Current Developments in Food Law and Policy

Date Published

Author

By Joe Lederman 

FoodLegal Lawyers and Consultants

© Lawmedia Pty Ltd, August 2011

• FSANZ considering Country of Labelling requirements for unpackaged meat
• Australian Commonwealth Senate accepting submissions on supermarket dairy pricing inquiry
• Consumer and industry groups call for Supermarket Ombudsman
• The ACCC obtains undertakings from Aldi and Spring Gully Foods in relation to honey misrepresentations of origin
• Palm Oil Labelling legislation considered by the Federal House of Representatives
• GS1 Australia and AFGC launch Recallnet to assist with product recalls
• Private members’ Bill proposes farm gate price transparency in Australian supermarket prices

1. FSANZ considering Country of Labelling requirements for unpackaged meat

On 18 July 2011, Food Standards Australia New Zealand (FSANZ) released its Assessment Report for Proposal P1011, which proposes to introduce country of origin labelling (CoOL) for all unpackaged meat under the Australia New Zealand Food Standards Code.

Under the current Standard 1.2.11 of the Food Standards Code, country of origin labelling is only mandatory for packaged foods, as well as unpackaged pork, fish, fruit and vegetables. However, these requirements do not extend to unpackaged meat, such as beef, sheep and chicken meat, apart from the current pork origin labelling requirement.

As a part of its Assessment of Proposal P1011, FSANZ considered four regulatory options:

1.    Option 1(a): abandon the Proposal and maintain the status quo under Standard 1.2.11.

2.    Option 1(b): abandon the Proposal and adopt a non-regulatory approach, such as industry self-regulatory guidelines and voluntary codes of practice.

3.    Option 2(a): develop draft variations to Standard 1.2.11 to extend CoOL requirements to unpackaged beef, sheep and chicken meat.

4.    Option 2(b): facilitate the drafting of a draft code of practice through the formal standard development process under the Food Standards Australia New Zealand Act 1991.

In its Final Report for Proposal 1011, FSANZ noted that of the four options, Option 1(a) imposes minimal additional costs, but also has the least benefits to stakeholders and does not address the lack of complete information for consumers regarding the country of origin of unpackaged meats.

Option 1(b) would incur some costs in the development of an industry code of practice, but will also provide a mechanism for voluntarily declaring country of origin for unpackaged meats. However, FSANZ dismissed this option, stating that “overseas experience show that a voluntary scheme is unlikely to lead to universal adoption of country of origin labelling unless the industry is provided with sufficient incentives to do so”.

Option 2(a) will involve some implementation costs for the industry, but it will provide consumers with mandatory information needed to make their purchasing decisions within the Food Standards Code framework.

Option 2(b) would be similar to Option 1(b), the only difference being that it may involve some costs on the part of FSANZ in facilitating the development of the code of conduct for the meat industry.

After assessing all four options, FSANZ concluded that while the benefits to consumers from extending CoOL requirements to unpackaged meat will be difficult to quantify, nonetheless, the omission of the country of origin labelling requirements in Standard 1.2.11 for some unpackaged meats is something that needs to be addressed due to “consumer perceptions of its importance” and the impact of CoOL “information on building consumer trust and confidence in the food supply”.

Therefore, FSANZ has expressed that its preferred approach is Option 2(a) – drafting variations to Standard 1.2.11 to extend country of origin labelling for all unpackaged meats.

Under the draft Standard 1.2.11 attached to Proposal 1011, unpackaged meats such as beef, veal, lamb, mutton, hogget and chicken will simply be added to Clause 3 of Standard 1.2.11, for which the CoOL requirement is mandatory.

Submissions on the Consultation Document released by FSANZ are open, and will remain open until 29 August 2011.

2. Australian Commonwealth Senate accepting submissions on supermarket dairy pricing inquiry

The Australian Federal Parliament’s Senate Economics Committee is currently undertaking an inquiry into the impact of supermarket price decisions on the dairy industry.

The inquiry came about after Coles supermarkets (followed by Woolworths, Aldi and Franklins) ran campaigns for discounting the price of milk.

The Senate Economics Committee will look specifically into issues such as:

• farm gate, wholesale and retail milk prices;
• the decrease in Australian production of milk from 11 billion litres in 2004 to 9 billion litres in 2011, of which only 25 per cent is drinking milk; 
• whether such a price reduction is anti-competitive; 
• the suitability of the framework contained in the Horticulture Code of Conduct to the Australian dairy industry; 
• the need for any legislative amendments;
• and any other related matters.
  
  

Submissions are due on 30 August 2011, and the reporting date, originally set for April 2011, has been extended to 1 October 2011.

3. Consumer and industry groups call for Supermarket Ombudsman

Consumer advocacy group CHOICE and the Australian Food and Grocery Council (AFGC) have both called for the establishment of the position of a Supermarket Ombudsman.

In a joint submission made to the Senate Economics Committees’ inquiry into supermarket milk pricing (as mentioned above, ‘the Submission’), CHOICE and the AFGC suggested that the recent milk pricing debate has revealed a need for a Supermarket Ombudsman to deal specifically with issues in supermarket supply chains, retail and competition.

The proposed Ombudsman would be responsible for addressing consumer and industry queries and concerns, developing and strengthening the currently voluntary “Produce and Grocery Industry Code of Conduct”, adjudicating disputes and hearing complaints, monitoring compliance and any anti-competitive conduct, and, at times, referring appropriate cases to the ACCC.

