- Regulation
- Food and beverages sold in Australia are regulated under a complex system of state and federal legislation. This chapter will outline and assess Australia’s food and beverage regulatory environment and the impact on the food and beverage manufacturing industry.
- Regulation ensures that consumers are provided with safe food and given correct information about the products they buy. Effective regulation is the basis for Australia’s international reputation for safe and high-quality food and beverages.
Overarching food policy
6.3Australia has a bi-national regulatory food system with New Zealand under the Agreement between the Government of Australia and the Government of New Zealand Concerning a Joint Food Standards System. The agreement harmonises food standards between the two countries, reducing costs for industry and removing barriers to trade.
6.4Overarching food policy is set by the food ministers of Australia and New Zealand. The Food Ministers’ Meeting (the Food Ministers) are a group of Australian Commonwealth, state and territory ministers and a Minister of the New Zealand Government. Ministers are nominated by their respective governments, typically from either health or agriculture portfolios. The Hon Ged Kearney MP, Assistant Minister for Health and Aged Care, is the current chair of the Food Ministers’ Meeting.
6.5The Food Ministers are responsible for decision making regarding the food system; approving food policy and signing off on food standards. Key responsibilities include:
- developing mandatory policy guidelines for Food Safety Australia New Zealand (FSANZ) when setting food standards
- promoting harmonised standards between Australia and New Zealand
- general oversight of the implementation of standards
- promoting a consistent approach to compliance and enforcement by the jurisdictions.
- Australia’s food regulatory policy is harmonised between the Commonwealth, states and territories under the Food Regulation Agreement, signed in 2000. The agreement establishes a national approach to food regulation. It commits the states and territories to basing their food laws on the Model Food Provisions provided by the Food Standards Code (administered by FSANZ) and to amending their food laws in line with changes made to the code. (which is administered by Food Standards Australia New Zealand).
FSANZ and food approvals
6.7FSANZ has responsibility for development and management of food standards across Australia, with a goal of ensuring uniformity of food standards and ensuring food safety.FSANZ is an independent Commonwealth statutory agency established under the Food Standards Australia New Zealand Act 1991.
6.8FSANZ administers the Australian New Zealand Food Standards Code (Food Standards Code)which regulates food sold in Australia and New Zealand. The Food Standards Code covers:
- regulation of food ingredients, processing aids, colouring additives, vitamins and minerals
- the composition of foods such as dairy, meat and beverages
- regulation of food technologies such as genetic modification
- requirements for labelling for both packaged and unpackaged food, including mandatory warnings or advisory labels such as notification of the presence of allergens.
- Although food sold in Australia must comply with the Food Standards Code, FSANZ does not possess enforcement powers. Standards set by the Food Standards Code are legislative instruments which are given legal effect through the individual Australian state and territory food acts. Enforcement and interpretation of the Food Standards Code is therefore the responsibility of state and territory government agencies and local councils. Department of Agriculture, Fisheries and Forestry (DAFF) is responsible for enforcement of the Food Standards Code at the border.
- Manufacturers may apply to FSANZ to change the Food Standards Code if they wish to supply a product which does not comply with the code. FSANZ then assesses those applications using the following process (noting that more complex applications may have additional steps):
- A new application or proposal is submitted to FSANZ.
- The application or proposal is assessed and an initial assessment report produced. This is cleared by the FSANZ Board and goes out for public comment.
- Public comment is analysed and an assessment report is prepared, which includes a scientific risk assessment.
- This assessment report is approved by the FSANZ Board.
- The report may go out for another round of public comment. The comments received are analysed and changes made to the report if necessary.
- The FSANZ Board approves or rejects the final assessment report.
- The Food Ministers' Meeting is notified of the decision and if ministers do not request a review, the standard is gazetted (published) and incorporated into the Code.
- Once approved, any new standard or variation to a standard is adopted by Australian states and territories and by New Zealand authorities, and becomes part of food legislation.
Support for the work of FSANZ
6.11Generally, submitters supported FSANZ and considered it to be effective. Mr Jim Dodds, Chief Executive Officer, Safe Food Production Queensland commented that:
FSANZ is the standard setter and they set the standards once for Australia, and that's been a really great thing … FSANZ is actually central to actually setting the standards once. They're not a regulator, they're a standards setter. That's one of the really powerful things of the system, that it is done once, done well … FSANZ is important about setting the standard once and so our international trading partners know that it will always be that when it's Australian.
6.12Vow, who are currently undergoing a regulatory review process with FSANZ in relation to cultured meat, were also positive about the level of collaboration between FSANZ and industry. Mr George Peppou, Chief Executive Officer, Vow stated:
We've been engaging with several different regulators around the world, including the Singapore Food Agency, the US FDA, the UK's Food Standards Agency, regulators in the Middle East and across Asia, as well as with FSANZ in Australia and New Zealand. Our first regulatory approval has been with the Singapore Food Agency, which was working and collaborating with FSANZ through that approval process. Overall FSANZ has been really positive to work with; it's been a really positive experience. It felt like our goals around bringing really high quality and very reliably safe food to market completely aligned with us and FSANZ as the regulator. However, the only downside had been some of the delays involved. This is not due to FSANZ, or any lack of professionalism on their behalf. They have been consistently a very positive experience to deal with and a very highly-skilled and highly-capable regulator.
