Australia: Who moved my cheese? Recent changes to food labelling and advertising law

Last Updated: 19 March 2013
Article by Geraldine Farrell and Phoebe Connell

Significant changes to the law governing nutrition content, health and related claims on food labels and advertisements came into effect earlier this year.

The new Standard (Standard 1.2.7 - Nutrition, Health and Related Claims of the Australia New Zealand Food Standards Code (Food Code)) has been introduced to increase transparency and accountability relating to food products and the way in which they are labelled and advertised. The Standard greatly expands the range of permitted health claims, provides clarity on nutrition content claims and aims to reduce the risk of misleading and deceptive conduct claims about food. The introduction of the Standard is welcome relief for consumer interest groups concerned about misleading food labels, particularly relating to nutritional, health and related claims.

1. Timing for compliance

Businesses operating in Australia and New Zealand will have three years to meet the requirements of the new Standard. During the transitional period, businesses can rely on the new Standard or the old (but still current) Standard 1.1A.2, but not both. At the end of the three year period (18 January 2016), Standard 1.1A.2 will cease to operate. Given that all health claims except for one (relating to folate intake by women around the time of conception) are unregulated under Standard 1.1A.2, businesses may take advantage of the new Standard sooner rather than later as it gives them more scope to legally promote health-related aspects of their products.

2. What are nutrition content, health and related claims?

All of these claims are voluntary statements made by businesses to essentially promote their products for sale.

Nutrition content claims are claims about the nutrient or other substance content of a food. This includes claims such as 'low in cholesterol', 'lactose free', 'unsweetened' and 'a good source of calcium'.

Health claims (general and high level) are those claims which refer to a nutrient, ingredient or substance within the product and its subsequent effect and relationship on the function of the body. Claims such as 'calcium is good for bones and teeth' or 'folate contributes to maternal tissue growth during pregnancy' are examples of health claims.

3. Expansion of permitted health claims

Health claims include two sub-groups: general level health claims and high level health claims.

General level health claims relate to the effect a nutrient, ingredient or substance within the product has on general health.

Under the new Standard, over 200 pre-approved general health claims can be made by businesses as long as they meet the requirements set out in Schedule 3 of the new Standard. For example, it is now permissible to make a general health claim that 'fluoride contributes to the maintenance of tooth mineralisation', as long as the product contains no less than 0.6 mg fluoride per L.

High level health claims relate to the relationship a nutrient, ingredient or substance within the product has to a serious disease or to a biomarker of a serious disease.

Under the new Standard, there are 13 permitted high level health claims (listed in Schedule 2 of the Standard). Examples include 'calcium reduces the risk of osteoporosis in persons 65 years and over' and 'increased intake of fruit and vegetables reduces the risk of coronary heart disease'.

Once the new Standard comes into effect, the only health claims permitted to be used by businesses are:

  • those pre-approved by FSANZ (and included in the Standard); or
  • general level health claims that meet the self-substantiated relationship criteria set out in the Standard.

Nutrient profile scoring criterion (NPSC)

A food product must meet the requirements of the NPSC as set out in Schedule 4 of the Standard before health claims can be made on its label or packaging. The assessment must be made based on the food in the form in which it is to be consumed (taking into account any directions for preparation and consumption). This scoring system is primarily focused on ensuring that businesses do not make false or misleading claims on products that are high in saturated fats, sugar or contain excessive salt.

There are some concerns that the NPSC unfairly discriminates against food products containing "good" fats (such as yoghurts and nuts) whist allowing some "unhealthy" food products to make health claims based on the fact that they have a high fruit or vegetable content. One example of an unhealthy product that meets the NPSC is hot chips!

To assist businesses with determining their food products' nutrient profiling score, FSANZ has an accessible online nutrient profiling score calculator available. However, in the event that a product does not meet the NPSC, a business will have to understand how the NPSC works in detail to properly assess re-formulation options.

Dietary context statement

All health claims must include a general dietary context statement that the health effect must be considered in the context of a healthy diet involving the consumption of a variety of foods, as well as any prescribed dietary context statements. There are some limited exceptions for what needs to be included on the label if the product is contained in a very small package.

Self-Substantiation – general level health claims only

The FSANZ systematic review for self-substantiation process can be utilised by businesses wishing to include new (non-approved) general level health claims on their food product label or packaging. It is important to note that the food product in question must first meet the NPSC.

The process requires a food manufacturer to complete a detailed systematic review to establish and substantiate the food-health relationship in question. Detailed, high quality evidence of multiple scientific studies and human clinical trials is essential. The applicant is required to show to FSANZ that the studies as a whole demonstrate a causal connection between the food and the health effect. Strict notification requirements allow FSANZ to publish all information provided about the claim (and who is seeking to have it included).

