Chapter 3
General meat labelling issues
3.1
Aside from the beef labelling issues discussed in Chapter Two, two other
specific issues addressing labelling claims applying to various types of meat
were raised during the inquiry. Firstly, there was concern that labelling
claims about ethical animal treatment were being misused to the detriment of
legitimate operators. The committee heard that the absence of enforceable definitions
covering descriptors such as 'organic' and free range' allowed companies to
make misleading claims about their animal welfare practices.
3.2
Secondly, some organisations expressed concern about misleading place of
origination claims. These issues are addressed in the later part of this
chapter.
'Free range', 'organic' and similar marketing terms
3.3
The committee heard a number of complaints about the misuse of ethical
animal treatment claims in meat labelling. In evidence, RSPCA indicated that
consumers are increasingly likely to consider food production systems when making
consumer decisions about food. The increasing presence of labels such as 'free
range' and 'organic' attached to food products reflects this interest and
companies' desire to cater for consumers' ethical preferences.[1]
However, according to RSPCA specific claims about superior animal welfare
compared with other producers may or may not be accurate because of ambiguity
and inconsistency relating to the use of these terms. Their submission stated:
Generally speaking, people tend to assume that the term “free
range” indicates that animals have had some access to outdoors and are not kept
in close confinement. What is meant by “access to outdoors” and “close
confinement” is also often undefined and poorly understood.
In the absence of any recognised definitions for such terms
as “free range”, “bred free range”, “organic”, “biodynamic”, etc. to describe
welfare-oriented production methods whether it is for red meat, eggs, chicken
meat or pork, the public tend to assume that these terms confer some improvement
in animal welfare over other production systems. This may or may not be the
case and will be greatly influenced by the standards applied and the way in
which the system is managed.[2]
3.4
Being open to interpretation allows producers to use these terms 'as
they see fit'.[3]
3.5
Animals Australia argued that instances of the misleading use of
descriptors such as 'free range' and 'organic' to extract a price premium means
that consumers are willing to pay more for products derived from improved
animal welfare practices.[4]
They were concerned that misuse of welfare-related descriptors threatens the
viability of genuinely ethical producers:
The absence of nationally applicable and legally enforceable
terms which define the animal welfare status of meat products impairs the ability
of consumers to make these informed choices. Of course, it also leaves the
genuine cruelty-free producers, the free-range producers and others open to
unfair competition by people who claim that their product is welfare friendly
or imply that or mislead people to believe that.[5]
3.6
The committee was told that it is important for genuine ethical
producers to receive a fair return on their welfare practices, necessitating a
more rigorous approach to regulating these types of descriptors:
It is only fair that producers which seek to improve animal
welfare by moving away from intensive animal farming methods should be able to
get a fair return for any increased costs involved in that move. Animal welfare
labelling is a necessary first step. Clear labelling to indicate the housing
system and husbandry methods used is required to enable consumers to make an
informed choice on their product purchases and to ensure that producers of
animal welfare friendly products get any price premium benefit associated with
the change.
For this to work, it is necessary that the improvements in
animal welfare be based on properly assessed and monitored standards (and this
must be done by an independent body).[6]
3.7
Free Range Pork Farmers Association told the committee that their members'
viability is threatened by the unscrupulous practices of those who mislabel
their products free range:
Commonly, the free range producer is a small family affair
earning a living from the land. They fill a niche market, one that is now sadly
open to exploitation by some within the pork industry ready to take advantage
of the lack of truth in labelling laws and no recognised definition for free
range.
These family farms are now finding that they are in
competition with under priced, deceptively labelled pork that has the potential
to put them out of business. These currently viable free range operations are
at the mercy of unscrupulous operators marketing their pork as free range when,
by accepted understanding of the term, they are not.[7]
3.8
The food labelling requirements of the Australia New Zealand Food
Standards Code do not require meat producers to specify production methods,
unlike the requirement to include facts such as ingredients and nutritional
information on labels.
3.9
The certification of 'organic' foods occurs via a voluntary and somewhat
disparate process subject to government oversight only in the case of exports.
DAFF explained the current arrangements to the committee as follows:
Currently, domestically, organic labelling is a voluntary
system. It is driven by accreditation agencies within the country that
essentially accredit products to be labelled as organic. There are a number of
private accreditation agencies that are not subject to government regulation at
all, except of course the overarching requirements of the Trade Practices Act
to ensure that a product is not misleading or deceptive to consumers.
