Further changes proposed to Australian Country of Origin Labelling Laws in light of Hepatitis A outbreak

06 March 2015

A recent outbreak of Hepatitis A in Australia has been linked to a brand of imported frozen berries which has placed a greater urgency on clearer Country of Origin Labelling in Australia.

In recent weeks, a Bill to amend Country of Origin labelling of food has been introduced into Parliament by Greens leader, Senator Christine Milne which proposes changes to country of origin food labelling laws creating mandatory obligations for the making of various claims and changing the criteria for making such claims such as 'Grown in', 'Product of' and prohibiting the use of 'Made in'. The intention being, to assist consumers in making more informed decisions about where their products come from (with many consumers favouring food products which are locally produced and sourced). 

The proposed laws would apply equally to both Australian and non-Australian manufacturers and food producers that sell their food products in Australia.

The key proposals in the Bill are as follows:

‘Manufactured in Australia' 'Australian Manufactured' –  such claims must be made for packaged food that has been substantially transformed in Australia by way of processing and where at least 50% of the total cost of processing the food is incurred in Australia

This proposal is intended to replace the current 'Made in' claim', which would no longer be permitted. 

Current law permits 'Made in' claims where:

  • the goods have been ‘substantially transformed’ in that country;
  • 50% or more of the cost of producing or manufacturing the goods have be incurred in that country

Currently, a product can state it is 'Made in Australia', so long as 51% of the value of the product has been 'substantially transformed' in Australia – including not just the consumable product itself, but also the packaging.  In theory, a product can be completely imported, but simply mixed or packaged locally and still be labelled 'Australian Made'.

According to Senator Milne, the amendment is intended to achieve two important improvements:

  • it will clarify for consumers that the label is about where the food has been processed, not where the ingredients are from, and so provide a strong label identifying local manufacture to help Australians support local jobs in food processing; and
  • it will help prevent imported food from masquerading as Australian content by making it clear that the label only speaks to the processing, not the ingredients.

It will also provide for the creation of regulations to provide clear guidance on the meaning of 'substantial transformation' in relation to food processing.

The proposed changes will also remove the ability to make qualified claims such as 'Made in Australia from local and imported ingredients' which provides no detail on the exact origin of all the ingredients in a product or where it was packaged.

‘Product of Australia’ 'Produce of Australia' 'Australian Product' or 'Australian Produce' – such claims must be made where food has been wholly manufactured or processed in Australia and where all the significant ingredients of the food are grown in Australia

The criteria proposed for making such claims will remain unchanged.  Current law permits such claims where:

  • all, or virtually all, of the production or manufacturing processes must happen in the country identified;
  • all of the significant ingredients or components must come from the country identified.

All other packaged food that has minimal processing in Australia, but is not 'substantially transformed' must be labelled 'Packaged in Australia'. This also removes the ability of manufacturers to make qualified and non-specific claims which are currently permitted i.e., 'Packaged in Australia from local and imported ingredients'.

Unpackaged Food

The Bill also extends mandatory labelling to all unpackaged food for retail sale, subject to certain exemptions.

For unpackaged food that is grown in Australia (subject to meeting that criteria), there must be a label on or in connection with the display and there must be a statement on the label which says 'Grown in Australia', 'Product of Australia' or 'Produce of Australia'.

For the purposes of the Bill, 'Grown in' means if the food, ingredient or component, as the case may be:

  • is materially increased in size or materially altered in substance in the country by natural development; or
  • germinated or otherwise arose in, or issued in, the country; or
  • is harvested, extracted or otherwise derived from an organism that has been materially increased in size, or materially altered in substance, in the country by natural development

Currently, a 'Grown in' claim is only permitted where:

  • at least 50 per cent of the total weight comprises ingredients or components grown and processed in that country;
  • virtually all production or manufacturing processes happened in that country;
  • each significant ingredient or significant component was grown and processed only in that country.

For all other unpackaged food that is displayed for retail sale, but that is not grown in Australia, there must be a statement on the label that identifies the country or countries of origin of the food or indicates that the food is local food, imported food, or a mix of local and imported food, as the case may be.

Whether the Bill becomes law will depend on whether it has the support, in particular, of the Government. 

The Government, in determining whether to change the existing laws, will consider and need to balance a number of competing issues, and have a difficult job of ensuring that there is no impediment to non-Australian manufacturers/food producers and/or provide non-tariff trade protection to industries, but provide clear information to Australian consumers who wish to make an independent choice to support either Australian farmers or food manufacturers.

Authors

Amy Cowper

Amy Cowper

Associate
Australia

Call me on: +61 2 9226 9888

Kathryn Edghill

Partner
Australia

Call me on: +61 2 9226 9888