Government faces a Country of Origin Labelling (CoOL) mouse trap
By Joe Lederman
FoodLegal Lawyers and Consultants
© Lawmedia Pty Ltd, March 2015
After earlier signalling that no changes to country of origin labelling would occur, the Australian Federal government on 16 February 2015 announced that the country of origin labelling requirements for foods in Australia will be reformed in the near future. Is the Australian government walking into a mouse trap from which there is no escape?
The government announcement followed a recent hepatitis A outbreak which was first linked to imported frozen berries grown in Chile and packaged in China.
Federal Industry Minister Ian Macfarlane and Federal Agricultural Minister Barnaby Joyce were requested by Prime Minister Tony Abbott to prepare a joint submission on changing the current Country of Origin requirements of food labels for consideration by the Federal Cabinet by the end of March 2015.
Previously the Australian government had expressed opposition to changing Country of Origin labelling rules, on the basis of the following arguments (which were conveyed in earlier media interviews of the Prime Minister and other government ministers):
- Increased costs for industry and a desire by the government to avoid increasing red tape
- The complications that can arise from products sourcing ingredients from Australia at certain times of year, and elsewhere at others depending on availability and seasonality
- The extra costs in developing new packaging and complying with new laws being likely to lead to additional costs to be passed on to consumers
2011 Blewett Panel “Labelling Logic” recommendations
In 2010, the previous Federal government created a food labelling review panel, headed by a former Labor government Minister of Health Dr Neal Blewett. In 2011, this Independent Panel for the Review of Food Labelling Law and Policy released its final report “Labelling Logic: Review of Food Labelling Law and Policy” (the Blewett Report) which made a recommendation that:
For foods bearing some form of Australian claim, a consumer-friendly, food-specific country of origin labelling framework, based primarily on the ingoing weight of all the ingredients and components (excluding water), be developed.
The Blewett Report highlighted “widespread concern over the confusing plethora of definitions to the Australian nature of the product” – referencing a 2010 Newspoll Survey which found 63% of respondents incorrectly interpreted the meaning of a ‘Made in Australia’ claim.
The Blewett Panel Report suggested the following statements and definitions as alternatives to the current rules for packaged foods:
- “‘Made of Australian Ingredients’ – to be a food at least 80% by weight (excluding water) of all ingredients or components of Australian origin
- ‘Made of Australian and Imported Ingredients’ – to be a food at least 50% by weight (excluding water) of ingredients and components of Australian origin
- ‘Made of Imported and Australian Ingredients’ – to be a food less than 50% by weight (excluding water) of ingredients and components of Australian origin.”
For unpackaged foods, the Blewett Report recommendation was that a “Grown in Australia” label could be used for foods wholly grown in Australia”.
Subsequently, the latter recommendation was followed up in 2013 when Standard 1.2.11 of the Food Standards Code was amended to include a “Grown in” claim. Under the Australian Consumer Law safe harbours, ‘grown in’ or variations such as ‘Australian Grown’ can be used when the following requirements are met:
(a) “the country referred to as the country in which the goods were grown could also be represented as the country of origin of the goods, or the country of which the goods are the produce, in accordance with the safe harbour defence requirements for such a claim
(b) “each significant ingredient or significant component of the foods was grown in that country and
(c) “all, or virtually all, processes involved in the production or manufacture happened in that country”
Is the current food labelling scheme inappropriate for food?
The problem highlighted in the Blewett Report was that country of origin labelling is designed for all consumer products, rather than specifically for foods. The Blewett Report argued that in relation to foods, the buyers’ concern is “more likely to be where the ingredients and product components are sourced from”. Supportive evidence was not provided for this proposition.
Government response to Blewett Report
In December 2011, the Legislative and Governance Forum on Food Regulation (convening as the Australia and New Zealand Food Regulation Ministerial Council) had released a joint response to the Blewett Report. This government response was made by a forum comprising of the Ministerial representatives of the Federal and all State and Territory governments. The Federal government at that time was the former Australian Labor Party-led government.
This All-Government response did not support the Blewett Report’s recommendation of a new country of origin framework. The government said, significantly, food businesses would bear extra costs from any change and “previous economic analysis suggests that this approach may have a negative impact on both food manufacturers and local suppliers, potentially decreasing the competitiveness of Australian food businesses and increasing demand for imported foods”.