Domestically, that is the current situation within Australia. However, in the
context of exports, there is a standard against which AQIS certifies a product
to be organic before it is exported, and that satisfies the requirements of our
international markets.[8]
3.10
When queried as to why the same standards do not apply to domestic
product labelling, DAFF stated: 'At this point in time we are looking at a
voluntary national standard that is under development by the organic industry'.[9]
3.11
Restrictions on the use of the phrase 'free range' are currently limited
to egg carton labelling. Only eggs laid by chickens with shed shelter and
access to an outdoor range may be labelled free range, as defined in the Model
Code of Practice for the Welfare of Animals covering domestic poultry.[10]
3.12
The committee received evidence that a more comprehensive approach is
required to regulating the use of terms such as 'free range' that relate to
animal treatment. Lawyers for Animals claimed that enforcing laws prohibiting
misleading and deceptive conduct in relation to the sale of meat is too
difficult without laws defining the use of these terms.[11]
They suggested the mandatory labelling of meat products with a simple phrase
best describing their means of production, broadly reflecting the current
approach to eggs. These proposed descriptors cover a range of farmed animals
and include 'free range', 'feedlot confined', 'intensively confined' and 'cage
confined'.[12]
Lawyers for Animals submitted that 'free range' claims should also be subject
to accreditation by an independent oversight body.[13]
3.13
Animals Australia called for a comprehensive but unspecified labelling
system on animal treatment:
...establishment of a uniform nationwide labelling system
identifying methods of production for all meat products—not just free range but
all meat products—so that people have an idea of the husbandry, handling and
housing of the animals that was involved.[14]
3.14
They made the following recommendations:
Animals Australia submits that the Committee should consider
recommending:
- the establishment of a uniform nation-wide system of “cruelty-free” or “animal welfare friendly” labelling for meat products;
- the labelling system be based on quantifiable
standards;
- the labelling system be established and administered
by a body which is independent of industry;
- the labelling body be established and empowered by
statute, and
- meat producers seeking to use the labelling system
would be able to apply for accreditation and be audited regularly by an
independent body.[15]
3.15
RSPCA recommended nationally consistent definitions covering animal
welfare:
What is required are definitions that plainly and
unambiguously describe the housing system provided and the range of conditions
under which the animals have lived. Definitions should provide clear directions
to producers and give consumers the confidence that certain minimum standards
have been met.[16]
3.16
However, they did not provide the committee with suggested definitions
of the terms it expressed concern about:
...rather than coming up with a final solution, we consider
it important that these definitions include information about the facilities
that are part of the production process, the production process itself and
whether that should include aspects such as humane slaughtering of the animals,
and also aspects that relate to the condition of the animals themselves,
including aspects relating to the welfare of those animals, for example, stress
levels.[17]
3.17
RSPCA argued that well defined standards applying to welfare-related
descriptors would provide the basis for a food labelling scheme conveying
accurate information about a producer's animal welfare standards. The system
would need to be underpinned by audits from birth to slaughter. RSPCA did not
express preference for a voluntary or mandatory scheme, though did note that 'consumers
will conclude that unlabelled products are from conventional production
systems'.[18]
3.18
Humane Society International also called for limits to be placed on the welfare
related labelling terms that may be used and under what circumstances, to be applied
consistently across the country and underpinned by legislation. They did not
explicitly spell out the terms they would like, but suggested:
Definitions of terms must include criteria on the source of
the product, the type of housing provided and the specific standards of
husbandry, transport and slaughter.[19]
3.19
Lawyers for Animals insisted that their proposed scheme be mandatory,
stating that the objective of informing consumer choices would be undermined:
When a product label is silent as to its means of production,
we submit that Australian consumers are likely to expect that optimal
production methods have been used.[20]
3.20
Australian Pork Limited (APL) informed the committee that they had
developed a descriptor for 'free range pork'. They stated:
Free Range Pork is pork derived from animals raised in
Australia with adherence to humane animal practices as prescribed by the Model
Code of Practice for the Welfare of Animals (Pigs). Throughout their lives the
pigs are provided continuous free access to the outdoors and shelter from the
elements furnished with bedding. This term may only be used when both the
growing pigs and the sows from which they have been bred have been kept under
these conditions.[21]
3.21
However, they suggested that a prescriptive approach to labelling is not
required, given the role of the ACCC in enforcing the TPA and the availability
of the RSPCA's accreditation standards for labelling.[22]
APL told the committee:
...the further development of production descriptors into
standards (with associated verification systems) is essentially a matter for
the markets. To date APL has not developed specific standards for any form of
pig production system and will continue to be non-discriminatory in this matter
... there is no obstacle to producer groups or associations from developing
these standards or systems themselves as a step to marketing their product
based on its animal welfare criteria.[23]
3.22
Free Range Pork Farmers Association criticised this approach,
characterising it as preferring to 'leave it up to the consumer to do their
homework'.[24]
They called for the committee to 'make recommendations on the development of
nationally recognised standard definitions of animal welfare-oriented meat
production methods'.[25]
3.23
With regard to labelling organic products, Organic Food Chain P/L, one
of Australia's certifying bodies, suggested that the ACCC and are reluctant to
prosecute for misuse of the organic label. They said:
...products sold domestically can use the term "organic" without any verification, nor justification, and with no
fear of prosecution.[26]
3.24
As well as arguing that consumers should not be misled about their food
purchases, they also highlighted potential health concerns that may eventuate:
Consumers actively seek out organic produce for very real
health reasons – people with allergies and those on doctor's instructions.