The Submission suggested that the Supermarket Ombudsman could be jointly funded by the Government and by retailers, taking into account the size of the retailer and the number of complaints involving them. 

According to the Submission, the Supermarket Ombudsman could sit within the broad framework of the ACCC, as is the case in the UK, where the Groceries Code Adjudicator sits within the structure of the UK Office of Fair Trading. Alternatively, the Supermarket Ombudsman could be established as a completely standalone office, independent from the ACCC.

4. The ACCC obtains undertakings from Aldi and Spring Gully Foods in relation to honey misrepresentations of origin

In August 2011, the supermarket chain Aldi and its supplier Spring Gully Foods gave the Australian Competition and Consumer Commission (ACCC) court enforceable undertakings in relation to misleading claims made about Aldi's 'Just Organic' honey.

Aldi and Spring Gully Foods introduced the 'Just Organic' honey label between January 2008 and mid 2010. The product claimed it was 'produced' or 'made with honey produced' on Kangaroo Island.

Kangaroo Island honey is considered to be a premium product, as the island has the only remaining pure population of the Ligurian honeybee in the world.

The ACCC alleged that the amount of Kangaroo Island honey contained in “Just Organic” honey produced between 2008 and 2010 varied from only 0.84 to 50.07%, with the exception of one batch, which contained 100% honey from Kangaroo Island.

In mid 2010, the “Just Organic” label changed its claim, stating that it contained “a blend of” Australian organic certified honey and honey 'produced on Kangaroo Island'. The ACCC claimed that in actual fact, the product at the time contained only between 0.076% and 10.13% Kangaroo Island honey.

Aldi and Spring Gully Foods have provided the following court-enforceable undertakings to the ACCC, that they will not represent that honey products are:

• sourced from a particular location when those products are not sourced 100 per cent from that location
• a blend of honey with reference to a particular location when those products contain an insignificant amount of honey from the particular location

Aldi and Spring Gully Foods have also undertaken to issue corrective notices on their websites, in stores and in newspapers and to establish and implement a compliance program.

5. Palm Oil Labelling legislation considered by the Federal House of Representatives

On 3 August 2011, the Australian Federal Parliament’s House Economics Committee commenced its inquiry into the Food Standards Amendment (Truth in Labelling – Palm Oil) Bill 2011.

The Truth in Labelling – Palm Oil Bill aims to make it a mandatory requirement for manufacturers or distributors of foods with palm oil as an ingredient to list palm oil on its contents label. Currently, palm oil in food can be labelled more generally as vegetable oil.

This Bill came about after mounting concerns from environmental groups such as Green Peace that the production of palm oil was having a negative impact rainforests that form the natural habitat of many endangered wildlife species, such as the Orang-utan. 

However, if manufacturers turned their back on palm oil altogether, the inclusion of more expensive oils as ingredients in food would be likely to lead to higher food prices for consumers.

As FoodLegal Bulletin reported in our June-July 2011 issue, this private member’s Bill was initiated by independent Senator Nick Xenophon. It was passed in June 2011 in the Australian Federal Senate with the support of the Australian Greens and the Coalition. This was despite recommendations from the Senate’s own Community Affairs Legislative Committee that the Bill not be passed.

The House Economics Committee has stated that it will be accepting submissions until 15 August 2011. Submissions made to the prior Senate Community Affairs Legislative Committee inquiry on this Bill will also be considered. Interested parties only need to make a submission if they wish to update their previous one. A public hearing will be held on 26 August 2011.

6. GS1 Australia and AFGC launch Recallnet to assist with product recalls

On 10 August 2011, GS1 Australia, the Australian Food and Grocery Council (AFGC) and Efficient Consumer Response Australasia (ECRA) launched their joint national product recall service - GS1 Recallnet.

As FoodLegal Bulletin reported in our March 2011 issue, the GS1 Recallnet service uses existing GS1 barcode and product tracking technologies to allow food companies and consumers to share information regarding industry-based recalls and withdrawal notifications. The notifications would be sent to targeted users and retailers, accompanied by instructions for handling, disposing and reimbursing the recalled products.

The advantages of this innovative technology are that recall notifications can be issued instantly and without duplication of effort, and companies are able to obtain immediate feedback from customers on the progress of the recall or withdrawal. The system also makes it easier to collate the data needed for companies conducting a recall to complete progress reports to regulators.

The Liquor Merchants’ Association (LMAA), the Food Service Association of Australia  (FSAA), Coles, Woolworths, Metcash and Costco as well as Food Standards Australia New Zealand (FSANZ) and the Australian Competition and Consumer Commission (ACCC) have registered with the service and are ready to receive notifications.

7. Private members’ Bill proposes farm gate price transparency

On 15 August 2011, Senator Nick Xenophon and House of Representatives Independent Bob Katter announced a proposal for a Farm Gate Price Bill to be presented to both Houses of the Australian Federal Parliament simultaneously.

This private members’ Bill, if passed, would require supermarkets to reveal what percentage of the retail price goes to the farmers. Independent grocers would be exempt, but major supermarkets would be required to publish the farm gate prices at point of sale and also on their websites.

The Farm Gate Pricing Bill will need the support of at least one of Australia’s major political parties to stand any chance of being passed.