as made in Australia.

The Food Labelling Bill, currently before the Australian Senate, proposes to cease the treatment of food as just any other good. The Food Labelling Bill seeks to create a single regulatory regime, retaining mandatory labelling requirements but supersede country of origin labelling from the Food Standards Australia New Zealand Act 1995.1

Specifically the Food Labelling Bill proposes to remove the ability to make the stand-alone claim "Made in Australia" about food. Instead the Food Labelling Bill proposes that processed food comprising 90 per cent or more Australian ingredients by total weight excluding water be labelled "Made of Australian ingredients". Meanwhile, current labelling requirements for "Grown in Australia" claims are proposed to remain in place.2

It appears that the ACCC's Food Origin Labelling Guide, at least in part, is the ACCC's response to the Food Labelling Bill.

The ACCC Chairman has publicly stated that he does not consider that there is an essential problem with the current classification regime. The ACCC Chairman considers that "[t]here is nothing wrong with having a classification of 'Made in Australia' which requires at least 50 per cent of the cost to produce the product being incurred in Australia".3 Rather the ACCC considers that the problem is people's understanding of what these claims mean. The ACCC has therefore issued the Food Origin Labelling Guide as an educative tool.

Product labelling continues to be a hot topic for FMCG companies. A vigilant ACCC and a determined political party in the Australian Greens mean industry needs to keep well on top of the changes happening and lessons being learnt in the space.

The assistance of Fadi Metanios, Solicitor, of Addisons in the preparation of this article is noted and greatly appreciated.


The assistance of Fadi Metanios, Solicitor, of Addisons in the preparation of this article is noted and greatly appreciated.

1 Explanatory memorandum to the Competition and Consumer Amendment (Australian Food Labelling) Bill 2012, at 2.

2 Ibid.

3 Sims, R, Competition and consumer issues: State of play in the food and grocery sector, Speech given at the Australian Food & Grocery Leaders Forum, 11 October 2012, Canberra, at 7.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Laura Hartley
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