Fraudulent organic labelling places these people at risk of medical
complications.[27]
3.25
Australian Branded Beef Association (ABBA) called for a more consistent
system of organic certification:
...we strongly support the requirement for a national organic
symbol to be applied only to products certified by AQIS approved certification
agencies. A successful example of this is the USDA Organic Seal. Australia lags
behind most of our high value export markets in this regard.[28]
3.26
Lawyers for Animals also suggested that 'organic' claims be subject to
accreditation by an independent oversight body.[29]
Committee comment
3.27
The committee agrees that it is currently too easy for food producers to
make dubious claims about their animal welfare practices on the labels seen at
retail level. This is because it is too difficult for the ACCC to prosecute misleading
and deceptive conduct in this area when the meaning of these descriptors are broadly
understood but not clearly defined. Any misuse of animal welfare descriptors
such as 'free range' threatens the competitiveness of genuine producers bearing
the increased costs associated with meeting high animal welfare standards.
3.28
Animal welfare-related labelling should be subject to tighter controls
to protect both consumers and genuine producers. The committee notes that the
Australia and New Zealand Food Regulation Ministerial Council is due to start a
comprehensive review of food labelling law and policy in 2009. Defined
standards for welfare-related descriptors will be included in this review if
animal welfare groups bring the issue to the Council’s attention.
3.29
The committee is also of the view that the certification processes
applying to 'organic' labelled products for export should also apply to those
sold domestically. DAFF informed the committee that the organic industry is
developing a voluntary national standard to apply to all the private
accreditation agencies that accredit products to be sold domestically as
'organic'. If this endeavour does not succeed in ensuring a consistent approach
to organic certification, the government should negotiate with the states and
territories to have a national standard, resembling the AQIS standard for
exports, apply to all organic certified products for domestic consumption.
Place of origination claims
3.30
The committee also heard concerns about producers and retailers making potentially
misleading claims about the place of origination of meat products. During the
inquiry producers claimed that existing legislative deficiencies legitimised tenuous
marketing claims and misled consumers about the true origin of products.
King Island
3.31
The King Island Brand Management Group (KIBMG) suggested that companies
were misusing the King Island brand name to the detriment of legitimate King
Island producers. The basis of their complaint is that cattle from King Island
are being processed off the island and labelled as King Island beef.
Consequently, beef that has failed to meet their brand's specification and sold
elsewhere as a commodity product is appearing at retail level as King Island
beef and diminishing their reputation.[30]
3.32
They also highlighted misuse of the King Island brand to sell rabbits
and chickens, neither of which are produced on a commercial scale on the island.[31]
3.33
KIBMG claimed that the quality of beef processed off the island is also
affected by transportation:
We believe that the King Island beef brand product must be processed
on King Island as live shipment off King Island compromises the brand in terms
of quality and being the genuine article. ... Live shipments have the potential
for stress, bruising—which compromises the meat quality, as with dark
cutting—and toughness of meat.[32]
3.34
They suggested that consumers purchasing King Island beef would assume
it was grown, fed and processed on the island, adding that '...the brand
integrity is damaged enormously when that beef is processed somewhere else'.[33]
3.35
KIBMG emphasised the need for protecting the brand for the sake of local
farmers:
A brand is more than just a trade name. A brand is a promise
and is a reflection of the reputation of a product. If that brand is not
protected and guarded jealously, then the value of that brand diminishes. The
other very important thing is that a brand has to be of value to the people who
grow the product. When that brand is diminished the value to those farmers
diminishes accordingly.[34]
3.36
The committee was informed that the viability of operating on an island
with high energy and labour costs was threatened when the brand premium is
undermined:
The perception in the marketplace of the King Island brand
name is a major reason for our major employers ... to operate processing plants
on the island. Companies that have invested significantly to maintain
operations on the island need to command a premium price to offset the high
operating costs to maintain viability. However, by the continual
misrepresentation of the King Island brand, legitimate King Island brands are
being undermined and will eventually be seen as commodity goods due to the
flooding of the market by fakes.
