A CoOL Change: New Country of Origin Labelling Laws may take effect in 2016

In brief 8 min read

We report on the Federal Government's proposed Country of Origin Labelling (CoOL) system, which would require companies to disclose the extent to which their food products are made in Australia.

How does it affect you?

• The new system is expected to be rolled out by mid-2016, provided agreement can be reached with state and territory governments. There will be a transitional period to allow manufacturers time to implement the new labelling requirements.
• The new laws will impact on the definition of 'Made in Australia', requiring manufacturers to provide more detail about the extent to which their products contain Australian ingredients.
• While specific enforcement provisions for the new regime are not yet available, labels that do not comply may be misleading and deceptive in breach of the Australian Consumer Law. The Australian Competition and Consumer Commission (the ACCC) has indicated that credence claims, which include country of origin claims, are a priority area of enforcement.

The existing regulatory landscape

CoOL for food is currently regulated by:

• the Australian Consumer Law (ACL), which precludes companies from labelling food products in a manner that may mislead or deceive consumers as to their origin. Breaches of the ACL give rise to civil proceedings and remedies can include pecuniary penalties, injunctions, enforceable undertakings, corrective advertising and the implementation of compliance procedures.
• the Australia New Zealand Food Standards Code (Food Standards Code), which requires country of origin labelling for most packaged and some unpackaged foods sold in Australia. Each state and territory has legislation that mandates compliance with the Food Standards Code.
• the Commerce (Trade Descriptions) Act 1905 (Cth) and the Commerce (Imports) Regulations 1940 (Cth). These laws require that a trade description of an imported good must be marked with the name of the country in which the goods were made or produced.

In early 2014, the Australian Government ordered an inquiry into the food labelling framework. The outcome was announced in July 2015, with the government recommending that CoOL for food be regulated through a mandatory information standard under the ACL. Below we look at some of the requirements under the new system.

Change on the horizon

The new system will require labels for food products made in Australia to carry a country of origin symbol with the well-known kangaroo logo, with the addition of a bar graphic. The shading in the bar will indicate the amount of Australian ingredients present in the product.

Made in Australia

For products made in Australia, the yellow shading of the bar will indicate the amount of Australian ingredients present in the product. For example:

Grown in Australia

For products grown in Australia, the symbol will appear with a fully shaded bar:

Grown in Australia

Where products include imported ingredients, it will not be mandatory for manufacturers to specify the country or countries from which they have been sourced, although they will be encouraged to do so voluntarily (at least online if not on the product label). Examples of product labels providing details beyond the mandatory requirements would be 'Made in Australia from Canadian pork' and 'Made in Australia from Australian carrots and French peas'.

If manufacturers choose to use a 'Packed in Australia' claim, they will be required to specify a separate country-of-origin (made in or grown in) claim with respect to imported ingredients:

If a product is made from ingredients sourced from more than one country, it may be described as 'Packed in Australia from imported ingredients'.

Earlier this year, Supabarn Supermarkets Pty Ltd and the Real Juice Company Pty Ltd each paid penalties of more than $20,000 to the ACCC in relation to representations made about two juice products manufactured by the Real Juice Company and sold by Supabarn. The ACCC considered that the following claims made on the product label made the false or misleading representation that the product was made from apples grown in Australia:

• 'It's produced locally using the freshest quality apples'
• 'Made in Griffith'
• 'Straight From a Farm'

In fact, the product was made from reconstituted apple juice concentrate imported from China. Under the new laws, depending on the level of 'transformation' of the product, it is likely that a 'Made in Australia from 0% Australian ingredients' or 'Packed in Australia, Made in China' label would apply to that kind of product.

Seasonal ingredients

Companies will have three options for labelling products that have significant seasonal variability:

1. Re-label seasonally.
2. Make an 'at least' claim – ie if the product is 70 per cent Australian ingredients in summer and only 20 per cent in winter, the label would read 'Made in Australia from at least 20% Australian ingredients'.
3. Use a seasonal average and carry a barcode that can be scanned by a consumer for further details about the ingredients used in each season.

Conclusion

Aside from the practical consideration of adopting the new labels, businesses should continue to ensure that all country of origin claims can be substantiated. Bear in mind that this obligation extends beyond direct claims such as ‘Made in Australia’, and other more generic claims about location or freshness could potentially create a false impression that a product is made or grown in Australia. Under the new system, the ACCC will retain its power to issue substantiation notices where it suspects a claim may be false or misleading, and businesses should continue to be vigilant in their labelling practices.

Sample product labels sourced from the Department of Industry, Innovation and Science, available at www.industry.gov.au/cool