FSANZ criticisms
6.13However, the Committee heard some criticisms of FSANZ in relation to application fees and approval timelines. Food approval application processes can incur fees for expedited consideration, or where the application would ‘confer an exclusive capturable commercial benefit on the applicant.’
6.14Applications are assessed under one of four procedures: general, minor, major, and high-level health claim variation procedures. The most expensive process is the major procedure, which has a stated cost of $195,400+.
6.15Cellular Agriculture Australia (CAA) described the cost of food safety approvals in Australia as a ‘barrier to innovation’. Novel products such as cultivated meat and animal-free dairy products made using precision fermentation are usually classified as major procedure applications. CAA also noted that the fee incurred for major procedures is an additional cost to other necessary documentation for new products, adding an additional barrier for pre-revenue companies seeking to scale up new products.
6.16Submitters also raised that other international jurisdictions–the USA, Canada and Singapore–do not charge for novel food assessments. Submitters therefore argued that FSANZ’s fees make Australia a less attractive market for food and beverage innovation.
6.17Submitters also raised the issue of application process timelines. All G Foods commented on timeliness and the multiple necessary steps for approval, including the involvement of the Food Ministers Meeting, stating:
The regulatory process in ANZ is arguably complex with multiple government agencies involved in the mandatory two consultation phases and, the final regulatory approval does not sit with FSANZ but rather, it must be made by the Food Ministers Meeting. This results in longer approval times compared with for example, the Singapore Food Agency.
6.18FSANZ told the Committee that its approval timelines are amongst the fastest in the world. Dr Sandra Cuthbert, Chief Executive Officer, Food Standards Australia New Zealand stated:
As to the timeframes for FSANZ, approvals are among the fastest in the world and comparable to other advanced economies, including Canada, Singapore and the United States. It is important to note that we operate within statutory timeframes, which are three, nine and 12 months, and we meet these almost 100 per cent of the time. Where timeframes are not met, it's usually because the risk assessment is quite complex and the data provided might not be adequate, and we might need more information in order to complete the assessment. We set food standards efficiently to the point where we have international manufacturers coming to Australia for their first approvals to support their applications in other countries.
Suggested improvements
6.19Submitters suggest that FSANZ should be able to consider reputable international agency approvals of new technologies, ingredients and foods. This would reduce domestic approval timelines and would enable FSANZ to better allocate its resources to those foods not already approved elsewhere. Food and Beverage Accelerator advocated for a fast-track process:
While appropriate regulation is necessary for new technologies, ingredients and foods, those products that have already been approved by reputable international agencies should be considered for fast-track approval mechanisms. The recognition of food safety regulation from reputable international agencies would enable Australian F&B manufacturers to access new products and ingredients in a timelier manner. Consideration should be given to FSANZ accepting regulatory approval from well-regarded international agencies such as the European Food Safety Authority (EFSA).
6.20FSANZ acknowledged that it is currently limited by the Food Standards Australia New Zealand Act 1991 but noted that it was working on improvements in international harmonisation. Ms Christel Leemhuis, General Manager, Science and Risk Assessment, Food Standards Australia New Zealand, said:
FSANZ has actually undertaken a lot of work in this area around international standards harmonisation. I think it's important to note that our act constrains us in some of those areas. Where we're finding efficiencies is in that safety assessment sharing. We are very amenable to looking at this further, and the piece of work that we did in this space was provided to the Department of Health and Aged Care to filter into the act review to see what could be done further in this space.
6.21Submitters also suggested better funding for FSANZ to enable the agency to process applications, and reduce application fees. Mr George Peppou, Chief Executive Officer, Vow explained that additional funding could specifically benefit novel food applications:
It's really come down to the resourcing that they have available to be assessing and approving novel food applications. There is a significant volume of work to undertake to review a novel food, and especially manage the public comment process around that […]
One of the recommendations we've included in our submission is to increase the funding to Food Standards ANZ to allow them to increase their technical bandwidth and project management bandwidth to support additional novel food applications to be able to process them in line with their legislated targets.
6.22Another matter raised in evidence was in relation to the navigation of the FSANZ codes. Mr Warwick Billings, President of Cider Australia, shared in his submission that:
The FSANZ food standard codes when accessed electronically, open to the Federal Legislation - I understand the logic in this - always the current and history available.
BUT as a frequent users the result of this is that the whole Code is not searchable - only each component - which is fine if you know where the info you want exists, but if you do not know where in the Code it is, then it remains well hidden.
I have raised this with FSANZ on more than one occasion, and the response appeared to be a somewhat resigned shrug of the shoulders with the response “yes we get asked about that quite a lot” or similar.
So if the Federal Government is looking to improve things for everyone, then a means to make the FSANZ code searchable over the entire body, would be a good place to invest.
Review into FSANZ
6.23The Department of Health and Aged Care is currently reviewing the Food Standards Australia New Zealand Act 1991. The review was instigated by the Food Ministers’ Meeting in November 2019, which endorsed a plan to reform the bi-national food regulation system to ensure it remains strong, robust and agile. The review started in 2020 and is ongoing. There are four themes for investigation including, purpose and objectives, reforming standard settings, efficient and effective operations and improving system agility. It is expected that the Food Ministers Meeting will consider the findings in 2024.
