Country of origin claims are an important way of telling consumers where your product comes from. In Australia, they may be required under the Australian Consumer Law (ACL). This article will define a country of origin claim and use case studies to outline possible penalties if you do not correctly label your product’s country of origin.
Definition of a ‘Country of Origin Claim’
A country of origin claim is a statement you make regarding where a product is sourced from, meaning where it was created, grown, manufactured or otherwise transformed. Generally, a country of origin claim is displayed as a “product of”, “grown in” or “made in” statement. You can communicate this claim in different ways, such as:
- a sticker;
- in written form; or
- a logo.
For example, fresh fruit often has stickers and many products in supermarkets have an ‘Australian Made’ logo.
Food Labelling
Under the ACL, the Country of Origin Food Labelling Standard 2016 requires country of origin labels to appear on most food sold in Australia. These labels follow specified guidelines, and standard words, graphics, and logos must comply with the information standard. A common Australian logo is the ‘Australian grown, Australian made’ green and gold kangaroo triangle logo and a bar chart graphic on Australian foods. Importantly, if you are a supplier and want to use the ‘Australian grown, Australian made’ logo on a non-food item, you must follow some key processes. This includes registering with Australian Made, fulfilling specific criteria, and obtaining the necessary licence, which often has associated fees.
It is also important to ensure that the key terms in the label reflect what you are trying to communicate. Key terms are in the table below
| ‘Grown in’ | This typically applies for fresh food. It indicates the food was grown, entirely processed, and has all its significant ingredients from that country. |
| ‘Product of’ | This typically applies to fresh food. It indicates the food was grown, entirely processed, and has all its significant ingredients from that country. |
| ‘Made in’ | This label applies if the food underwent its last substantial transformation in that country. It excludes processes like slicing, canning, freezing, coating or repacking. |
| ‘Packed in’ | This applies to where it was packed. It may also be used where one of the other claims cannot be made. |
Goods Other Than Food
The ACL still allows you to make a country of origin claim on goods that are not food. This claim can be in advertising or on product packaging. Standard terminology for these claims is similar to that for food items. It includes:
- ‘Grown in’: all significant ingredients were grown in that country, and virtually all processing occurred in that country.
- ‘Produce of’: all significant ingredients are from that country and virtually all processing occurred in that country.
- ‘Made in’ or ‘manufactured in’: the good underwent its last substantial transformation in that country.
The Australian Consumer Law and Terminology
Under the ACL, businesses have the same obligations and responsibilities across Australia. If you make a country of origin claim, it is irrelevant whether you chose to do so or were legally required. The ACL will, in any case, require that the claim be clear, accurate and truthful. The ACL also provides definitions of the standard terminology discussed above. It is important you understand these meanings, especially when your production process may involve steps overseas.
For example, the ACL provides that a ‘made in’ claim is acceptable if you can show your product was made and underwent its last substantial transformation in the country claimed. If your company imports leather into Australia from China, but the cutting, construction and finishing of the product occurs in Australia, you can make a ‘made in Australia’ claim.
The ACL prohibits you from making representations that are incorrect or likely to create a false impression. This includes false or misleading representations about where the goods come from, or their quality, value or price.
Case Studies
Below are some real-life examples of cases concerning country of origin claims. It is important to understand how the law interacts with a claim you may make.
Patties Foods
Early in 2015, Patties Foods recalled its Nanna’s Mixed Berries and Nanna’s Raspberries after 18 people contracted Hepatitis A. The berries were grown in Chile and China before being packaged in a Chinese factory. The berries were labelled as “Made in China”.
Supabarn Supermarkets Pty Ltd and The Real Juice Company Pty Ltd
In 2015, both Supabarn and the Real Juice Company received a $10,200 fine. The penalty was imposed due to misleading claims on their apple juice products. This included phrases such as, ‘It’s produced locally using the freshest quality apples’ and ‘Straight from a farm’. Importantly, the misleading claims also included a country of origin claim, which said the juice was ‘[m]ade in Griffith’ (in Australia). The apple juice was not grown in Australia and was from reconstituted apple juice concentrate imported from China.
ACCC Penalties and Consequences
Crucially, you may be subject to severe legal consequences for having a false country of origin claim, which counts as misleading or deceptive conduct under the ACL. The Australian Competition & Consumer Commission (ACCC) outlines that breaching the ACL can carry significant monetary and non-monetary penalties. The ACCC can levy pecuniary penalties (a monetary penalty) for:
- false or misleading conduct;
- pyramid selling; or
- unconscionable conduct.
The maximum penalty for this conduct is:
- $50 million for corporations; and
- $2.5 million for individuals.
The ACCC can use enforceable undertakings, injunctions, criminal proceedings and compensation orders to penalise companies and individuals who have contravened the ACL.
As a franchisor, you must not engage in misleading and deceptive conduct. We explain what it is and how to avoid it.
Key Takeaways
You make a country of origin claim when you state where your product comes from. The ACL does not require you to make a country of origin claim, although other laws may require you to do so. Also, a business can make any origin claim, provided it is not false or misleading. You should have a reasonable basis for a making country of origin claim and be able to substantiate your claim if required. If your country of origin claim is not clear and truthful, you may face legal consequences, such as paying significant penalties for misleading and deceptive conduct.
If you would like assistance regarding ADR or have any further questions, our experienced advertising compliance lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
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