If FSANZ approves the claim, it is then available for use by competitors, provided those competitors can substantiate that use of the new health claim is warranted on their own products.

It will be interesting to see how this system is enforced given that there is no prescribed offence for lack of substantiation in the Food Code. The Australian Competition and Consumer Commission (ACCC) substantiation notice procedure should, of course, be utilised to ensure compliance.

Fat free claims – no changes

No additional regulatory provisions for 'fat-free' and '% fat-free' claims have been included in the new Standard, despite concerns raised by public health stakeholders, consumers and some jurisdictions about the potential for consumers to be misled by these types of claims. The decision to maintain the status quo was influenced by the fact that confectionary manufacturers have voluntary agreed to remove 'fat-free' and '% fat-free' claims from high sugar, high energy confectionary products that do not normally contain significant levels of fat (i.e. over 80 per cent of the confectionary market), in early 2014.

4. Changes to nutrition content claims

Before making nutrition content claims, businesses must ensure that their product meets the requirements set out in Schedule 1 of the Standard. For example, a business can only claim that its food product is 'low in cholesterol' if the food contains no more cholesterol that a) 10 mg per 100 mL for liquid food or b) 20 mg per 100 g for solid food.

In addition, nutrition content claims must not directly or indirectly refer to slimming effects.

New guidelines for comparative nutrition content claims

A comparative claim means a nutrition content claim that directly or indirectly compares the nutrition content of one food or brand of food with another. Comparative claims are most common when the nutrition content of one food is advertised as being 'light or lite', 'increased' or 'reduced' in comparison with the nutrition content of another food (generally of a competitors).

Under the new Standard, businesses making comparative claims must include together with the claim:

  • the identity of the reference food; and
  • the difference between the amount of the property of food in the claimed food and the reference food.

A nutrition content claim using the descriptor 'diet' is a comparative claim if it meets the conditions for making that claim by having at least 40% less energy than the same quantity of reference (non-diet) food.

5. Requirements when including nutrition or health related endorsements on food label or packaging

Nutrition or health related endorsements include claims such as 'certified sustainable seafood' and often involve the use of logos, symbols and certifications (i.e. the Heart Foundation tick). Endorsements are becoming popular in the food sector as consumers become more sceptical and suspicious about the credibility of health claims.

Under the new Standard, a supplier of food may make or include an endorsement on a label or in an advertisement for food (or otherwise use the endorsement) if the requirements of Division 3 of the Standard are met. An endorsing body is defined as a not-for-profit entity which has a nutrition or health-related purpose or function that permits a supplier to make an endorsement. The endorsing body must:

  1. not be related to; and
  2. be independent of; and
  3. be free from influence by;

supplier of food in relation to which an endorsement is made.

An endorsement must also not refer to a serious disease except in a reference to the endorsing body if the serious disease is part of the name of the endorsing body.

6. Reminder - therapeutic claims are not permitted

It is important to remember that therapeutic claims are not permitted on food products in Australia. If a business seeks to make such claims (i.e. that a food can prevent, diagnose, cure or alleviate a disease, condition, ailment, defect or injury), then the product may instead be considered a therapeutic good, the manufacture and sale of which must comply with the Therapeutic Goods Act and associated Regulations. Examples of therapeutic claims include statements such as "prevents osteoporosis" or "reduces heart pain". Ambiguous statements implying a therapeutic effect should also be avoided. For example, a claim such as "eases digestive discomfort" is a borderline therapeutic claim and should be re-worded as "good for digestive health" to make it a clear health claim.

For further advice on the food / medicine interface please contact us.

7. What you should do now

Any businesses involved in the supply and sale of food products should ensure their food products meet the NPSC (and therefore are eligible to make health claims under the new Standard). To ensure a steady transition towards exclusively being regulated by the new Standard in three years time, it is important that businesses put re-structuring processes in place now (particularly if re-formulation is required or alternate marketing channels need to be considered).

We recommend you seek legal advice to ensure that all the new requirements involving labelling, advertising and correct product representations are satisfied in accordance with the new Standard and the Australian Consumer Law.

8. How Griffith Hack can help

As one of Australia's largest and oldest IP law firms, Griffith Hack works with many clients in the food industry to manage the life cycle of food products – we work with clients from the concept of a product, through the product development stage and full-scale commercial manufacture of a food product. When it comes to branding and advertising of a food product, in addition to assisting our clients to obtain and maintain trade mark protection, we also work with food companies to provide food labelling advice, branding and advertising advice. Our lawyers and trade mark attorneys are experienced in helping our clients to maximise a brand's impact, and to ensure that the marketing and advertising of products comply with all relevant laws, including the Australian Consumer Law and the FSANZ Code. With the recent introduction of IP valuation services, we are also able to assist our clients to value their brand.

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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