The said Government response to the Blewett Report concluded that the best approach would not be to change origin labelling laws but “to engage in a review of existing requirements and potentially develop education campaigns to clarify terms to consumers”. How this could be done was never explained.
October 2014 parliamentary inquiry report
In October 2014, Ministers Barnaby Joyce and Ian Macfarlane tabled a report titled “A clearer message for consumers” which suggested the use of two new labels:
- “Made in Australia from mostly local ingredients” – for products containing more than 50% Australian content; and
- “Made in Australia from mostly imported ingredients” – for products containing less than 50% Australia content.
The Industry Minister Mr Macfarlane was subsequently quoted in The Australian newspaper as stating this proposal would be an improvement over the current labelling option of “Made in Australia from local and imported ingredients” which he described as “meaning absolutely nothing”.
ACCI opposes changing Country of Origin Label rules
On 26 February 2015, the Australian Chamber of Commerce and Industry (ACCI) issued a media release opposing any proposed changes to the current rules for Country of Origin labelling.
The ACCI members include some of the major retailers and food importers.
The concerns expressed by the ACCI included the following:
- The risk of the Australian government creating “multiple, inconsistent systems for determining a product’s country of origin” (for different purposes) “leading to extra costs for business and consumers but no better outcome on product safety” (note: it was the Hepatitis A outbreak linked with imported berries that re-invigorated calls for reform of CoOL rules).
- Creating inconsistency with international product rules.
- A loss of Australian jobs.
Not all Australia food consumers want “Australian ingredients”
There is some anecdotal evidence that retail food consumers in Australia prefer Australia-grown fresh foods over some products grown in countries that do not have a good history of reliable food safety systems. However, in the case of packaged foods, there appear to be lesser concerns about imports and there may not be the same level of preference for Australian ingredients.
In the case of some beverages, there is even evidence of Australians preferring boutique imports rather than the equivalent product manufactured in Australia under licence to use a foreign brand. See Australian Food News (10 March 2015) article “Australians don’t always want to buy ‘Australian ingredients’”.
- Why did the Federal government not act fully on its own October 2014 recommendations?
One possible explanation is that there may have been some differences in opinion between the two Ministers, Joyce and Macfarlane, on the method or extent for implementing these changes in a new Country of Origin labelling regime.
- Why is New Zealand not so worried about Country of Origin labelling rules?
FoodLegal has previously argued that the New Zealand approach of a non-mandatory scheme is smarter. New Zealand has always exempted itself from Standard 1.2.11 (Country of Origin Standard) of the Australia New Zealand Food Standards Code, from its outset.
This is because New Zealander consumers assume that anything without a country of origin label is produced outside the country. In New Zealand, the label “Product of New Zealand” is a voluntary claim but is genuinely a premium product claim that can attract the New Zealand consumer willing to pay a price premium for New Zealand product. As voluntary claims are still legally enforced, strict enforcement protects New Zealand producers. See May 2011 FoodLegal Bulletin article How mandatory should Country of Origin Labelling be?
So everyone now awaits the end of March 2015 deadline for a Federal Cabinet proposal with bated breath, or perhaps it is “baited breath”:
Sally, having swallowed cheese
Directs down holes the scented breeze
Enticing thus with baited breath
Nice mice to an untimely death
(by Geoffrey Taylor Cruel, Clever Cat 1933)
For previous coverage of Country of Origin labelling issues, refer to previous FoodLegal Bulletin articles:
- Country of Origin claims that are beyond the ambit of current laws (May 2013)
- Is Australia’s Country of Origin Labelling (‘CoOL’) regime vulnerable to WTO appeal? (April 2012)
- How mandatory should Country of Origin Labelling be? (May 2011)
- Further analysis of Primo Country of Origin Labelling case (August 2010)
- Resolving the conflicts over ‘safe harbour’ labelling for ‘Country of Origin’ within Australian laws (June 2010)
- ACCC questions when ‘local’ seafood not so local (May 2010)
- Two more issues raised in Country of Origin Labelling controversy (February 2009)
- Country of Origin Labelling: Consumer concerns revisited (December 2008)
- Why Australian food companies need to consult with government on international food standards (December 2008)
- Can you say your food is a ‘Product of Australia’ when all the packaging is from overseas? (October 2008)
This is general information rather than legal advice and is current as of 10 Mar 2015. We therefore recommend you seek legal advice for your particular circumstances if you want to rely on advice or information to be a basis for any commercial decision-making by you or your business.