Australia: New Country of Origin food labelling laws: will they bring clarity or continued confusion?

Last Updated: 22 August 2016
Article by Hayley Upton
Services: Competition & Consumer Law, Corporate & Commercial, Insurance, Intellectual Property & Technology
Industry Focus: Agribusiness, Insurance

What you need to know

  • The Country of Origin Food Labelling Information Standard 2016 was introduced on 1 July, establishing a new regime governing the labelling of food products supplied to Australian consumers.
  • The new Standard requires the application of multi-component labels on food products, aiming to provide Australian consumers with clearer information about whether a product was made, produced, grown or packed in Australia.
  • Although the new Standard will not become mandatory until 1 July 2018, Australian food producers should use the transition period wisely and start assessing the changes they may need to make to product packaging or marketing materials.

A shorter version of this article was published in The Land - Business.

For years, 'Made in Australia' and similar labels on food products have been a source of confusion, with consumers often left wondering whether a product is completely, partially or just minimally 'Australian'.

With the Country of Origin Food Labelling Information Standard 2016 (Standard) coming into force on 1 July, the regulatory regime for Country of Origin (COO) food labelling has just entered a new era. The Standard establishes a new framework requiring businesses to apply more comprehensive labels that give consumers clearer information about the food products they purchase.

Compliance with the new law will not become mandatory until 1 July 2018. However, the two-year transition period should not be wasted. Rolling out the new COO labels will come at a cost and some businesses may need to consider significant redesigns – or even complete rebranding – of certain packaging to ensure compliance when the time comes.

For businesses that supply food products to Australian consumers, now is the time to get across the changes and work towards compliance.

Rationale for the new food labelling law

Currently, COO labelling in Australia is regulated by the Food Standards Australia and New Zealand Code (Code). The Code requires most packaged food sold in Australia to bear a COO statement on the label. The Code also requires some unpackaged foods sold in Australia to include a COO statement either on the food itself (for example, a sticker on a piece of fruit) or alongside the display of the food (for example, on a sign). The labelling regime applies to both domestic and imported food sold in Australia. However, there is currently no requirement for a label to clarify just how much of a product is actually made in Australia, as opposed to being made elsewhere and then imported into Australia.

This regime has caused long-standing confusion among Australian consumers. The inadequacy of COO labelling laws became headline news in 2015, following an Australia-wide recall of frozen mixed berries allegedly linked to an outbreak of hepatitis A. The berries were imported from Chile and China, but their packaging featured claims 'Made in Australia' and 'Made in Australia from Local and Imported Ingredients'. While the recall was driven by food safety concerns and would have occurred even if labelling had been clearer, the public response to the recall demonstrated two things. First, it showed that consumers' perceptions of food safety are linked to COO claims. Second, it sent a clear message that Australian consumers were dissatisfied with the existing COO labelling regime.

The new Standard aims to overcome these concerns and provide Australian consumers with clearer, consistent and more informative labels regarding the extent to which a product was made, produced, grown or packed in Australia.

Scope of the new food labelling regime

The Standard will apply to:

all food offered for retail sale in Australia (eg. in-store, online or from a vending machine) packaged wholesale foods various unpackaged foods such as fish, certain meats, fruit or vegetables, nuts, spices, herbs, fungi, legumes and seeds. The Standard will not apply to:

  • unpackaged food such as cheese, bread, pastries or sandwiches
  • food only intended for sale overseas
  • food sold by restaurants, schools, canteens, caterers, prisons, hospitals, medical institutions or at fund raising events such as fetes
  • food that is made and packaged at the same premises such as bread in a bakery
  • home delivery foods such as pizza
  • food that is intended for the dietary management of a disease, disorder or medical condition
  • pet food.

Even if a food product is not strictly caught by the Standard, a business may voluntarily feature a COO label on that product, provided the claim is not false or misleading and complies with the requirements governing the use of the relevant logo(s).

Non-priority versus priority foods

The Standard further divides food products into two categories – priority foods and non-priority foods. Different labelling requirements apply depending which category the food product falls under. The rule of thumb under the Standard is that food will be a priority item unless it belongs to any of the following non-priority food categories:

  • seasonings
  • confectionery
  • biscuits and snack foods
  • soft drinks, sports drinks and alcoholic drinks
  • tea and coffee
  • bottled water.