6.24Industry has high hopes for the review outcome with Ms Samantha Blake, Deputy Chief Executive Officer, Australian Food and Grocery Council, commenting:
We do have a once-in-a-generation opportunity with the review of the Food Standards Australia New Zealand Act, which was brought into effect in 1991, to really look at how we can provide streamlined, flexible and proportionate regulation for industry without hampering its ability to deliver for consumer demand.
6.25FSANZ is also positively engaged with the review. Dr Sandra Cuthbert, Chief Executive Officer, Food Standards Australia New Zealand remarked that:
… the review presents an exciting opportunity for act modernisation to support a more mature and integrated food regulatory system. The review contemplates changes to FSANZ's operations and responsibilities that have the potential to streamline our processes and ensure a broader regulatory system that is well placed and fit for purpose into the future.
Other key agencies
6.26Australia’s food regulation system is based on policies, standards and laws overseen by a range of Commonwealth, state and territory agencies. This section identifies the key agencies in the food and beverage regulatory system and gives an overview of their roles.
Department of Agriculture, Fisheries and Forestry
6.27The Department of Agriculture, Fisheries and Forestry (DAFF) is also responsible for parts of the food system. DAFF enforces laws relating to agricultural goods imported into Australia, imported food safety and pest and disease risks.
6.28Under the Biosecurity Act 2015 DAFF manages and prevents threats entering Australia including exotic pests and diseases. DAFF conducts testing and inspection of imported food in accordance with the Imported Food Inspection Scheme, which is set up by the Imported Food Control Act 1992.
6.29Under the Export Control Act 2020 DAFF manages the export of certain goods, including food. DAFF’s responsibilities include ensuring that goods meet required standards for export, managing compliance and providing support for businesses seeking to export to ensure that they understand their obligations under the Act.
Office of the Gene Technology Regulator
6.30The Office of the Gene Technology Regulator (OGTR) is an independent Commonwealth statutory agency which administers the Gene Technology Act 2000 and related state and territory laws. The OGTR protects the health and safety of people, and protects the environment, from risks posed by gene technology. This includes the regulation of genetically modified organisms, including some that may end up in food products. However, the OGTR does not regulate the use of genetically modified products in foods, which is the responsibility of FSANZ.
Australian Competition and Consumer Commission
6.31The Australian Competition and Consumer Commission (ACCC) administers the Food and Grocery Code. The Code is a voluntary code under the Competition and Consumer Act 2010 that regulates the relationships between suppliers, wholesalers, retailers and consumers. These rules increase commercial transparency, impose standards of business practices and provide equitable dispute resolution. The ACCC enforces the Code and provides guidance material for industry participants, but does not conduct dispute resolution or resolve complaints.
6.32The ACCC also administers the Country of Origin Food Labelling Information Standard 2016. Country of origin food labelling gives consumers information on whether the product was grown, produced, made or packed in Australia. The ACCC’s provides education and investigates possible violations.
National Measurement Institute
6.33The National Measurement Institute (NMI) develops and maintains national measurement standards and administers the regulatory framework for measurement under the National Measurement Act 1960. NMI is involved in food safety, nutrition and labelling, supporting research and governance and aiding regulatory compliance. It is currently undertaking emerging work with the sector on measurements in new and novel areas, including researching improved methods to accurately capture nutrients such as vitamin D and amino acids.
States and territories
6.34Legislation in each of Australia’s states and territories gives legal effect to the Australian New Zealand Food Standards Code discussed earlier. Each state and territory have agreed to implement amendments to apply any changes to the Code. Food regulation in the states and territories is overseen and enforced by various departments and agencies, including at the local government level.
Regulatory complexity
6.35A theme of submissions to this inquiry was how to balance a thorough and robust regulatory system–with the consequent benefit of safe and trusted products–with regulation compliance costs. The Committee heard how the impact of regulatory complexity and a related lack of harmonisation across jurisdictions affected food and beverage manufacturers.
6.36The Australian Institute of Food Science and Technology pointed out that the Australian regulatory system involves 10 governments, and various Departments and Agencies at Federal and state levels which regulate the large and complex food environment from paddock to plate. The burden is placed on businesses to align with the different expectations and institutional arrangements.
6.37Mrs Stephanie Saliba, Director, Corporate and Government Affairs, Japan and New Zealand, Mondelez International suggested Australia’s regulatory system be streamlined:
Regulatory complexity … poses a significant burden. While high food safety standards are crucial, the complex regulatory environment increases compliance costs and operational challenges. The importance of streamlining these regulations and embracing enabling technologies cannot be overstated, and it is essential to fostering a more competitive industry.
6.38The age of the regulatory structure may also have an impact, with the Australian Food and Grocery Council stating in its report Sustaining Australia: Food and Grocery Manufacturing 2030:
[A] factor impacting the sector is an aging regulatory structure that is no longer fit for purpose. Australia’s food regulatory system has not had a major overhaul for 20 years. It is no longer effectively delivering on its core objectives, whilst imposing greater costs on the sector and inhibiting consumer lead innovation.
