In July 2018, the Australian government introduced a mandatory country of origin food labelling system, aimed at giving consumers more certainty about where their food is sourced from.
Under compulsory food labelling laws in the Competition and Consumer Amendment (Country of Origin) Act 2017, all food for retail sale must display labels indicating the proportion of food product that is made in Australia.
Compliance with mandatory food labelling laws may not be straightforward
The amended food labelling laws were introduced to give consumers transparency as to the true extent of a product being "Made in Australia". While the intention behind the legislation is commendable, the compliance requirements are complex and could pose a myriad of challenges for some producers.
Get the food label wrong and it could lead to problems for the producer. Under the "false and misleading" prohibitions under Australian Consumer Law, there is no general defence related to intention. So, even if you didn't intend to mislead, that is not a defence.
Severe penalties for false or misleading claims if "safe harbour" provisions do not apply
The new legislation does include "safe harbour" provisions, meaning the "false and misleading" rules will not be infringed as long as the claim is substantially true. For example, a representation that goods were grown in Australia is acceptable provided that each significant ingredient or component of the goods was grown in Australia; and that all, or virtually all of the production or manufacturing processes took place in Australia.
If the "safe harbour" requirements are not satisfied, you are likely to face a tough penalty, even if you had acted without any intent to mislead or deceive. If you can satisfy the court that you had no intention to mislead, this will most probably be taken into account in assessing the penalty.
Corporations face up to $1.1 million fines for making false or misleading food labelling claims
There are tough penalties under consumer law for making false or misleading claims; up to $1.1 million for a corporation. So, it is advisable to obtain legal advice if you are in any doubt.
If a food producer accused of breaching food labelling laws can establish that they did their best to comply, this will help in relation to the severity of the penalty. However, if the court finds that the labelling was, in fact, incorrect, the company's good intentions are unlikely to shield it from receiving a conviction.
ACCC conducts country of origin food labelling surveillance
Since the food labelling laws have been introduced, the ACCC has been conducting checks on 10,000 food products to ensure they comply. The new regulations apply to all food sold in shops or markets, online or from a vending machine. They do not apply to food sold in restaurants, cafes, take-away shops or schools. They also do not cover bread sold by bakeries or pet food.
ACCC food labelling FAQ website a valuable resource
The ACCC has a page on food labelling FAQs on its website, explaining the country of origin food labelling system. Here you'll find the details that need to be considered for a label when describing what proportion of a particular food is Australian made.
The website also outlines the different labelling requirements for "priority foods" such as meat, seafood, fruit, vegetables, most dairy products, bread and breakfast cereals; and "non-priority foods" such as biscuits, seasonings, soft drinks, tea, coffee and alcoholic beverages.
Yellow bar chart on food labelling to indicate portion of product made in Australia
In accordance with the Country of Origin Food Labelling Information Standard 2016, only food products that are wholly sourced and produced in Australia can display the "Australian made" logo, along with a full yellow bar that shows the product is 100 per cent Australian made.
But even Australian made products such as cheese or biscuits sometimes use key imported ingredients that are only available from other countries. In these cases, the food labels are required to use the yellow bar chart to show what proportion of their product is made from foreign ingredients.
Classifying a substantially transformed food product as Australian made
There are now strict definitions relating to whether food that is "substantially transformed" can qualify as being Australian made. Processes that only change the form or appearance of imported ingredients or components no longer qualify as a "substantial transformation".
In late 2018 the Federal Court held that a complementary medicine manufacturer who marketed fish oil capsules and vitamin D capsules could not claim that the product was "substantially transformed" in Australia. Although the material from which the capsules themselves were manufactured was Australian in origin and the encapsulation process was conducted in Australia, the fish oil and vitamin D were imported from other countries.
In addition, the extent to which a food product is Australian made is based on the proportion or weight of Australian ingredients in the food. This can cause confusion, as food producers often use volume measures rather than weight measures.
Non-compliance with food labelling laws could lead to action being taken by ACCC
The country of origin food labelling laws are complicated. It's recommended that Australian food producers seek legal advice to ensure they're acting in accordance with the regulations, so as to avoid a penalty.
Ironically, foreign product labels need only say "Product of X nation" and indicate in general terms whether the product is made of local and/or imported ingredients.
For further information on food labelling laws and how they may affect your business, please visit:
- Department of Industry, Innovation & Science: Country of origin food labels
- ACCC: Country of origin
- ACCC: Country of origin claims and the Australian Consumer Law
- ACCC: Country of Origin Food Labelling Style Guide