The latest iteration of the CoOL Reforms, which have now been agreed upon to take effect from 1 July 2016, reflect an inherent confusion about whether the reforms are addressing a food safety issue or clarifying a consumer law requirement. It appears that the food industry will need to ensure compliance with both objectives under the new CoOL regime.
At the Meeting of Ministers for Consumer Affairs on 31 March 2016 the Commonwealth, State and Territory Ministers agreed on the Country of Origin Labelling (CoOL) reform to take effect from 1 July 2016. The revised CoOL proposal now distinguishes 'priority foods' which have mandatory labelling requirements and 'non-priority foods' which do not.
For 'priority food' the CoOL labels must identify:
- Whether the food was grown, produced or made in Australia - which will be indicated by the kangaroo logo and the first part of the standard phrase; and
- The percentage of Australian ingredients in the food, by weight, – which will be indicated by a percentage bar and the second part of the standard phrase.
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The CoOL reforms now also address our previous concerns [click here to read our previous alert "Missing a Key Ingredient"] by introducing an additional requirement for the country of origin to be stated for food or ingredients not from Australia. Where the sources of ingredients vary, alternative labels will allow an average portion of ingredients to be specified.
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The question remains whether the CoOL reforms are an improvement for consumers wanting better information to make informed purchasing choices. Arguably the CoOL creates a disproportionate and unjustifiable emphasis on the importance of country of origin for consumers and the introducing of 'priority foods' implies that the origin of that food has a greater significance for risk of contamination and poor food hygiene than is actually known to be true. While consumers should be provided with clear and truthful information regarding the origin of the food they purchase and consume, country of origin claims are a consumer law issue and should not only be applied to 'higher risk foods'.
The CoOL labelling requirements also reverse the labelling hierarchy by prioritising this consumer information issue over mandatory health information such as allergen statements or health warnings. Additionally, if the CoOL information is given such disproportionate prominence on a label, the CoOL reforms risk reinforcing consumer misunderstanding about the relevance that country of origin has to food safety.
Of note for the food industry is that the CoOL reforms will also bring about an important change to the regulatory control of origin labelling which will be transferred from Australian Food Standards Code, administered by the Food Standards Australia and New Zealand (FSANZ) to the Australian Consumer Law (ACL) administered by the Australian Competition and Consumer Commission (ACCC).
To enable the CoOL reforms to operate under the ACL amendments will be introduced to the safe harbour provisions in the ACL relating to "Made in" defences and removing the 50% production cost test and clarify the meaning of 'substantial transformation.' We anticipate that further amendments to the ACL may be required to address mislabelling and recall provisions as applicable to the CoOL requirements.
What do you need to do?
Businesses will have a 24 month transition period from the date of commencement to implement the labelling requirements. Throughout the transition period, products labelled with existing country of origin claims will still be required to meet the requirements of the Food Standards Code. After the end of the transition period compliance and enforcement activities for country of origin representations will be the sole responsibility of the ACCC.
Food producer will first need to determine if they produce or supply 'priority foods'. It will then be critical to understand how the percentage bars are calculated and in particular how compound ingredients are assessed in terms of calculating the origin percentage. Consideration should also be given to the distinction between goods ‘made in Australia’, as opposed to 'packed in' Australia. In some cases this will depend on the degree to which foods are transformed from raw ingredients in Australia.
Food producers and importers should be taking steps to assess how the CoOL labelling requirements will apply to products and to obtain the relevant information about ingredients including those which may have seasonal variation in the country of supply. Consideration should also be given to ACL requirements for recall and reporting and managing mislabelling under the ACL obligations which will differ from those under the Food Standards Code which the industry is familiar with.