6.39The Australian Food & Grocery Council also submitted that there was poor coordination between jurisdictions in relation to regulation implementation:
Poor coordination of regulatory requirements places an additional burden on the food sector. There is often little attempt across government to coordinate the timing of implementation of regulatory change to minimise the costs on the sector.
6.40Complexity challenges are a particular issue for start-ups and small to medium-sized enterprises. These businesses, particularly in new and emerging industries, often lack experience, expertise and awareness of regulatory requirements. Submitters pointed out the importance of businesses having access to professionals with the skills to manage and understand food safety and regulatory systems. CSIRO, in its discussion of future workforce and skills needs, specifically identified skills ‘associated with managing food safety issues and understanding regulatory systems’ as a skill needed for success.
6.41Submitters to the inquiry called for concerted action to address the complexities of the food regulatory system. CSIRO highlighted how the current fragmented and complex system impedes decision making and cooperation across the supply chain. CSIRO calls for the introduction of a centralised national body to coordinate and research policy related to food systems; providing harmonisation and simplification of regulatory requirements which would reduce costs and support the growth of industry.
6.42The need for clarity was also recognised by the Food Minister’s Meeting, which endorsed its Aspirations – Our vision for Australia and New Zealand’s food regulatory system document in July 2023. This document sets out the need for improvements, including:
- a more responsive system
- clearer and consistent food regulation
- a more effective system to proactively communicate advice to stakeholders, including understanding of the regulatory system for industry and consumers as well as awareness of the responsibilities of key bodies in food safety.
In its submission to the inquiry, Accord Australasia Limited included an infographic which illustrated the elements and benefits of fit-for-purpose regulation for the food and beverage manufacturing sector, as below.
Source: Accord Australasia Limited, Submission 95, p. 5.
6.44The Food Regulation Standing Committee undertook research on food regulation consistency, identifying areas of inconsistency in Australia’s food regulatory approaches with the purpose of identifying priority areas for reform. The resulting report in February 2021 found that while stakeholders considered that national regulatory requirements were mostly consistent with regards to food safety outcomes, stakeholders considered there were inconsistencies in how certain requirements under the food safety standards are implemented across Australia. A key identified area of inconsistency was the application and enforcement of food composition and food labelling standards.
6.45Mr Jim Dodds, Chief Executive Officer, Safe Food Production Queensland outlined a need for better collaboration with industrystating, ‘I think that a bit more of the collaboration with industry is probably the big thing, creating a pathway for that to occur.’
6.46Collaboration across organisations would better support innovative food and beverage manufacturing. Mr Brian Witherspoon, Director, Policy and Engagement, Safe Food Production Queensland said:
…the challenges we face at the moment are that industry is innovating and evolving at a very rapid rate. In our systems, both the food reg system and more broadly across government are not set up for that rapid change which is required. We need to start to look at a different way across government that breaks down the silos and looks at the food system as a whole and not as individual components.
Organics
Regulation of organic products
6.47Submitters from Australia’s organic food and beverage manufacturing sector raised concerns around the lack of regulation for organic food and beverages. This centres on the use of the term ‘organic’ and the impact on market access and consumer understanding of organic products.
6.48The term organic food refers to food produced with ingredients that have been farmed without the use of synthetic chemicals or genetically modified components. Organic farming processes are considered to be more sustainable and better for the environment. Although organic foods are not necessarily completely chemical free, they have significantly lower pesticide residues than other products.
Regulation of the term ‘organic’
6.49Australia does not have a regulatory framework for using the word ‘organic’, and no requirement for products sold in Australia to be certified as organic. Australian Organic Limited highlighted to the Committee that Australia is the only OECD (Organisation for Economic Cooperation and Development) nation without a regulatory framework. Ms Nicole Ford, Chief Executive, Australian Organic Limited (AOL) emphasised that this limitation creates confusion for consumers and allows deceptive labelling of organic products on the Australian market.
6.50The ACCC highlights the requirements of organic claims on its website; however, it makes it clear that it is not within the remit of the ACCC to resolve disputes regarding misleading organic claims. Requirements of organic claims as stated by the ACCC include:
- An organic claim is any claim that describes a product as organic, or the ingredients used to make a product as organic.
- Organic products intended for the Australian market don't need to meet a particular standard or be certified to be labelled ‘organic’.
- However, businesses that make an organic claim, such as through a claim of certification, must be able to prove the claim.
- Ms Ford criticises the ACCC’s definitions of the term ‘organic’ stating that:
If you look at the ACCC website, there are two definitions. One is for organic and one is for certified organic. But globally 'organic' means 'certified' in the OECD countries. The challenge we have here is that even if you have one ingredient or you have a very small percentage, you can still put organic on your packaging. There are some very large businesses and small businesses doing this. Because they're technically not doing anything wrong legally, they can still do this from a marketing perspective and get a premium when businesses like the people sitting here are paying for audits every year and are living against what's called an organic management program.
6.52Products labelled in Australia as organic are not necessarily 100 per cent organic, as consumers would expect. Submitters from the organic industry reported that ‘[i]n some cases, products have been found claiming to be organic with as little as 1 certified organic product in their ingredient list’. This problem can undermine the integrity of certified organic products.