In regards to beef, it is already and industry joke that King
Island must be larger than mainland Australia due to the amount of King Island
Beef in the marketplace![35]
3.37
The committee notes that in March 2009 the island's main processor,
Swift Australia, announced the closure of its King Island abattoir while it
reviewed the viability of its operations on the island. Shortly after, the
plant re-opened after the Tasmanian agreed to offer financial support to the
company during the business review. The future of the plant is still uncertain.[36]
3.38
A major problem for King Island's beef producers is that the Trade
Practices Act does not clearly prohibit the sale of beef grown on the island
and processed elsewhere as being sold as King Island Beef. Section 53(eb)
prohibits corporations from making false and misleading representations
concerning the place origin of goods. Section 65AB provides the test for
country of origin representations and allows a representation as to the country
of origin where:
b) the goods have been substantially transformed in that
country; and
c) 50% or more of the cost of producing or manufacturing the
goods (as the case may be) is attributable to production or manufacturing
processes that occurred in that country...
3.39
The provision does not explicitly apply to regional
claims.
3.40
Blatant misuse of the King Island brand to sell products that had very
little or tenuous association with the island fall within the scope of section
52 of the TPA prohibiting misleading and deceptive conduct.
3.41
Appearing before the committee, KIBMG said that during discussions with
the ACCC the regulator had indicated that as long as the beef is grown on the
island it can be labelled King Island beef.[37]
To overcome this situation KIBMG recommended that legislation be passed that
mirrors the 'geographical indication' (GI) provisions in the Australian Wine
and Brandy Corporation Act 1980. This act defines GI as follows:
geographical indication, in relation to wine, means:
(a) a
word or expression used in the description and presentation of the wine to
indicate the country, region or locality in which the wine originated; or
(b) a
word or expression used in the description and presentation of the wine to
suggest that a particular quality, reputation or characteristic of the wine is
attributable to the wine having originated in the country, region or locality
indicated by the word or expression.[38]
3.42
The Geographical Indications Committee, a statutory committee of the
Australian Wine and Brandy Corporation, makes determinations about GIs.[39]
3.43
KIBMG also called on the ACCC, along with industry bodies such as
AUS-MEAT and MLA, to take greater efforts to police the way red meat is
marketed to consumers.[40]
Australian Pork
3.44
Australian Pork Limited (APL) raised the issue of imported pork products
being labelled as Australian, either through deception or confusing labelling
laws. Their first concern is the possibility of imported pork being substituted
for domestic pork due to poor systems for preventing such activities. They
suggested that 'more robust structures and systems' are required to ensure
labelling laws are complied with:
A significant weakness and failure of the current system lies
in the fact that authority to ensure and enforce compliance is vested with the
state food authorities which are usually too poorly resourced to carry out
effective routine inspections and audits.
Another key weakness in effecting compliance with labelling
laws lies in the limited resources and authority of AQIS. There are significant
gaps in the ability of AQIS to enforce import protocols. APL is seriously
concerned with the weaknesses and flaws in the current audit and compliance
system which is used to provide confidence that the quarantine conditions
required for imported pigmeat are being effectively complied with. We believe
that it is open to misuse and deception, either intentionally or indirectly.
Significant areas of concern relate to the post border use of quarantine
material (i.e. imported pigmeat) following receipt of this material at the
registered warehouse and within the manufacturing plant itself, in particular
the possible substitution of imported pork for domestic pork post border within
the manufacturing system.
In the absence of mass balance reconciliation of imports and
their intended use, as well as a robust audit process, there is the potential
for substitution of imported pork with domestic post border within the
manufacturing process.[41]
3.45
APL suggested that AQIS carry out reconciliations of the volumes
imported and domestic pork entering and leaving pork manufacturing
establishments.[42]
3.46
The second issue of concern relates to current legislative provisions on
country of origin labelling in the TPA. In particular, APL highlighted
confusion and anomalies arising out of the current definitions of 'Made in
Australia' and 'Product of Australia' applying to processed pork products.
