In January of this year, we outlined the proposed changes to the country of origin food labels in Australia in our article “Consumer Law Update: New Country of Origin Food Labels to be Rolled Out in 2016”. As of 1 July 2016, the new country of origin food labelling system commenced in Australia under the Australian Consumer Law (ACL). The changes apply primarily to consumer food products for retail sale in Australia. This includes retail stores, vending machines and online sale of consumer goods. However, it does not apply to food sold in restaurants, takeaway shops, cafes or schools.
The aim of these changes is to make it easier and clearer for consumers to identify where food products are produced, packaged, grown and made. The Australian Competition and Consumer Commission (ACCC) has provided clarity on the specific changes which are required and how food manufacturers can best prepare themselves. This article explores these changes.
1. The New Country of Origin Food Labelling Requirements
It is important to remember that the new laws will not be mandatory until 1 July 2018. This is to allow businesses enough time to internally plan for the change and to sell the remainder of their existing stock. Food products that have the old product labels at the end of the two-year transition period can be sold until their use-by date. While there is the two-year transition period, consumers can expect to see the changes to labels towards the end of this year.
Under the new standards, foods produced, grown or made in Australia are required to have a label displaying the following:
- The Kangaroo in a triangle;
- A statement that the food is grown, produced and made in Australia; and
- A percentage amount shown in a bar chart for the minimum proportion of Australian ingredients.
For foods that are imported (as in grown, produced, packaged or made outside of Australia) they must have the country of origin displayed on the label in a clearly defined box.
2. Requirements for “Made In” Claims on Labels
A business must satisfy the following criteria to claim that a product has been “made in” in a particular country:
- The product was made or “substantially transformed” in the specified country; and
- At least 50 percent of the costs incurred in making that product was in that country.
To satisfy the requirement of “substantially transformed,” a business must establish that there was a fundamental change in the form, appearance or nature which created a new product in that country. Imported products which are slices, canned, frozen, reconstituted or repackaged in Australia cannot make this claim.
However, it is important to note that the Australian Government is still proposing changes to the “made in” claims which could see the 50 percent of costs test removed and some further clarity on what constitutes “substantially transformed”.
3. Misleading and Deceptive Conduct
In light of these changes, the ACCC has warned businesses to not create a false and misleading impression in relation to the country of origin of a product. Businesses will be held liable for misleading and deceptive conduct if they represent through words and/or a logo that a product was made in a particular country where it is inaccurate. As such, it is important for businesses to understand what is required of them to avoid breaching the rules.
Key Takeaways
The new country of origin food label changes aims to make it easier for a consumer to identify and understand where the food product has been made. Businesses that do not comply with the new requirements as of 1 July 2018 may find themselves in a legal battle with the ACCC. It is integral that businesses understand their obligations under these new changes to avoid contravening the rules. If you are a food manufacturer, speak to one of our consumer lawyers on your key responsibilities on 1300 544 755 or fill in the form below.