6.53For Australian food and beverage manufacturing businesses to guarantee that their products are 100 per cent organic, businesses may pursue organic certification, which allows businesses to label products as ‘Certified Organic’ using certifier specific labels. This certification is overseen by DAFF approved certifying bodies, including:
- ACO (Australian Certified Organic) Certification Ltd
- Bio-Dynamic Research Institute
- National Association for Sustainable Agriculture Australia
- Organic Food Chain Pty Ltd
- Southern Cross Certified Australia Pty Ltd.
- Certifying bodies must be compliant with the National Standard for Organic and Bio-Dynamic Produce, which provides minimum requirements for products sold with organic labelling. Organic producers who export their products must have a certification in line with the Standard.
The benefit of organic labelling
6.55Organic products attract a higher price point than non-organic conventional foods. Consumers are willing to pay more as they believe that organic foods are healthier, better for the environment and more sustainable. Consumers are also attracted to the quality assurance provided by organic certification processes.
6.56The Committee heard that products with organic labelling, which are not organically certified in Australia or overseas, place the credentials of all organic products at risk. Products can be labelled organic with only a small proportion of organic materials. If consumers are misled into buying that product, believing it to be wholly organic, it risks undermining trust in all organic products.
6.57The Australian Organic Market Report 2023 noted that instances of misleading advertising or ‘greenwashing’ is increasing. The same report found that 33 per cent of organic shoppers purchased a product thinking it was organic based on packaging claims, only to find later it was not organic, and 31 per cent of organic shoppers considered trust in organic status as a barrier to purchasing organic products.
6.58AOL explained that the greenwashing of the term ‘organic’ has negatively impacted consumers as they have become distrustful of organic claims. Surveys have shown that:
- 90 per cent of consumers either agreed (37 per cent) or strongly agreed (53 per cent) that regulations and standards need to be followed to allow a product to be labelled organic
- 88 per cent of consumers either agreed (39 per cent) or strongly agreed (49 per cent) that having a certification logo to show an organic product has been independently verified would assist in making an informed purchasing decision.
- 87 per cent of consumers either agreed (37 per cent) or strongly agreed (50 per cent) that all organic products in Australia should have independent verification to show they are genuine.
- These findings show that a vast majority of Australian consumers want assurance that when they purchase a product claiming to be organic, which carries a premium in comparison to a conventional product, that the product has undergone a genuine certification process.
- Ms Nicole Ford, Chief Executive Officer of AOL, told the Committee that the current state of unregulated labelling has caused confusion amongst consumers:
[…] from a consumer perspective there's a lot of confusion and a lot of deceptive labelling that's in the market. There's also the issue where operators are at a disadvantage competitively from products simply claiming 'organic' versus those who are going through the process of audit, of certification on an annual basis. We are out of step globally with what's going on. For us as an industry sector, it's the greatest issue that we face in creating a very profitable, productive organic sector from an economic and a working environment perspective.
The need for better education
6.61The Committee heard that there is a need for better education around the use of the term ‘organic’ to provide consumers and manufacturers with a greater level of understanding of the distinction between products labelled as organic and those with certified organic labelling. While the organic industry does contribute to this work, at its own expense, reach is generally limited to consumers actively seeking information regarding organic products.
6.62Mrs Katrina Kehoe, Director, Kehoe’s Kitchen told the Committee that:
I think there needs to be more awareness. People don't understand the definition of organic. We used to produce just organic, but to keep our head above water when COVID happened, we had to produce conventional products as well. Nobody understands what that means. At every barbecue I go to, every function I go to, 'Well, what's conventional? What's organic?' There's no education in Australia. Because they don't know what certified means, then you have to explain certified.
6.63AOL also highlighted the need to provide greater education initiatives ‘focused on organic manufacturing and production to improve understanding among consumers and aspiring industry’. AOL also supported the report ‘Cost Benefit Analysis of a New Regulatory Approach for Domestic Organics’ commissioned by the Department of Agriculture, Water and the Environment, which discussed the option of the implementation of an education campaign to raise ‘awareness of the current non-regulatory framework for organic products across industry and consumers’.
International problems related to the lack of regulation
6.64Lack of domestic regulation of the organic industry directly affects businesses seeking to export to the international market. According to Ms Nicole Ford, Chief Executive Officer of AOL, Australia has a regulatory system that requires certification for the export market, but not for the domestic market:
There are five approved certification bodies to the department of agriculture. While it is mandatory for export to be certified, it's not mandatory in the domestic market for organic products to be certified organic.
6.65As Australia is the only OECD nation to not have a consistent regulatory framework for organic products, businesses face issues accessing foreign markets. AOL informed the Committee that the lack of regulation means that there is limited to no equivalency arrangements with key international markets. This means that businesses are required to obtain conformity assessments, which are often expensive and require further certifications to enable market access.
6.66Export markets are an important growth area for organic businesses, meaning any market access difficulties are a significant inhibition for Australian organic businesses. Mrs Katrina Hobbs, Managing Director, Inglewood Farms makes this clear by stating:
Export is probably a growth area for our business. There are a lot of hurdles for us. Not only are there hurdles for us now with biosecurity but also there are hurdles with regard to market access. Depending on where we're going, because of the lack of domestic equivalencies, we are having to get a US certification or a Japanese or a Korean. You're running around needing to satisfy a standard from another country.