Under the TPA a product must meet the following criteria for it to be labelled
'Product of Australia':
- Each significant ingredient or component of the goods must be
from the claimed country of origin; and
- All, or virtually all, processes involved in the production or
manufacture happened in that country.[43]
3.47
However, APL pointed out that 'smallgoods processed in Australia from
100 per cent Australian pork are currently unable to use this label as brine,
an essential ingredient in curing pork, is not produced locally and must be
imported'.[44]
According to APL this restriction is predominantly a theoretical one:
Despite the use of imported brine in all hams and bacons, “Product of Australia” claims are used in packaged and bulk pork products which
use 100 per cent Australian sourced pig meat, and the industry/APL feels no
motivation to correct this, as it is at least one mechanism for enabling
consumers to choose Australian product if they so desire.[45]
3.48
The definition of 'Made in Australia' provides for a lower threshold for
producers to use this label. The following criteria must be met:
- The goods must have been substantially transformed in the claimed
country of origin; and
- 50 per cent or more of the cost of production must be
attributable to processes that occurred in that country.
3.49
The TPA stipulates that:
...goods are substantially transformed in a country if they
undergo a fundamental change in that country in form, appearance or nature such
that the goods existing after the change are new and different goods from those
existing before the change.[46]
3.50
APL strongly criticised the operation of these categories when applied
to imported food products, including processed pork. They argued that the 'Made
in Australia' label is misleading for consumers because it does not necessarily
relate to the source of the meat in the final processed product:
If a ham or bacon product has had more than 50 per cent of
its value added in Australia, and has been substantially transformed in
Australia, it may qualify to claim to be 'Made in Australia'. Ham or bacon made
in Australia from imported fresh pork may have been substantially transformed
and more than 50 per cent of the value of manufacturing process may have been
added in Australia.[47]
3.51
They told the committee that, when applied to food, consumers do not
understand the meaning the labels are actually conveying. Recognising that the
current labelling system may be appropriate for other non-food products, APL
suggested that a separate set of arrangements be established for food.[48]
3.52
DAFF informed the committee that in November 2008 COAG agreed that 'a
comprehensive review of labelling should be undertaken'. They added that:
The Australia and New Zealand Food Regulation Ministerial
Council will be undertaking that review. That independent review will be
conducted over the next year or so.[49]
Committee comment
3.53
The committee understands the difficulties faced by King Island beef
producers competing against beef raised on the island, processed offshore and
labelled under the same name. However, adopting the geographical indication
system applying to the wine industry would not be appropriate for the beef
industry. Geography is significant in the wine industry because of the unique drinking
characteristics special growing regions furnish their wines. Growers and
winemakers in these regions are entitled to be protected from having the
integrity of their product undermined by producers elsewhere claiming the same
style without geographical basis. Beef products cannot be said to have
characteristics so inherently attributable to the region in which the animals
are raised. Regional claims in the beef industry are a marketing ploy. King
Island beef processed on the island may be a very good product, but this will
be due to quality breeding, cattle raising and supply chain practices, rather
than the fact that the entire process occurs on King Island as opposed to
anywhere else.
3.54
The ACCC should pursue clear misuse of the King Island name in
accordance with section 52 of the TPA prohibiting misleading and deceptive
conduct. Indeed, the committee suggests that the ACCC take a particular
interest in the misuse of the King Island name to relieve the island's
producers from the burden of identifying and reporting such cases. However, the
committee is unable to recommend legislative change prohibiting beef raised on
the island from being identified as King Island beef. King Island producers
will ultimately need to solve this particular marketing problem with a
marketing solution.
3.55
On the matter of country of origin, the committee agrees with APL that
the current TPA definitions regulating the use of 'Product of Australia' and
'Made in Australia' are not suitable for food products. The 'Made in Australia'
label may provide useful information on manufactured goods but is not suitable
for processed food. Consumers would be surprised that processed meat products
using imported meats could be sold under the same label as those using
Australian meat.
3.56
The committee notes DAFF's evidence that food labelling laws are
currently the subject of a review by the Australia and New Zealand Food
Regulation Ministerial Council. The committee is of the view that one outcome
of this review should be for the government to create separate country of
origin regulations for food products that recognise the importance of the
origin of ingredients in processed food as well as the place where production
processes occurred.
Recommendation 2
3.57 Subject to the current Australia and New Zealand Food Regulation
Ministerial Council review into food labelling, the government create separate
country of origin labelling regulations for food products that recognise the
importance of the origin of ingredients in processed food as well as the place
where production processes occurred.
3.58
Without evidence of imported pork being substituted for domestic pork
during the manufacturing process, the committee is unable to recommend
reconciliations of the volumes of imported and domestic pork entering and
leaving pork manufacturing plants.
Senator Fiona Nash
Committee Chair
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