By July 2018, labels on most food products that are made in Australia will have to clearly show the percentage of Australian-grown or produced ingredients,” according to ACCC Deputy Chair Dr Michael Schaper. See the ACCC media release ACCC puts business on notice about ‘made in’ country of origin claims (4 May 2017)

To assist businesses with the transition to the new food labelling requirements, the ACCC (Australian Consumer & Competition Commission) has released the Country of origin food labelling guidance, based on the Country of Origin Food Labelling Information Standard 2016 (the Labelling Standard).

The ACCC has also released the guidance for businesses making country of origin claims (the ACL Guidance) to explain the four ‘safe harbour defences’ which a business can use if the country of origin information is alleged to be false, misleading or deceptive in contravention of the Australian Consumer Law (ACL).

What follows are select extracts from the guidance on the Labelling Standard and the ACL guidance. This is followed by marketing commentary by Michael Field in which he explains the reasons why consumers are want proper information on country of origin.

Types of food covered by the Country of Origin Food Labelling Standard

The Labelling Standard applies to most food offered for retail sale in Australia (e.g. food sold to the public in stores or markets, online or from vending machines) if it is:

  • in a package; or
  • unpackaged, such as: seafood, particular meats, fruit and vegetables, nuts, spices, herbs, fungi, legumes, seeds or a mix of these foods.

The Labelling Standard does not apply to food that is:

  • otherwise unpackaged (e.g. unpackaged cheese, pastries or sandwiches)
  • only intended for export to overseas markets
  • sold by restaurants, canteens, schools, caterers, self-catering institutions, prisons, hospitals, medical institutions and at fund-raising events (e.g. a cake stall at a school fete)
  • made and packaged on the same premises where it is sold (e.g. bread in a bakery)
  • delivered and packaged ready for consumption, as ordered by the consumer (e.g. home delivered pizza)
  • for special medical purposes
  • not for human consumption (e.g. pet food).

How to comply with the Country of Origin Food Labelling Standard

There four country of origin claims that can be made: from Grown in which has the strongest connection to a country, to Product of and Made in which have weaker connections, to Packed in which has the weakest connection.

This is the ACCC guidance on their use:

1. Grown in

A claim that a food was ‘grown in’ a particular country is generally used for fresh food (e.g. fruit and vegetables) and means that that food was in fact grown in the country claimed. Foods with multiple ingredients can also claim to have been ‘grown’ in a specified country, as long as all significant ingredients are from that country and virtually all processing has occurred in that country.

2. Product of

Claiming that a food is the ‘product of’ a specified country means that all significant ingredients in the food are from the specified country and virtually all processing has been done in that country. This claim is commonly used for both fresh and processed foods.

3. Made in

The ‘made in’ claim means that food underwent its last substantial transformation in the country specified (this doesn’t necessarily mean that any ingredients are from that country). Certain processing such as slicing, canning, freezing, coating or repacking food will be insufficient to justify a ‘made in’ claim.

4. Packed in

Depending on the circumstances, the Labelling Standard may require, or permit, a food to be labelled with information about where it was packaged. A food that cannot claim to have been grown, produced or made in a particular country will only be able to make a ‘packed in’ claim.

The Country of Origin Food graphics & text requirements in the Food Labelling Standard

The text and graphic labelling requirements for a food item will vary depending on whether the food:

  • is a priority food (e.g. meats; fruit and vegetables; bread and dairy products), or
  • is a non-priority food (e.g. seasonings; confectionary; biscuits and snack food; bottled water; soft drinks and sports drinks; tea and coffee; and alcoholic beverages); and
  • was grown, produced, made or packed in Australia or another country.

The Labelling Standard sets out three possible country of origin graphics and text labels for food sold in Australia, each with its own mandatory requirements:

1. Three component standard mark – a graphic and text-based label which is mandatory for priority food items grown, produced or made in Australia. The label includes:

  • the kangaroo in a triangle symbol so you can easily and quickly identify the food’s Australian origin
  • the minimum proportion, by ingoing weight, of Australian ingredients, indicated by a percentage amount and shown in a bar chart
  • a statement indicating what percentage of the food was grown or produced in Australia

2. Two component standard mark – a graphic and text-based label which is mandatory for most priority food items packed in Australia. It may also be used for imported priority foods that contain Australian ingredients. The label includes:

  • the minimum proportion, by ingoing weight, of Australian ingredients, indicated by a percentage amount and shown in a bar chart
  • a statement indicating what percentage of the food was grown or produced in Australia

3. Country of origin statement – a text-only label which is used for non-priority food items. Imported priority foods must also, as a minimum, carry a country of origin statement in a clearly defined box.