6.67When seeking to export, organic growers and organic manufacturing businesses must deliver products to not only Australia’s certified organic standards, but also to the standards of any export markets. Mr Mark Shaw, Chief Executive Officer, ACO Certification Ltd outlined these difficulties:
… all of these major export markets regulate the use of the term organic—the United States, Japan, Korea, China, the European Union et cetera. For an Australian producer or processor to export, they need the certification to the Australian standard, which 99 per cent of operators do. But then they need separate certification for each of those export markets for market access. If you contrast that with a producer in the United States, for instance, the United States is a regulated market. They have equivalence arrangements with Europe and all the other major trading partners. Ben's equivalent in the United States would have one audit, one certification, which is the USDA's [United States Department of Agriculture] NOP [National Organic Program] certification. Whereas for Ben to run his business he needs four, five, six or however many export markets he's got—he needs to overlay that. There's a cost to that compliance. There's also a complexity to it, because whilst with these standards probably in the main 90 per cent of them are the same principles, every market has its own nuances.
6.68When products have multiple ingredients, including from different suppliers who have multiple farms, there has to be certification in line with foreign market requirements for every single element. This can often make it impossible for businesses to export their Australian certified organic products as organic. Mrs Katrina Kehoe stated:
The problems that you've discussed are compounded with my product because it's multiple ingredients. I've got up to 10 ingredients, 10 suppliers per batch, sometimes multiple because they come from multiple farms. In case there's a hailstorm and we can't get cabbage here, we have to buy it there. We've got lots of suppliers that we have to ask to get USDA certification, and it's just not possible. So we are exporting conventional products.
6.69Submitters from the organic industry made it clear that these difficulties could be directly addressed by Australia regulating its organic market. Submitters emphasised that they have been advocating for this regulation for decades.
Labelling
6.70Labelling is an important aspect of business for food and beverage manufacturers, as it is often the first and prime source of engagement between the brand and consumers.
6.71As with other standards, submitters raised how to best balance the benefits of clear and accurate product labelling with the compliance costs for manufacturers. The Committee heard that there can be a lack of harmonisation in labelling changes across jurisdictions and limitations on using digital labelling (QR codes) to display labelling requirements.
Lack of harmonisation in food labelling changes
6.72FSANZ oversees food labelling standards through the Food Standards Code. State and territory governments enforce these standards through state and territory-based legislation and through relevant agencies.
6.73Submitters told the Committee that the timing of labelling changes can cause problems for manufacturers. Multiple changes to labelling standards can occur at different times, potentially within short intervals. Compliance can be expensive if re‑design of packaging is required, particularly in products with long lead times for packaging orders.
6.74Labelling changes can be caused by different parts of the regulatory environment. Mrs Stephanie Saliba, Director, Corporate and Government Affairs, Japan and New Zealand, Mondelez International outlined:
Food labelling is an interesting space that has multiple different departments feeding into that. If I think back to about 10 years ago, we were going through country of origin labelling changes, and we moved through that process, but then the changes kept coming from multiple government departments. When I look at our international experiences, the frequency of labelling change in Australia is much higher than other markets. After we got through country of origin labelling changes, we moved on to plain English allergen labelling changes. […] We've got 700 different product lines across our portfolio, and each time we have to change essentially the stencil of a piece of packaging that costs $5,000 for each product. So, that's a $3.5 million cost to change. We were able to do the plain English allergen change with about a $2 million cost as we were trying to tag on that change to other changes to minimise cost. But as we were partway through that process, REDcycle collapsed, and then we had the need to start removing the REDcycle logo off our packaging. That's another change that needs to be enacted. Now, as we hear about health star ratings becoming mandatory and certain voices indicating that maybe the algorithm that sits behind that needs to change, it makes us nervous that we need to go through another packaging change. As I said, for us a full packaging change across our portfolio is $3.5 million. If you added that up for each food manufacturer across the country, it's millions of dollars that could be spent on investing in their facilities and businesses.
6.75Mr Geoff Parker, Chief Executive Officer, Australian Beverages Council Ltd called for increased co-ordination:
The plethora of different agencies getting involved in label changes, as an example, is one of the frustration points for the industry. A lot more coordination amongst the different government departments would certainly help in managing the large regulatory compliance cost.
6.76The container deposit schemes are run by states and territories, which also has an impact on packaging requirements. Mr George Kotses, Group Operations Manager, Bickford’s Australia said ‘...our MD had to sign five stat decs for container deposit schemes across Australia—five different systems and five different reporting structures.’ Mr Kotses also explained the cost impost of having current labelling stock for products that would not be used, pointing out that it has a bigger impact on smaller businesses.
6.77Australian Grape and Wine Incorporated submitted that ‘without acceptance of modern labelling alternatives such as QR codes for delivering mandatory labelling requirements, Australia will be left behind our competitors, incurring the high costs of multiple label runs.’
6.78Pernod Ricard Winemakers highlighted that when there are label changes, businesses are faced with multiple additional costs:
To implement label changes such as energy labelling, there is an initial cost per SKU [stock keeping unit] of changing the back label, additional costs to adjust labels between vintages for wine and write-off costs every year. This does not include the employee time to implement these changes.
