This chapter provides an overview of some of the key certification
schemes and what food certification means. Specific issues identified over the
course of this inquiry are examined in the next chapter.
Third party certification is a mechanism business owners employ to
promote particular product attributes to consumers. Certifiers licence their
logo or trademark to businesses that meet given standards, thereby confirming
that products bearing the mark possess the marketed attributes. These can
include qualities such as:
nutrition (e.g. National Heart Foundation tick of approval)
product origin (e.g. 'Australian Made Australian Grown')
environmental sustainability (e.g. dolphin-friendly tuna)
animal welfare (e.g. RSPCA approved)
compatibility with religious belief systems (e.g. halal, kosher)
dietary choice (e.g. organic)
ethical sourcing (e.g. fair trade)
The benefits of certification
Certification confirms that a required standard has been met, and is
commonly used to identify organic, gluten free, halal, or kosher food products.
For certification to be effective a standard must be clear, information about
the standard should be easily accessible, and consumers must have confidence in
the credibility and integrity of the certification system.
The value of certification to food producers and retailers is to allow
them to differentiate their product in the market:
The value to the manufacturer or brand owner lies in the fact
that a trusted and independent entity is confirming that the product has the
claimed characteristic, and the value to the certifier lies in enhanced
reputation as a trusted expert and in the certification fees paid.
Market forces play a significant role in the success of a certification
scheme. When consumers do not trust a certifying body, it offers little value
to the manufacturer or retailer, and the commercial relationship is likely to
Certification may also be valuable for food manufacturers and retailers in other
less direct ways:
It may be an entry cost of doing business with a particular
customer or retailer, or to gain access to a particular market – for example,
halal certification allows entry into Middle East and South East Asian markets;
It opens the opportunity for incremental business opportunities
(e.g. selling to food service as well as retail), leading to better
productivity and higher factory utilisation;
It can fulfil corporate charter requirements and ‘good corporate
citizen’ measures; and
It acts as a compliance measure for claim substantiation (i.e.
the product label claim might be ‘organic’ which is then substantiated by way
of a third party organic certification).
Certification is therefore 'both a marketing tool and a quality
The importance of export market access
Australia is a mature food market in which consumption is rising
modestly in line with population growth. By contrast, overseas food markets,
such as the Middle East and much of Asia, are expanding as the number of middle
class consumers grows.
At present, approximately two thirds of Australian food is produced for
export. Our food exports were worth approximately $37
billion in 2014 alone.
Certification provides Australian food exporters with access to lucrative
Food certification is expanding rapidly worldwide—in 2013, the value of
the global certification market was estimated at US$10 billion, roughly 1.4 per
cent of the total value of the global food and agricultural industry, and it is
projected to grow at more than five per cent annually to 2019.
The value of halal certification alone is substantial:
The global halal market is robust and dynamic market. One of
its most outstanding features of halal certification is that it can capture and
is intended to capture both this market as well as others that do not
characterise themselves as halal markets. Halal certification is an effective
and sought after instrument that enables companies to expand the scope of their
customers worldwide. Arguably no other instrument has the capacity to do so
than halal because essentially it removes barriers of entry to markets.
Australia would be at a considerable disadvantage to do anything to undermine
halal or its utilisation by Australian business. Using the halal certification
label can bring about a massive expansion of both halal and non-halal exports
and result in significant improvements in Australia’s terms of trade if in fact
it has not already done so.
It is estimated that there are 1.6 billion consumers in the halal market
worldwide, making it one of the biggest food markets in the world:
According to research commissioned by the Dubai Chamber of
Commerce the halal food industry was worth US$1.1 trillion dollars in 2013. It
estimates that the global share of the food and beverages market accounted for
16.6 percent. The UAE halal food market alone (dominated by unpackaged red meat
at 78.7 per cent) was valued at $20 billion dollars in 2013. The outlook is
even more impressive. The global halal food market is expected to be worth 1.6
trillion dollars in 2018, growing at a compound growth rate of 6.9 percent.
There are also higher estimates which claim that the halal market was worth
US$2 trillion dollars 2008, when halal food is combined non-food halal products
(i.e. cosmetics & pharmaceutical products etc.). What this shows is that
the halal market is one of the fastest growing and lucrative food markets in
The Australian red meat export sector was worth $1.4 billion in 2013–14.
