Australia: Jumping into the new country of origin food labelling requirements – is your packaging up to scratch?

Last Updated: 29 November 2017
Article by Georgina Hey and Rebecca Brenikov

Introduction

As previously updated, businesses have until 1 July 2018 to transition to a new system of country of origin labelling for food products in Australia. The incoming Country of Origin Food Labelling Information Standard 2016 (Standard) imposes stricter labelling requirements on "priority", as opposed to "non-priority", foods and is intended to help consumers better understand where their food comes from.

Uncertainty comes as part and parcel of any regulatory overhaul and it's too early to tell how some aspects of the new system will work in practice. In this update, we look at the different requirements in place for priority and non-priority foods, and the types of claims businesses can make on their packaging under the new regulations.

Key takeaways

  • Always bear in mind the overarching prohibition of conduct that is misleading or deceptive (or is likely to mislead or deceive), including when developing labelling to comply with the new system.
  • Non-priority foods (eg, lollies, ice cream, biscuits, ready to drink coffee, wine etc.) are subject to less onerous labelling requirements than priority foods (priority foods being everything but for non-priority foods). However, if a business wants to use the green & gold Kangaroo symbol in relation to a non-priority food, it must comply with the stricter rules that apply to priority foods.
  • If a priority food claims to have been "made in Australia", the specific nature of any minor overseas processing must also be declared on the label.
  • If your Australian ingredients are sent overseas for processing and re-imported into Australia, you may not be able to claim that your product is grown, produced or made in Australia.
  • If your business is in the process of updating its packaging to comply with the new Standard and has any questions, please get in touch with a member of our IP Team.

Priority versus non-priority foods

What labels do I need to use?

It is important to note that the Standard does not apply to all foods. For example, food sold for immediate consumption at a café or restaurant, or food sold on the premises where it has been produced, such as at a bakery. However, assuming that the Standard does apply, labelling obligations depend on whether the food is classified as a 1.) priority food or 2.) non-priority food.

Non-priority foods

Businesses should assume that their food products are priority foods unless they fall into one of the seven non-priority food categories set out in the Standard. The categories for non-priority foods are: 1.) seasoning, 2.) confectionary, 3.) biscuits and snack foods, 4.) soft drinks and sports drinks, 5.) tea and coffee, 6.) alcoholic beverages, and 7.) bottled water.

Make sure to check the Standard thoroughly before deciding your food is non-priority as some foods, like muesli bars, are defined as priority despite being commonly thought of as snack foods.

If your food is non-priority, you only need to include a text statement identifying the country of origin (eg, "Product of Australia" or "Made in Italy"). You can use the same labelling system as is required for priority foods if you want, but if you choose this option you have to comply with the Standard as if your product was a priority food. This could be an attractive option for businesses to standardise their approach across all products, particularly if the new Standard proves popular with consumers.

Priority foods

All priority foods are required to bear a "standard mark label", which may consist of up to three elements; (1) the Kangaroo symbol; (2) a bar chart indicating the proportion of Australian ingredients; and (3) explanatory text indicating the food's country of origin and the percentage of Australian ingredients. All standard mark labels must be contained within a clearly defined box.

The exact requirements of the label depend on the country of origin and whether the food was "grown", "produced", "made" or "packed" there. The below table sets out some rules of thumb and example labels.

Grown in, produced in, made in, packed in- what is the difference?

Claiming that a product is grown or produced in Australia

"Grown" and "produced" claims are likely to be very similar, however, the Standard advises that you should use a "produced" claim for products containing ingredients that aren't grown, such as sauces containing water or salt (neither of which can be "grown" according to the Standard).

The rules for claiming that a priority food was grown/produced in Australia are stricter than for other countries. To make a "grown/produced in Australia" claim, all ingredients must have been grown/produced in Australia. Furthermore, if there is more than one ingredient, all or virtually all of the processing must have occurred in Australia.

For other countries, a "grown" or "produced" claim can be made if each significant ingredient was grown or produced in that country and all or virtually all processing also occurred there. Whether an ingredient is significant depends on the nature/function of the food, not the proportion of the ingredient.

The less onerous "significant ingredient" test also applies to non-priority foods grown/produced in Australia but, as mentioned, if you wanted to use a standard mark label for a non-priority food you could only do so if all ingredients were Australian grown/produced.

Claiming that a product is made in Australia

The "made" claim is broader than the grown/produced claims. You can say your product is "made" in Australia or another country if it underwent its last substantial transformation there. A food undergoes a substantial transformation in a country if the food:

  • was grown or produced there; or
  • is, as a result of one of more processes in that country, fundamentally different in identity, nature or essential character from all of its ingredients or components that were imported into that country.

The "last substantial transformation" test is likely to prove confusing for a lot of businesses. Whilst unclear how the ACCC will apply the test you should be aware that:

  • the terms "identity", "nature" and "essential character" aren't defined in the Standard so, for the moment, you should think about their ordinary meaning.
  • the ACCC recommends that businesses consider each imported ingredient and then work out how the finished product differs from each one, rather than focusing too heavily on the manufacturing processes. Even if a process is complicated, it won't result in a substantial transformation if it only changes the food's appearance.
  • a list of processes that the ACCC believes will and won't result in substantial transformations is set out in the ACCC's recent Country of origin food labelling guide. For example, the ACCC says that juicing fresh fruit is a substantial transformation, but reconstituting fruit liquid concentrate is not. Fully baking a frozen, raw product would most likely also be a substantial transformation according to the ACCC, but not finishing off the baking of a partly-cooked product.

Claiming that a product is packed in Australia

If your food doesn't pass the "last substantial transformation test" but it is packed in Australia, you could make a "packed" claim. You will still need to declare the proportion of Australian ingredients in the products (including if there are no Australian ingredients), and you will not be able to use the kangaroo symbol. The below label is one such example.

What about Australian ingredients sent overseas for processing and re-imported into Australia?

Unless the overseas processing is very minor, making a "grown/produced/made in Australia" claim may contravene the Standard for goods processed overseas.

In the case of very minor processing, you would need to declare the specific nature of the processing on the packaging (see the below example).

Also bear in mind that if any foreign ingredients are added to the food during overseas processing you cannot claim the food is grown or produced in Australia, no matter how minor the processing.

If the processing amounts to a substantial transformation, you will need to declare that the product was made in that country. You can, however, add explanatory text and a bar chart to indicate the percentage of Australian ingredients.

Summary

The changes canvassed above are aimed at creating greater clarity for consumers, but they can be onerous for businesses to apply in practice. Businesses that do not comply with the Standard risk penalties of up to AU$1.1 million. Therefore, they cannot be ignored.

As the changes are bedded down in practice, there will be some uncertainty and it's too early to tell how some aspects of the new system will work for businesses. Businesses will need to accept some pain during the implementation process, but it is hoped that as the changes become the norm, they will also create benefits for consumers to drive market growth.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Georgina Hey
Rebecca Brenikov
Similar Articles
Relevancy Powered by MondaqAI
HBA Legal
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
HBA Legal
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions