Consumer Law Update: Changes to Country of Origin Food Labelling Requirements from 1 July 2016
If you produce, grow, make, pack or offer food for retail sale in Australia, you will need to familiarise yourself with the new country of origin food labelling requirements under the Country of Origin Food Labelling Information Standard 2016 (the Standard).
The new Standard is made under section 134 of the Australian Consumer Law (ACL) and will commence on 1 July 2016. Businesses will have two years to transition to the new arrangements before they become mandatory on 1 July 2018.
This Standard introduces easy to understand labels that can tell consumers at a glance where a product comes from. It also endeavours to provide businesses with greater certainty about the claims they can make about the country of origin of the food they supply, and to do so without excessive cost.
It will apply to food offered for retail sale in Australia, including in shops, farmers markets, online or from vending machines. The law will not apply to food sold in places like restaurants, cafes, schools, or provided by caterers.
Currently, food products offered for retail sale in Australia are required to comply with country of origin labelling requirements set out in the Food Standards Code, administered by Food Standards Australia New Zealand. Businesses must continue to comply with the Code until 1 July 2018, unless they choose to voluntarily adopt the Standard earlier. Any food products that still have the old labels at the end of the transition period can be sold until the end of their shelf-life.
Under the new system, labelling requirements vary depending on the type of food product and whether it was grown, made, produced or packed in Australia or another country.
Labelling for ‘Priority Foods’
Priority foods that are produced, grown or made in Australia will need to carry a clearly defined box containing:
- a logo enabling the consumer to easily identify the food’s Australian origin;
- a bar chart to provide a visual measure of the proportion, by ingoing weight, of the food’s Australian ingredients; and
- a statement indicating that the food was grown, produced or made in Australia and that indicates the proportion, by ingoing weight, of the food’s Australian ingredients.
Priority foods that are produced, made or grown in an overseas country will need a statement in a clearly defined box indicating that.
Where Australian food is exported, processed overseas without substantial transformation, and then reimported, the label will need to state what processing occurred overseas.
If the sources of ingredients vary, then the label needs to include an average proportion of the Australian ingredients.
The Standard also makes provision for the label to include a statement about the country of origin of one or more specific ingredients.
Labelling for ‘Non priority foods’
The Standard defines a set of non-priority foods and applies lesser country of origin labelling requirements on these foods. These include foods such as seasonings, biscuits, snack foods, tea and coffee. Non-priority foods are required to carry a text statement of their country of origin on their labels. Use of the more detailed country of origin marks specified in the Standard, which are mandatory for most other foods, is voluntary for non‑priority foods. However, if they are used voluntarily, they must comply with the Standard.
‘Product of’ and ‘Grown in’
‘Product of’ is often used for processed food and ‘Grown in’ is mostly used for fresh food. ‘Product of’ and ‘Grown in’ means that all of the significant ingredients of the food are from, and virtually all the processing occurred in, the country claimed as origin.
‘Made in’
‘Made in’ means that the product was made, or ‘substantially transformed’, in the country claimed, and at least 50 per cent of the cost to produce the product was incurred in that country.
A food is ‘substantially transformed’ in a country if the end product is fundamentally different from its ingredients. Even if a food is partially or totally comprised of imported ingredients, it can claim a country as its origin if it was last substantially transformed in that country.
‘Packed in’
For priority foods that are packed in Australia without substantial transformation here:
- if only some of the food was grown, produced or made in Australia, or if the food was imported from more than one country, the labelling must include a clearly defined box containing a statement indicating that the food was packed in Australia, and a bar chart and statement showing the proportion, by ingoing weight, of the Australian ingredients;
- if the food originates from a single overseas country, the label must state in a clearly defined box that it was grown, produced or made in that country. The label may also include a statement that the food was packed in Australia, but, if so, the label must then also include a bar chart showing that the food has no Australian ingredients
Watch this space – safety harbour provisions
It is also worth noting that on 4 May 2016, the Competition and Consumer Amendment (Country of Origin) Bill 2016 was introduced to the Parliament to clarify the country of origin labelling requirements by amending the definition of substantial transformation as it applies to the safety harbour provisions and removing the 50 per cent production cost test. The Bill was not passed by both Houses of Parliament prior to the dissolution of both Houses on 9 May 2016. Consequently, the legislation will be a matter for the incoming government.
This is general advice only. Liability limited by a scheme approved under Professional Standards Legislation.
Published June 27, 2016
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