Halal certification is required for exports to Indonesia, Malaysia, Iran, Iraq,
the United Arab Emirates, Jordan, Kuwait, Bahrain, Brunei, Oman, Qatar, Saudi
Arabia and Egypt. These are significant markets for the meat industry
and third party certification is instrumental in providing exporters access to
Were we unable to offer Australian Government assured halal
certification to our Muslim and other trading partners, access for our red meat
exports to these markets would be limited and potentially denied, with a corresponding deleterious effect on the Australian
red meat export industry. Likewise, if other food businesses did not have
access to commercial halal certification services this would limit their
ability to access a large and growing pool of Muslim consumers, many of whom
reside in rapidly growing economies within our region.
Kosher certification presents comparatively fewer economic advantages,
but is 'useful for exporting to Israel and the United States.' Opportunities also exist in organic food
certification, with Australia's organic food exports valued at over $228 million
Various food certification schemes are subject to a complex interplay of
regulatory standards which balance food safety with the varied requirements of
our export markets. The Department of Industry and Science (DIS) explained:
The institutional structures and administration of
Australia's food industry regulation are complex due to the devolved nature of
many activities and the need to balance production and consumer marketing
aspects of food with food safety and export requirements.
Food safety is important to consumers, industry and the government:
In Australia, and indeed most modern economies, food safety
is assured to the extent possible through processes of hazard identification,
and control point identification for risk minimisation and mitigation.
Although it is not common practice for quality and safety system
accreditations to appear on food labels, significant work is being done to
standardise food safety audits:
Safety audits are undertaken for regulatory compliance, as a
result of manufacturer requirements or to satisfy retailer requirements, and at
present there is relatively little recognition by one stakeholder of safety audits
undertaken for another, even though the safety audit can be standardised
against internationally accepted protocols. This creates the circumstance where
a company might undergo 10 to 15 different safety audits in a year, all looking
at the same things. This duplication places a burden on auditors and on the
audit process where standardisation and recognition could drive better outcomes
for consumers and for industry.
The Department of Agriculture has an important role in regulating the
certification of goods for export, which 'provides recognisable economic
benefit to Australia’s agricultural industries and assists against the threat
of market failure.' In the case of halal certified foods, the
department's role is limited only to the halal certification of red
meat—certification of other goods is on a purely commercial basis.
Manufacturers and brand owners are not always required by law to certify
products destined for the domestic market, nor do regulations prevent claims
being made about products which are not certified. As put by the Australian Food and Grocery
Council, '[c]ertifications are rather discretionary marketing activities of the
manufacturer or brand owner.'
The section below explores how consumer interests are protected.
Consumer protection—certification trademarks
The consumer protection provisions contained in Schedule 2 of the Competition
and Consumer Act 2010 (Australian Consumer Law) apply to all commercial
activity in Australia, including all certification schemes. Under the Australian
A person must not, in trade or commerce, engage in conduct
that is misleading or deceptive or is likely to mislead or deceive.
The Australian Food and Grocery Council elaborated on this:
it is unlawful to make a representation that is misleading or
deceptive or likely to mislead or deceive, including by way of a certification;
it is both unlawful and a criminal offence to make a false or
misleading representation that a product has a history or characteristic that
it does not have, including by way of a certification; and
it is both unlawful and a criminal offence to represent that a
product has a sponsorship or approval that it does not have.
Although the Act provides a considerable degree of consumer protection
regarding the validity of certifications, the type of trademark/logo a
certification body operates under impacts considerably on the resultant level
of consumer protection.
The Trade Marks Act 1995 distinguishes between types of trademarks:
A special class of trade marks has been created in Australia,
called a certification trade mark (CTM). CTMs differ from other registered
trademarks in that they require a set of public rules which must be met in
order for that manufacturer to be able to display the CTM.
CTMs are lodged and processed by IP Australia, and must be approved by
the Australian Competition and Consumer Commission (ACCC) before they can be
registered under the Trade Marks Act. Dr Richard Chadwick, General
Manager of the Adjudication Branch of the ACCC explained Australia’s trademark
system during the inquiry:
Certification trademarks are a type of trademark, so they
lodge an application with IP Australia, and IP Australia does its usual kind of
review of the trademark. And then, if they are seeking a certification
trademark, IP Australia sends the application and the rules across to us. As Mr
Gregson said, there are really two types of things we look at. Under the Trade
Marks Act, there is a set of requirements effectively that the rules have to
specify the attributes of the person doing the assessment; the rules that are
being assessed, so the standard; and how they are being assessed. There are
also requirements that there are dispute resolution systems. So, if you like,
the certification process has to have certain elements. And then the commission
also has a broader assessment process, which is really deciding whether or not
the trademark and the rules are consistent with the principles of consumer
protection and competition.