How to safely make a Country of Origin Claim – the ‘safe harbour defences’

The Australian Consumer Law sets out situations where a business can safely make a country of origin claim without raising concerns for false, misleading or deceptive labelling. This is an extract from section 255 (1) of the ACL which sets out the four ‘safe harbour defences’:

Country of origin representations (food and non-food)

A person does not contravene the Australian Consumer Law only by making a Representation if the Requirements to be met column are met.

Please click here to view table

If a business satisfies the Requirements to be met then it will have a ‘safe harbour defence’ against an allegation that it has breached the Australian Consumer law insofar as the claim concerns a country of origin.

Failure to satisfy the Requirements to be met doesn’t mean that a business is unable to make that particular country of origin claim. A business may still make the claim provided they are confident an ordinary and reasonable consumer wouldn’t consider it to be false, misleading or deceptive.

The ACCC has produced a guide – Country of origin claims and the Australian Consumer Law (24 April 2017) which provides a full explanation, examples, and this case study:

Supabarn Supermarkets Pty Ltd and The Real Juice Company Pty Ltd

In 2015, the ACCC issued Supabarn, a supermarket operator, and The Real Juice Company, a juice manufacturer, each with a $10,200 fine for contravention of the ACL in relation to apple juice manufactured by the Real Juice Company and sold by Supabarn.

The label on the apple juice container carried the phrases: • ‘It’s produced locally using the freshest quality Apples’ • ‘Straight from a Farm’ • ‘Made in Griffith’

The ACCC considered that the labelling of the juice was misleading as it gave the impression that the product was made from fresh apples grown in Australia when it was made from reconstituted apple juice concentrate imported from China.

See Media release: ACCC acts on alleged false or misleading juice representations.

Note: this case study arose before the Food Labelling Standard was introduced on 1 July 2016, and so the contravention was dealt with under the Australian Consumer Law.

Marketing Commentary by Michael Field

Consumers increasingly want to know more about the food they purchase and consume. It is not unusual to see a grocery buyer in a supermarket aisle, reading product information on the label or packet to learn more about the ingredients, health rating or country of origin. The reasons are varied: from wanting to consume less sugar, salt or trans-fat through to dietary reasons such as diabetes and coeliac.

One of the more interesting consumer trends is ‘food miles’ - a term that refers to the distance food is transported from the time of its production until it reaches the consumer. The measure assesses environmental impact of food transport. Many consumers seek out local farmers markets or choose to ‘buy Australian’ at the supermarket in an effort to reduce ‘food miles’, believing buying locally positively contributes towards the environment and sustainable farming practices.

Another major reason consumers are paying more attention to country of origin information is the belief that produce grown in Australia is better for you, fresher and uncontaminated. Australian consumers have great faith in the Australian food and agricultural regulators, and they also want to support Australian farmers.

In the last decade, there have been a number of food safety incidents around the world such as the Chinese milk scandal. The scandal involved milk and infant formula along with other food materials being adulterated with melamine. The issue raised concerns about food safety and political corruption in China, and damaged the reputation of China's food exports. At least 11 countries stopped all imports of Chinese dairy products. See: https://en.wikipedia.org/wiki/2008_Chinese_milk_scandal

In addition, numerous environmental and lobby groups have raised concerns about unregulated pesticide use on imported fruit and vegetables. Similarly, open cage basa fish farming in Southeast Asia has raised concerns about disease, feed quality, farm operating standards and biological impact.

Most food brands and all supermarkets import produce from around the world. Global supermarket groups like Aldi benefit enormously from sourcing low cost produce from around the world to maintain their low prices. The new regulations put the onus on the major supermarkets and their suppliers to comply with the new regulations on country of origin labelling or risk fines.

The new labeling requirements are a good step towards greater transparency for the consumer and help level the playing field for brands and retailers who may be losing out to low cost imports masquerading as local produce.

I was surprised to see the Standard does not apply to food that is sold by restaurants. From a consumer marketing perspective, if a restaurant customer is ordering ‘fish of the day’, it would not be an unreasonable request for them to want to know the country of origin.

Michael Field is a strategic marketing consultant and partner in EvettField Partners. For more see www.evettfield.com