The two year transition phase to comply with new country of origin information requirements on food labelling and displays ends in less than three months. From July 1 2018, requirements of the Country of Origin Food Labelling Information Standard 2016 (the Standard) will become mandatory.
Subject to prescribed exclusions, the Standard generally applies to the retail sale of food in Australia and sales of food sold as suitable for retail sale without any further processing, packaging or labelling. This includes imported food.
What does this mean for business?
Enforcement within the ACL regime
Business faces a different enforcement environment under the Australian Consumer Law (ACL) regime.
The Standard was made under section 134 of the ACL (Schedule 2 to the Competition and Consumer Act 2010 (CCA)), and commenced on 1 July 2016. It replaces the country of origin food labelling requirements under the Australia New Zealand Food Standards Code, with a two year transition period.
As such, responsibility for enforcement has been transferred to new regulators, the Australian Competition and Consumer Commission (ACCC) and State and Territory consumer affairs agencies, who vigorously enforce the ACL.
Within the ACL regime, businesses are exposed to penalties of up to (currently) A$1.1 million for corporations and A$220,000 for individuals, as well as other sanctions for breaching the prohibitions under the ACL on supply, manufacture, possession or control of goods which fail to comply with the Standard.
An expected new penalty landscape
Reforms are currently before Parliament to further increase the maximum penalties applicable to business in this space.
The Treasury Laws Amendment (2018 Measures No. 3) Bill 2018 proposes a maximum penalty for certain ACL breaches (including the prohibitions and offences in relation to information standards) by a corporation which is the greater of A$10 million, or three times the benefit reasonably attributable to the conduct, or if the benefit cannot be determined, 10% of annual turnover in the relevant 12 month period. The proposed maximum penalty for an individual is A$500,000.
If passed, the maximum penalties for ACL breaches will be aligned with the maximum penalties for breaches of the competition provisions under the CCA.
Adherence to the substantive new country of origin requirements
Navigating the Standard requires a clear understanding by business of the country of origin of its food product and each ingredient, its supply chain and manufacturing processes over time, as well as the point of sale.
Where the Standard is applicable to sales of food, it mandates country of origin information on labelling or displays by use of either:
- a standard mark (comprising three components (the kangaroo logo for food grown, produced or made in Australia, bar chart indicating the proportion of Australian ingredients and explanatory text) or two components (without the kangaroo logo)), or
- a text statement.
Businesses must also adhere to after-sale information obligations.
Many products are already available to consumers with the new labelling information ahead of the 1 July 2018 deadline.
Continued compliance with other ACL obligations
Of course, businesses must continue to comply with other obligations under the ACL. This includes ensuring all packaging and advertising is not misleading or deceptive, or otherwise false or misleading in breach of the specific prohibitions (such as the prohibition on false or misleading representations about the place of origin of goods).
Accordingly, representations as to the origin of food, whether by words or imagery, on packaging and in advertising must be true and accurate, and not false or misleading or deceptive. Representations must also be able to be substantiated.
Revised 'safe harbours', which establish when certain country of origin representations are not in breach of specific prohibitions, were introduced with effect from February 2017.
In recent years, ACCC enforcement action (through infringement notices, court enforceable undertakings and civil court proceedings) in relation to origin, source or place claims under the ACL, has covered a wide variety of food products including beer, bacon, prawn meat, honey, ice cream, olive oil, biscuits, vinegar, meat and fruit.
In re-thinking the message to consumers about where their food is from, businesses must satisfy the country of origin food labelling requirements of the Standard where applicable from 1 July 2018. They must also ensure any other representations (for example, whether on packaging or in advertising) are true and accurate and not false or misleading, and are able to be substantiated. Finally, they must ensure processes are in place to manage ongoing information obligations.