Certification trademarks indicate that a product is of a particular
quality, manufactured in a particular way or according to a particular process
and that the advertised standard is assessed and monitored for compliance
regularly. The Heart Foundation Tick is a well-known and easily recognised
Consumers can be confident that products certified by a company with a
certification trademark comply with the sought-after standard or value:
[CTMs] might be said to be more transparent to consumers due
to the public nature of the requirements and processes involved in the
certification. However, operating a CTM is a more expensive exercise for
certifiers, costs which are ultimately borne by the certified manufacturers
There is no requirement for a logo or a trademark to be a registered
certification trademark. Certification authorities may 'seek protection of
their intellectual property through other mechanisms' or not seek protection at
Certification bodies which do not have registered certification
trademarks are by law only prohibited from misleading conduct, penalties for
which range from '$200 000 for individuals and $1.1 million for
companies.' They are not required to operate to a
The organic market is the fastest growing agricultural industry in
Australia, currently valued at $1.72 billion.
The term "organic" is not regulated for the domestic
industry relies on self-regulation, consumer awareness and respect:
Responsibility for action taken on misuse of the term organic
and certified organic therefore falls on the certification industry, working in
concert where relevant with the ACCC and fair trade agencies. Ultimately this
is a market driven and supported production system attribution claim which
requires vigilance from consumers in looking for, and buying, certified organic
products under a recognised logo.
Conversely, organic food bound for export is subject to strict controls.
Certification is carried out by one of six organic certification bodies administered
by the Department of Agriculture:
The Department of Agriculture is considered the competent
authority, and conducts annual audits to verify that all organic certification
issued by these bodies is in accordance with the requirements of the National
Standards for Organic and Biodynamic Produce.
A representative of the department explained its role:
I think the easiest way to explain something that is very
complicated is in a simple framework. Essentially my division operates under
and administers the Export Control Act. Within the Export Control Act, we will
have a range of prescribed goods and, clearly, one of those prescribed goods
areas is meat and meat products. Within our regulatory philosophy, what we are
seeking to do is, to the minimalist extent possible, meet importing country
requirements. So depending on what the aspect of the commodity is, depending on
the markets it is going to, it enables us then to use various ranges of
instruments to have the lightest possible touch into those markets. Probably
one of the lightest touch regulatory models we have is organic. You would have
observed that we actually facilitate industry in as a devolved way as possible
the administration of that program. You would have heard that we gain the
assurances for the certificates that are issued on our behalf through some
verification audits over those certifiers.
Each of the six certifiers is required to comply with strict criteria,
and must provide information regarding fee structures and service provision.
Certifiers must simultaneously meet strict regulatory standards applied by the
European Union, Taiwan and Japan 'in order to accredit product for export to
these regions, under equivalency arrangements.'
A number of Australian organic certifiers also hold direct accreditation
with foreign governments, for example the United States Department of
Agriculture National Organic Program, which enables them to certify products
for export bound for those countries. Their accreditation with overseas
governments means they meet other nations' legislative and audit requirements.
In their submission to the inquiry, the Department of Foreign Affairs
and Trade state third party certification is critical to the continued growth
of Australia's organics industry:
Although Australia’s total percentage share of the global
organic food market is only 2.3 per cent, the forecast compound annual growth
rate of the Australian industry for 2014-2016 is 12.5 per cent, more than
double that of the global industry of 5.9 per cent. This growth potential will
benefit from continued robust third party certification for organics, which in
turn should continue to support national and international consumer confidence
in Australian organic produce and ensure that we maintain access to key
Genetically modified food
Only two genetically modified (GM) crops, canola and cotton, are grown
GM food is regulated under standard 1.5.2 of the Food Standards Code. The food standard permits up to 0.9 per cent of
genetically modified material in food products. Products containing higher
levels are required to be labelled as "genetically modified". A
submission from GMO ID Australia states that no routine testing is conducted on
Certification is available for non-genetically modified food products:
Non GM certification is a non-religious standard and was
established to inform customers/consumers about a product/ingredient that
current labelling legislation does not adequately cover. Many consumers are
concerned about genetic manipulation of different crops, by products and
There are two primary forms of religious based certification carried out
in Australia—kosher for the Jewish market, and halal for the Muslim market.
Both halal and kosher certification bodies adhere to specific requirements in
relation to how meat is to be slaughtered, which ingredients are permissible and
how cross-contamination of products is to be avoided. Submissions received from
the Halal Certification Authority Australia (HCAA) and the Executive Council of
Australian Jewry (ECAJ) confirmed that non-meat products sold as halal or
kosher are not blessed or religiously altered in any way.
