Proposed changes to Australian country of origin labelling laws may have significant implications for those non-Australian manufacturers and food producers that wish to export food products to Australia.

A recent parliamentary enquiry conducted by the House of Representatives Agriculture and Industry Committee (Committee) has recommended that the Australian Government change country of origin labelling laws so that the criteria for making claims such as 'Made in' 'Grown in', 'Product of' and other premium claims is substantially stricter. The intention being, to assist consumers in making more informed decisions about where their products come from (with many consumers favouring food products which are locally produced and sourced).

Whilst the proposed laws would apply equally to both Australian and non-Australian manufacturers and food producers that sell their food products in Australia, it is unlikely that the proposed changes would have any significant negative impact on Australian producers or manufacturers.

However, any change to the existing framework, if it restricted trade or encouraged consumers or producers to substitute imported products for ingredients with Australian products or ingredients could be seen as inconsistent with a range of Australia's international trade agreements and create an unfair advantage to Australian producers or manufacturers.

The Committee’s proposal for the three claims are:

'Made in Australia from [country] ingredients' – such a claim can only be made where 90 per cent content is from the country specified

Current law permits such claims where:

  • the goods have been ‘substantially transformed’ in that country;
  • 50% or more of the cost of producing or manufacturing the goods have be incurred in that country

The current law allows Australian and non-Australian manufacturers to label their products 'Made in Australia' if it meets the current requirements above.

For example, Bacon sold in Australia made from Chinese pork is currently able to be labelled 'Made in Australia' if the pork is processed or packaged in Australia. Proposed laws would mean that it is likely that Chinese pork farmers wishing to export pork into Australia, would not meet the proposed criteria, thereby, not be permitted to use the claim 'Made in Australia' (notwithstanding most of the packaging and processing occurred in Australia).

'Grown in’ – such a claim can only be made where 100 per cent content is from the country specified

Current law permits such claims where:

  • at least 50 per cent of the total weight comprises ingredients or components grown and processed in that country;
  • virtually all production or manufacturing processes happened in that country;
  • each significant ingredient or significant component was grown and processed only in that country.

‘Product of’ – such a claim can only be made where 90 per cent content is from the country specified

Current law permits such claims where:

  • all, or virtually all, of the production or manufacturing processes must happen in that country;
  • all of the significant ingredients or components must come from that country.

For products which can’t make these premium claims, the Committee recommends two qualified claims:

  • ‘Made in [country] from mostly local ingredients’ – such a claim can only be made where there is more than 50 per cent Australian content;
  • ‘Made in [country] from mostly imported ingredients’ – such a claim can only be made where there is less than 50 per cent Australian content.

There have been a number of inquiries into Australia's food labelling system in the last ten years and country of origin labelling has been the topic of many public reviews as well as many unsuccessful legislative reform attempts in the past decade. In part, many previous reform proposals have been rejected on the basis that, if they proceeded, Australia would be favouring its local producers in breach of its international obligations.

Australia is party to a range of binding international trade agreements that relate to country of origin food labelling. Generally, these arrangements ensure that Australia's domestic regulation cannot create a barrier to trade or distort trade in favour of its domestic markets. As a party to these agreements, Australia must ensure that its domestic regulations are compliant with a range of obligations which work to that general objective.

The Government, in determining whether to change the existing laws in light of the inquiry, will consider and need to balance a number of competing issues, and have a difficult job of ensuring that there is no impediment to non-Australian manufacturers/food producers and/or provide non-tariff trade protection to industries, but provide clear information to Australian consumers who wish to make an independent choice to support either Australian farmers or food manufacturers.