From 1 July 2018, country of origin labelling laws for foods will be changed. The new Country of Origin Food Labelling Information Standard (Quality Standard) aims to make it clearer to consumers whether a product was actually made and produced in Australia.
Following contaminated foreign product scandals (eg. foreign frozen berries and Chinese baby formula) affecting Australian and international consumers, this is an area of interest for many.
The Quality Standard was made under section 134 of the Australian Competition and Consumer Commission's (ACCC) Australian Consumer Law (ACL) which applies to Australian businesses.
It will apply if you sell products in Australia or if you import products labeled as being made or produced in Australia. While it does not need to apply to goods exported from Australia, you may still wish to use the Quality Standard, subject to the laws of the importing country.
Consumers are often willing to pay a premium for products grown or produced in Australia—companies wishing to take advantage of this need to ensure their claims about the origin of products are not false, misleading or deceptive.
The ACCC may bring an action against companies who make false, misleading or deceptive claims about country of origin with penalties of up to $1.1 million.
Now, to claim that a product was made in a particular country, any imported ingredients or components must undergo a "fundamental change" in:
- identity; or
- essential character.
Minor processing which only changes the form or appearance of imported goods will no longer be enough to justify a ‘Made in’ claim.
The information may take the form of a text statement (statements may need to be in a defined box) or a text and graphic label known as a "standard mark".
With growing consumer awareness, and tightening standards, all companies making claims about Australian country of origin should review the new standard to ensure compliance.
Businesses should take steps now to ensure they are ready to roll out new labels, packaging and/or advertising for products on the shelf as of 1 July 2018.
For Australian companies that grow and produce all or most of their products in Australia, this could be an opportunity to differentiate yourself in the market, charge higher prices and grow market share.
For those who only have a small percentage of their product produced in Australia, the Quality Standards will allow consumers to make more informed decisions about your product—this may affect your position in the market if consumers are sensitive to country of origin. You may wish to review your product content or supply chain ahead of time to ensure your reputation is not negatively affected when the new labelling comes into effect (particularly if current claims, packaging and advertising do not align with the new labelling).
Your brand may be your most valuable asset—be vigilant in protecting it.
Authors: Andrew Gill (Partner) and Anna Crowley (Lawyer), MinterEllison, Canberra