Specific issues of concern to submitters are examined in the next
chapter. The sections below outline what kosher and halal certification entails
and how certification operates in Australia.
ECAJ defined the word "kosher" as "proper" or
"fit for use":
It describes the acceptable status of food products in
accordance with the Biblically-based dietary laws of the Jewish faith. These
laws are extremely intricate, taking up many volumes of ancient and modern
scholarly texts and teachings. Reliable and acceptable endorsement of items as
kosher requires considerable scholarly and technical knowledge and expertise.
The committee was provided an outline of the multifaceted rules and
traditions which comprise Jewish religious dietary laws:
Further, the “kosher” animal must be killed for consumption by
specially trained and religiously observant Jewish personnel in a procedure
conforming to strict rules that ensure a swift, clean kill.
Poultry is similarly categorised into acceptable and
non-acceptable species, based on a Biblical listing. Chicken and turkey are
acceptable species. Wild duck and all carnivorous birds of prey are not. The
acceptable poultry must be prepared for consumption under similarly strict
regulations governing killing and processing.
Kosher meat certification rules are not just confined to the meat
itself but also govern the acceptability, or otherwise, of the use of everything
derived from the animal/meat or otherwise of animal/meat origin. This includes
animal-based food products such as tallow-based fats and margarines, and also
less obvious animal-derived products such as processing aids like gelatine,
emulsifiers and rennet.
The addition of any non-kosher animal or animal-derived products
into other products also renders the final product as non-kosher.
Kosher laws define the acceptability or otherwise of fish and
seafood. Only fish and sea-food possessing defined scales and fins are
permitted according to Biblical law. This excludes octopus, shark and whales
and all shell-fish and crustaceans such as oysters and crabs and their
The mixing of meat and dairy products or their respective
derivatives, is prohibited by Biblical law.
There are also regulations regarding the acceptability of
consumption of various fruit and vegetables, again based on specific Biblical
Production of kosher items in equipment that was previously used
for non-kosher products also renders the otherwise kosher product non-kosher –
unless the equipment first undergoes a specific “cleansing” process to remove
any trace of the previous non-kosher “contamination”.
The committee noted that declaring food to be "kosher" merely
entails an expert assessment of the way the food was produced and the
ingredients it contains. The food is not subject to any religious ritual,
change or blessing.
Overall, the market for kosher food in Australia is small, estimated by
ECAJ to be about 30 000 people. There are others who seek kosher food on some
occasions, for a range of reasons.
Two kosher certification authorities—the New South Wales Kashrut
Authority (NSWKA) and Kosher Australia (KAVIC)—are the principal certification
authorities in NSW and Victoria respectively, and provide over 90 per cent of
kosher certification services in Australia. The Kashrut Authority of Western
Australia (KAWA) is the only kosher certification authority in WA, and no
certification authorities operate in Queensland, South Australia, Tasmania or
the Australian Capital Territory, reflecting the distribution of Australia's
Jewish population. In states without certification authorities, the local
Jewish communities rely on kosher supervision undertaken by the local rabbis,
and will often source specialised kosher products from NSW and Victoria.
Certifiers examine and certify individual products, but they also
certify food businesses such as bakeries, restaurants and caterers. Almost all
kosher animal slaughter in Australia is carried out in NSW and Victoria.
The Halal Certification Authority Australia (HCAA) defined the word
"halal" as 'permitted, allowed, authorised, approved, sanctioned,
lawful, legal, legitimate or licit.' In the context of food "halal"
denotes goods that are fit for consumption by Muslims.
Conversely, foods which are not fit for consumption by Muslims are known
as "haram"; that is, 'not permitted, unauthorised, unapproved,
unsanctioned, unlawful, illegal, illegitimate or illicit'. Products are "haram" if they contain
or come into contact with:
Animals not slaughtered according to Islamic requirements.
Carnivores, omnivores, pigs, dogs or donkeys.
Animals which died by strangulation, a blow to the head, headlong
falls, natural causes, or were killed by another animal.
Animals with protruding canine teeth, e.g. cats and monkeys.
Amphibious animals, e.g. frogs and crocodiles.
Insects such as flies, worms and cockroaches.
Birds of prey with talons, including owls and eagles.
Alcohol, harmful substances – any poisonous or intoxicating
plants or drinks.
Blood, urine and faeces.
Mr Abdul Ayan, an international halal consultant based in Melbourne,
provided a useful explanation of what is meant by "halal" in the contemporary
In Islam, halal is conceived as a universal principle,
because it is based on permissibility. Some people refer to it as the principle
of permissibility. It means that God’s bounty is almost unlimited and that He
has made everything halal except a few actions and products that are specified.