6.79The Committee heard that FSANZ does undertake industry consultation before changing the labelling standards. Mr Matthew O’Mullane, General Manager, Risk Management and Intelligence, FSANZ commented on labelling issues:
We also have a number of significant industry committee groups that we meet with on a fairly regular basis, and they're certainly forthcoming with concerns around the cost of potential labelling changes. We do have a requirement under our act to undertake cost-benefit analysis and impacts on industry.
Digital food labelling
6.80Digital food labelling has been proposed as a solution to the challenges around food labelling requirement changes. Digital food labelling is not currently permitted under the Food Standards Code as a means of displaying labelling requirements.
6.81FSANZ has been undertaking research and engagement around the use of digital food labelling, releasing a summary reportFuture ready Food Standards: Digitisation in June 2024. The report summarises feedback received from stakeholders on the use of digital labelling, including:
- Balancing the benefits: Overcoming limited space on pack, packaging costs for industry and broadening consumer access.
- Purpose of digitalisation of on-pack information: Clarity needed regarding the problem to be addressed, the purpose of any change and the implications and benefits of that change.
- Presentation: Needs to be meaningful and useful for consumers and not limited in digital format to QR Codes (e.g. website addresses).
- Content: Low appetite for removing existing health and safety information from on-pack labels. Preference to use digital labelling to provide supplementary, complementary, discretionary or additional information.
- Other concerns: Inconsistent or inaccurate information between on and off pack, equity of access to information and digital literacy, privacy, tracking and cybersecurity.
- Although this work is ongoing, digital food labelling is not currently an available option. Submitters supported the introduction of digital food labelling, such as the use of QR codes to provide information to consumers without having to re-design packaging. Digital food labelling has several advantages, such as the capability to provide more detailed information on product aspects such as ingredients, nutrition, provenance and traceability as well as the manufacturers sustainability credentials.
- Ms Samantha Blake, Deputy Chief Executive Officer of the Australian Food and Grocery Council, told the Committee that the food and beverage manufacturing sector is ready to embrace technologies such as digital labelling and QR codes:
Digital labelling is going to be a mechanism that the industry can use to communicate directly with consumers and provide consumers further information. We've really had to see the confluence of a number of things coming together. First, the technology needed to be present. We now have technology through 2D barcoding. You may be familiar with the linear barcode, which actually turned 50 last week; we now have a QR code, which can have more information embedded on it. So the technology is now there. That includes the point-of-sale ability to scan a QR code to get the information that it needs. Secondly, consumers are now very au fait with using QR codes. We all learnt how to do that during COVID.
6.84Ms Blake also explained how the industry is working towards putting guidelines in place around what the 2D barcode should provide for consumers, to make sure that consumers are able to access similar information, no matter which product they select:
Some of the areas we're particularly focused on at the moment are around sustainability credentials and around getting more information on products and product ingredients—remembering, of course, that there is limited real estate on a pack and, particularly if it's a small pack, you can't get a lot of information on that pack. This opens up an avenue to provide consumers with more information so that they can make choices that will be appropriate for them.
6.85Additionally, Mr Scott McGrath, Director of Government and Media Relations at the Australian Food and Grocery Council, told the Committee that digital labelling is ‘an opportunity piece’:
While traceability might be important to some people, dietary requirements might be to someone else. So it's about making sure that there's basic infrastructure, but then there's potential for the market to run away with it in terms of what the consumers are after.
6.86Australian Grape & Wine Incorporated was supportive of the advantages of digital labels:
With digital labels we have the ability to better inform consumers about the products they purchase and how to enjoy them responsibly. QR Codes can be used to direct consumers to a digital label where they can find real time information on ingredients, nutrition, alcohol and health and local responsible drinking guidelines. Such labels have the ability to use geo-location technology so that information can be provided in the local language and tailored to the specific requirements of that market.
6.87Mrs Stephanie Saliba told the Committee that consumers are now ready for using digital labels:
Pre-COVID we thought it would be impossible for every consumer to have access to a mobile phone, but I think COVID showed us that most consumers did as they had to embrace QR codes, COVID certificates and the like. I think there's opportunity to look at digital labelling not just for compliance and safety information but to also meet consumers' needs that are emerging around them wanting to understand where do the particular ingredients come from in their product, where were they processed, how were they made and what's the country of origin of each ingredient.
Consumers are also starting to request information on the carbon impact of their product.
6.88Globally, some countries are already introducing the use of QR codes to display product information. According to spiritsEUROPE, the European representative body for producers of spirit drinks, consumers have become agile in using digital tools, and digital labels on food and drink products are growing quickly in popularity and use. It believes that in the coming years, more food and beverage products should feature QR codes that consumers can easily scan to obtain trustworthy product-related information and guidance, empowering them to make more informed choices.
6.89In its submission, spiritsEUROPE provided information on what has been done in the European Union (EU):
In the European Union, the European spirits sector, in cooperation with partners from the European wine sector – represented by the Comité Européen des Entreprises Vins (CEEV) – has commissioned and built a bespoke E-label Platform to allow the development of tailored e-labels in an easy, reliable and cost-efficient way. This Platform, named ‘U-label’, offers companies a stage upon which to provide EU consumers with full and multilingual product information accessible via a QR code. The U-label Platform allows the creation of e-labels with a few mouse clicks which are integrated onto spirits (and wine) labels. The moderate cost structure enables producers of all sizes, and SMEs in particular, to participate.
