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Does the new country of origin labelling apply to inner packs?

Published: 8 May 2018

Does the new country of origin labelling apply to inner packs?

By Charles Fisher (FoodLegal Principal)

© Lawmedia Pty Ltd, May 2018

The new Country of Origin Food Labelling Information Standard takes mandatory effect as of 1 July 2018. As with any new piece of legislation, there any many concerns and uncertainties as to how the Information Standard will be interpreted and enforced. However, this article does not tackle a grey area but rather a regulatory issue that appears to have been forgotten by the Department of Industry in drafting the Standard and currently ignored by the ACCC in guiding the food industry to achieve compliance. Namely: does the new country of origin labelling apply to inner packs?

What is an inner pack for food labelling purposes?

Standard 1.2.1 of the Australia New Zealand Food Standards Code (the Food Standards Code) details when a food product must “bear a label” or not and the extent of the information that must be included in said label.

This Standard also includes a number of scenarios where products are exempt from “bearing a label”, even though the products may be packaged. It is important to note that the Food Standards Code defines a “label” separately to the “package” of a product. Having to “bear a label” is the obligation on a product to declare all the information prescribed by the Food Standards Code and applies whether or not a product is packaged (as unpackaged foods may have to declare the information required to go on a label through some other means).

For food products that are sold at a retail level (we note that what constitutes retail sale is not defined in the Code), common exemptions from having to “bear a label” include:

-       Products made and packaged on the premises from which it is sold (a common food service exemption);

-       Products packaged in the presence of the purchaser (common takeaway and delicatessen exemption); and

-       Products that are delivered packaged and ready for consumption at the express order of the purchaser (the pizza delivery exemption).

However, pertinently for this article, there is no exemption from inner packs from “bearing a label”. This is because the intention of the Food Standards Code is not for inner packs to be absent of any mandatory information; but rather for inner packs to be required to declare less information that would be required for outer packs.

Section 1.2.1-6(3) states that:

If the food for sale is sold in packaging that includes individual packages for servings that are intended to be used separately (individual portion packs), but which:

(a)      are not designed for individual sale; and

(b)      have a surface area of 30 cm2 or greater;

then the individual portion pack is also required to *bear a label, with the information referred to in subsection 1.2.1—8(3).

From the above, we can see that inner packs (named individual portion packs) are required by the Food Standards Code to bear a label detailing allergen information if they have a surface area of 30cm2 or more. If they have a surface area of less than 30cm2, there is no obligation for them to bear a label. The important legal distinction to note at this point is that inner pack above a certain surface area still legally must “bear a label”, even if it is only to declare allergens.

This limited labelling obligation clearly exists to protect consumer safety in relation to products whose outer packaging may have been discarded. There is no reason for any other consumer protection labelling to be on inner packs as the purchasing decision has already been made. This means that under the previous country of origin labelling regime created under Standard 1.2.11 of the Food Standards Code, there was no obligation to declare the country of origin on inner packs.

The question this article seeks to address is whether that legal situation has now changed.

When does the new Information Standard apply?

The new Country of Origin Food Labelling Information Standard (the new Information Standard) is an interesting piece of legislation. Unlike the previous country of origin labelling regime for food, it is not within the Food Standards Code. Instead, it forms part of the Competition & Consumer Act and Australian Consumer Law. As an information standard, it has the weight of law but did not have to go through Parliament. Instead, it was created by the Department of Industry as delegated legislation. This change also means that food regulators no longer enforce this mandatory piece of food labelling. Instead, it has become the complete responsibility of the Australian Competition and Consumer Commission (ACCC) to enforce.

Notwithstanding the above, the new Information Standard does include a number of references and definitions from the Food Standards Code.

The provisions for when food products are exempt from having to declare the country of origin despite being packaged and sold retail are very similar to the exemptions from having to “bear a label” mentioned above.

However, there is no corresponding or additional exemption from country of origin labelling for inner packs or individual portion packs.

Strictly speaking, the obligation to declare the country of origin on the pack of food sold at retail applies when that products “bears a label” as defined in the Food Standards Code. As noted above, inner packs/individual portion packs with a surface area greater than 30cm2 are required under the Food Standards Code to “bear a label”.

Once you identify that a product must “bear a label”, the new Information Standard then requires that any “package” must bear a label that makes the country of origin declaration required by the Information Standard for that product.

“Package” is defined differently in the new Information Standard than it is in the Food Standards Code. In the Dictionary of the new Information Standard, “package” is defined as “any container or wrapper in or by which food for sale is wholly or partly encased, covered, enclosed, contained or packaged; and - if the food is carried or sold or intended to be carried in sold in more than one package - includes each package” [Emphasis added].

Given that:

-       Under the Food Standards Code, many inner packs must “bear a label”; and

-       The obligation under the new Information Standard to declare a country of origin applies to each package a product is in; then

it is clear that the effect of the new Information Standard (if not its intention) is to require inner packs to also declare the country of origin.

As inner packs are not mentioned at all in the new Information Standard, this obligation appears to apply whether the inner pack is visible or not at the point of purchase - but does not apply to inner packs with a surface area less than 30cm2 (as such packs are not required to “bear a label”).

To make matters worse, the ACCC guide to assist industry in achieving compliance makes no mention of inner packs or individual portion packs at all (at the time of publishing)*.

What is going to happen?

If the ACCC were to adopt this strict interpretation, every single product that has inner packs that did not previously have to declare a country of origin would have to be re-labelled to achieve compliance (as well as the outer packs).

However, this absence of exemptions and guidance appears to be more of an oversight on behalf of the Department of Industry and the ACCC, rather than an intentional change to the law.

The ideal outcome would be for the Department of Industry to rectify its omission and create an exemption for all inner packs not meant for individual sale with compliant outer packs (regardless of the surface area of the inner packs).

If the Department of Industry were to fail in this regard, the ACCC could exercise regulatory discretion and not prosecute the many food companies that would be non-compliant post 1 July 2018. However, relying on regulatory discretion is not always best practice for industry, especially when the legislation is as clear as it is. What would give industry more confidence moving forward (and be the cheapest option for government agencies) would be for the ACCC guide to be amended to clearly state that the ACCC will not be prosecuting inner packs that do not declare their country of origin when the outer packs compliantly do so.

 

*This article was written on 7 May 2018 and published in the May 2018 issue of FoodLegal Bulletin. This is general information rather than legal advice and is current as of 7 May 2018. 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.


This is general information rather than legal advice and is current as of 8 May 2018. 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.