In their submissions to the Australian Consumer Law Review (the review), both the Business Council of Australia and the Retail Council proposed excluding food products from the mandatory reporting requirements of the Australian Consumer Law (Cth) (ACL). If such suggestions were implemented, the consumer law obligations for food businesses would change substantially. This article outlines the current reporting requirements in the ACL and discusses why organisations such as the Business Council of Australia and the Retail Council argue that the ACL should exclude food from mandatory reporting requirements.
Mandatory Reporting Requirement
Section 131 of the ACL requires suppliers of consumer goods to report consumer goods associated with the death, serious injury or illness of any person. They must do so if they become aware of the death, serious injury or illness of a person and consider that the use or foreseeable misuse of a consumer good caused, or may have caused the death, injury or illness. A supplier must also report where he or she becomes aware that another person considers that the use or foreseeable misuse of a consumer good caused death, serious injury or illness. Section 132 of the ACL contains a similar provision for product related services.
Under the ACL, a consumer good is a good that is intended to be used for household use or consumption. It also includes goods that have become fixtures since the time of supply if a supplier has issued a recall notice or recalled the good voluntarily. Food is a consumer good under the ACL. A supplier complying with Section 131 must notify the Commonwealth Minister in writing within two days.
The ACL does make some exceptions to its requirement for mandatory reporting for injuries or death caused by a product. If it is clear, or very unlikely, that a consumer good caused a death, serious injury or illness, a supplier need not report it. Also, a supplier does not need to notify the Minister if they have notified a death, serious injury or illness per a specified federal, state or territory law or applicable industry code. Regulation 92 of the Competition and Consumer Regulations 2010 (Cth) lists these laws and industry codes.
Recommendations to Exclude Food
In its submissions to the Review, the Business Council of Australia (Business Council) recommended that the review reconsider including food in Section 131 of the ACL. It argues that unlike other consumer goods, food does not ‘lend itself’ to the mandatory reporting regime. This is because it is often unclear when a food product has in fact caused serious injury or illness. The Business Council also noted that state and territory governments also have extensive notification procedures akin to Section 131 with which businesses must comply. As such, the reporting mandated in the ACL only duplicates processes without increasing consumer safety. Drawing on Food Standards Australia and New Zealand, the Business Council asserts that there are approximately one hundred food-related notifications each month, burdening both business and regulators. The burden is particularly onerous in cases of incident clusters. For example, when frozen berry products were linked to Hepatitis A in 2015, many businesses had to prepare a lot of reports and continue to do so even after regulators were aware of the issue.
The Retail Council recommends mandatory reporting on food should be removed from the ACL. The Council asserts that Section 131 has not improved consumer safety around food consumption. Rather, it has duplicated reporting between the ACL and other health-related notification regimes, causing more administrative complexities.
The Retail Council found that food retailers report problems under the current regime such as:
- Providing appropriate staff resources to ensure reporting occurs within two days;
- Difficulty in gathering evidence to substantiate a serious illness or injury in compliance with Section 2 of the ACL (which defines serious injury or illness), particularly when an issue comes to their attention on social media; and
- Unnecessary duplication of reporting, particularly when there is a cluster of incidents and regulators are already aware of the problem.
The suggestions of the Business Council and Retail Council are significant because they highlight the fact that effectiveness of consumer law depends on its ability to balance two equally important and interdependent principles. The first is consumer safety; the second is the necessity to prevent consumer law from becoming so onerous that businesses legitimately struggle to comply with its requirements. An incorrect balance between these two principles will diminish the application of the law itself.
At present, Section 131 of the ACL requires mandatory notification of serious injury, illness or death associated with a consumer good. In their submissions to the Australian Consumer Law Review, some organisations have called for regulators to exclude food products from this provision. The reasons behind this are that injuries caused by food products can be particularly hard to determine, as well as the to deal with the issue of reporting requirements from different bodies and the duplication of reports. An Interim Report is expected in the latter part of 2016 as part of the Review.
If you sell food products and would like a LegalVision lawyer to explain the consumer law obligations relating to your products or business, get in touch today by calling us on 1300 544 755.