6.90Pernod Ricard Winemakers provided details of its ‘e-label’ initiative in its submission:
At Pernod Ricard, we are almost complete in rolling out our "e-label" on all our products with 89 per cent completion globally (85 per cent in Australia and New Zealand). As shown in the image below, our digital label aims to better inform consumers globally about the products they purchase and how to enjoy them responsibly. Every bottle will carry its own QR code on the back label by the end of 2024 … The label uses geo-location technology so the information provided is in the local language with locally appropriate information and links. Since Covid‑19, consumers have more experience using QR codes which are an efficient way to provide them with the information they are require about the products they purchase. We understand that more than nine out of ten Australians own a smartphone which ensures that Australians can access this information in the mostconvenient manner for them.

Source: Pernod Ricard Winemakers, Submission 48, p. 5.
6.91Pernod Ricard Winemakers argued that Australia is being left behind as other markets such as the European Union introduce QR codes as a tool for consumers. Australian Grape & Wine Incorporated considers that this inaction is to the detriment of Australian businesses, who continue to be faced with the high cost of replacing packaging.
Allergen information
6.92When the Committee asked about the biggest risks food and beverage manufacturers face from a safety perspective, Mr Jim Dodds, Chief Executive Officer of Safe Food Production Queensland, raised food content and allergens:
We've seen a lot of disruption. You've mentioned a number that have happened because of biosecurity risks and the like. There was also incredible disruption through the Ukrainian war and other things like that, which limited ingredients that were available to the individual businesses to actually match their recipes and then prove that their recipes were safe. […] Changing some of those components can actually change the allergy profile and a whole bunch of other components of that food. If you look at all of the food recalls from a food safety perspective over the last few years, they've predominantly been about allergens and the like rather than about failures of the microbiological or chemical side of the system.
6.93In their submission, Dr Robyn Stephenson wrote about their difficulties in navigating through food labels:
I get eczema if I eat foods with acid-modified starches in them. If I read an ingredients list and it has ‘acid-modified starch’ in it, such as Thickener 1422, I put it back on the shelf. Easy done. But many times, these starches are hidden. Some starches are even labelled as ‘organic tapioca starch’ when they are in fact acid-modified starches! The ‘organic’ part pretty well flies out the window, there. So it can make my shopping experience very daunting, given we have other food allergies and intolerances in our family. Luckily I am savvy, and I ask questions, so I figure things out. But not without finding problems beforehand. The problem is, it shouldn’t have to be this way.
Committee comment
FSANZ
6.94Australia’s food and beverage regulatory environment is a complex system operating across multiple jurisdictions. The Committee considers that while the overall system works well in supporting Australia’s reputation for producing safe and quality products, there is room for improvement in making regulation more consistent, flexible, agile and timely.
6.95Given the timing of this report and the imminent finalisation of the review of the Food Standards Australia New Zealand Act 1991, the Committee does not make any specific recommendations on setting or implementing food standards. The Food Ministers’ Meeting has acknowledged that systemic improvements are needed to better support the function of Australia’s food regulation.
Organic certification
6.96The Committee concurs with Australian organic industry submitters who provided evidence to the Committee on the issues around the use of the word ‘organic’ on product labelling. Australia is out of step with its international partners in not requiring products sold as organic to be certified organic domestically, and this is causing difficulties for businesses exporting their products.
6.97Australia’s lack of requirement for products sold as ‘organic’ to undergo certification is also a disservice to Australian consumers. Food regulation is intended to protect consumers and provide information to make informed choices when purchasing products. Unclear regulation around the term ‘organic’ undermines both of these aims.
6.98The Committee therefore supports regulatory changes to require products sold as organic to be certified in line with international standards.
6.99The Committee recommends that the Australian Government, in consultation with industry stakeholders, implement a program of certification for the domestic organic food market, and amend the Australian Competition & Consumer Commission’s definition of the term ‘organic’ to mean ‘certified organic’.
Labelling
6.100Food labels provide consumers with enough information to allow them to make an informed choice on the food or beverage that they are buying. Food labels also help to protect public health and safety by displaying information such as best before and use by dates, ingredients, certain allergens, instructions for storage and preparation, and any relevant advisory or warning statements.
6.101The Committee heard from many stakeholders about the frustrations felt by businesses when new labelling requirements were introduced across jurisdictions not in unison. This was difficult for SMEs that operated across multiple jurisdictions, as these businesses incurred additional costs to comply with different labelling requirements.
6.102The Committee considers that the Australian Government must do more regarding food and beverage labelling harmonisation. Labelling changes have significant impacts on businesses and can act as a barrier to new products and innovation.
6.103The Committee was interested in digital labelling as a solution for labelling requirements. Digital labelling would allow businesses to comply with labelling requirements cheaply and quickly without having to continually redesign packaging and encourages its adoption in consultation with industry and consumer groups.
6.104The Committee recommends that the Australian Government coordinate with state/territory and local governments on changeover dates and timelines when introducing new labelling requirements.
6.105The Committee recommends that the Australian Government support digitisation and innovation opportunities for labelling, such as the implementation of QR codes, to provide additional information to consumers.