The concept of halal is not unfamiliar to Judaism albeit under a different but
equivalent term - Kosher. The same I understand is true of Christianity
although it is no longer extant. There is one basic truth about halal food; it
is overwhelmingly about products that Humanity (Muslims and non-Muslims)
consumes every day. Halal therefore is not peculiar to Muslims even if the term
may make it seem as if it is. What is peculiar to Muslims (& Jews) is that
they do not consume products like pork etc. To say that a particular food is
halal is to say that Islam places no barriers on consuming it. That in fact is
the fundamental definition of halal: that everything is halal except ‘A, B, C’
(a small number of specified products such as pork that are prohibited). The
purpose of halal certification is not in fact about halal itself, but about
validating the absence of haram in the composition of the products that are
sold or offered for consumption. What must be pointed out is that there should
be no objection to halal at all, because to do so is to object to the very
products that we all consume on a daily basis including water, bread, fruit
vegetables and rice etc.
HCAA described a halal certificate as a 'document attesting to facts',
explaining that it is directly based on Koranic requirement.
Mr Abdul Ayan offered the following description of how certification
There are many types of halal certification labels on
products. Halal certification of raw meat is different from packaged and
bottled products. Halal meat is required to have two consecutive
certifications. The first is the certification of carcass by way of a stamp on
carcass (for ex. VIC MS stamp in Victoria & similar ones for other states)
and the other is by way of a certificate of authentication or validation which
accompanies the product to its export destination or sales outlet. These are
mandatory official certificates. One relates to in-house processes, the other outward
validation. There is another certificate called an Interim/Transfer certificate
which accompanies the movement of the product in transportation and storage.
This however is not an official stamp but one intended for internal management
by halal certifiers (to insure that the integrity of the halal product is not
Detailed information on organisations authorised to certify non-meat
products in Australia is not readily available, was not supplied by any
submitters, and could not be found by the committee.
Genetically modified food
The genetic make-up of food has been manipulated through traditional
cross-breeding of plants and animals for generations. Today science allows us
to make copies of particular genes from the cells of an animal or plant and
insert these copies into the cells of another organism to produce a particular
characteristic. The resultant organisms are referred to as genetically modified
Most of the GM foods produced so far are GM plants, for
example corn plants with a gene that makes them resistant to insect attack, or
soybeans with a modified fatty acid content that makes the oil better suited
for frying. Plants that use less water to grow have also been developed so they
are more suitable for changing climatic conditions.
GM foods are regulated under Standard 1.5.2 of the Food Standards Code
and subject to mandatory pre-market approval and labelling requirements.
The cost of certification
Certification services are provided by a range of organisations for a
fee. There is no common fee structure—operator's fees are individually
structured and depend on the nature of the certification provided. Costs to
businesses seeking certification could include:
Changing operations, reformulating products or modifying
ingredient sourcing in order to qualify for certification;
Compliance costs such as certifier visits to facilities, auditing
of processes, supply chain and ingredients; and
Labelling costs where a logo is to be included in packaging.
To survive in a highly concentrated food market domestically and abroad,
manufacturers and brand owners have to be price competitive. The net financial
effect of certification therefore has to be beneficial or certification would
not be sought.
The committee sought clarity on fees charged by various certification
bodies. It is noted that while some certification authorities were more
transparent and forthcoming than others in the information they provided, there
is no legislative requirement for fee structures to be made public.
Australian Organic Ltd informed the committee that its certification
programs cater for both small and large businesses, charging fees 'starting
from $495 per annum for small scale farm operators and capped at less than $5,000
(ex GST) for the largest operations (farm and processing/handling)'. Those costs are estimated to represent at most
less than 1 per cent of the wholesale cost of certified organic products:
ACO [Australian Certified Organic] maintains its charging structure
to assist smaller to medium enterprises as they develop, while also ensuring
that financially it is not beholden to any large or singular commercial
interests, by maintaining capped and low charges.
The committee understands that proceeds from organic certification are
'channelled back into assisting in regulating, testing, spot inspections,
market access and trade and consumer education.'
The price to certify food products as ‘non-genetically modified’ is
based on the perceived "risk" of a product or ingredient being
genetically modified. Fees may vary from $1200 per annum for a
"low risk" product like Tasmanian honey, to as much as $13 000 for
Manuka honey produced in Turkey, or corn grown in the United States. Fees include
auditing, certification and registration with CERT ID, Europe.
Although the committee received a considerable number of submissions, a
number of concerns were identified. These are set out and addressed in the next
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