New range of food labels

Priority food labelling

The Standard requires one of three types of labels to be applied, depending on the particular food product.

A three-component standard label will be required on products that were grown, produced or made in Australia. The three components that make up this label are the 'made in Australia' kangaroo logo, a bar chart and explanatory text.

A two-component standard label will be required for two types of products. The first is products that were packed in Australia only (not grown, produced or made) regardless of the percentage of Australian ingredients. The second is imported products with Australian ingredients that voluntarily use a standard mark. The two components that make up this label are the bar chart and explanatory text. The bar chart indicates by a percentage amount the minimum proportion (by ingoing weight) of Australian ingredients within a food or drink product, regardless of the country of origin of the food product. The bar chart and explanatory text will vary depending upon the percentage of Australian ingredients determined by weight in the product.

A 'country of origin statement' label stating the origin of the product will be applicable when a business does not need or cannot use a standard mark label (for example, a label which simply states 'Product of Vietnam').

Non-priority food labelling

Non-priority foods must display a statement that identifies the country of origin and whether the food was grown, produced or made in that country. Alternatively, if a three-component standard label could be appropriately applied to a product, the business may choose that option. For example, a label for coffee beans grown, roasted and packaged in Australia can either display a label saying 'Product of Australia' or use the three-component standard label described above.

Understanding the key terms

Distinguishing between the key terms – grown in, made in, produced in or packed in – is critical to ensuring the correct label is applied and COO claims are accurate.

The following table provides a brief overview of the key terms1 and the labels required in each case.

Formatting and legibility details

Whichever label is applicable to a food product, there are formatting and legibility requirements which must be considered. The Standard is flexible when it comes to aesthetics so long as words are in English, legible and prominent against the background of the label. The Style Guide produced by the Department of Industry, Innovation and Science offers further guidance on how these criteria can be satisfied.2

Trade mark and branding considerations

In addition to specifying the type and form of COO label that must be applied to particular food products, the Standard also protects the use of the 'Australian Made Australian Grown' logo and the bar chart logo, applied as labelling on food or drinks sold in Australia.

This means that businesses' marketing and branding teams should reconsider seeking trade mark protection for any logos that are too similar to one or the other of these protected marks.

How will the new labelling laws be enforced?

Consumer protection lies at the heart of the new food labelling regime, with the Standard having been enacted under section 134 of the Australian Consumer Law.

The Australian Competition and Consumer Commission will be responsible for taking action against businesses that do not comply with the Standard when it becomes mandatory on 1 July 2018. In the meantime, businesses must continue to comply with the existing Code unless they voluntarily adopt the Standard earlier.

Key takeaways

It remains to be seen how 'user friendly' the new COO labels will be once they become mandatory in two years' time. Ultimately, consumers will be the ones to decide whether or not the labels effectively provide quick and easy access to the information they need to make more informed decisions about the food they purchase.

For businesses, two years may seem like a long time to transition from the old to the new labelling regime, but that time should be used wisely. Initiatives to develop new packaging or branding for food products can take many months to move from start to finish. Businesses that supply food to Australian consumers should start thinking now about the impending changes, and put appropriate plans in the pipeline to ensure they are ready to roll out the new labels when the time comes.

Footnotes

1 Detailed descriptions of these terms, as well as examples of the types of labels that would apply in each case, are available in the Country of Origin Food Labelling Guide accessible on the ACCC's website at http://www.accc.gov.au/publications/country-of-origin-food-labelling. The Department of Industry, Innovation and Science has also released a Style Guide to help businesses understand what labels should be applied to particular products, accessible at https://www.business.gov.au/info/run/goods-and-services/selling-goods-and-services/selling-goods/country-of-origin-food-labelling.

2 Accessible at https://www.business.gov.au/info/run/goods-and-services/selling-goods-and-services/selling-goods/country-of-origin-food-labelling.

This article is intended to provide commentary and general information. It should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this article. Authors listed may not be admitted in all states and territories

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Authors
Hayley Upton
 
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