Chapter 1
Introduction
Conduct of the inquiry
1.1
On 20 September 2012 the Senate referred the Competition
and Consumer Amendment (Australian Food Labelling) Bill 2012 (No. 2) (the bill)
to the Senate Rural and Regional Affairs and Transport Legislation
Committee (the committee) for inquiry and report by 5 February 2013.[1]
1.2
On 20 November 2012 the Senate granted an extension until 21 March
2013.[2]
1.3
The bill was referred to the committee in order to consult further with
producers, industry and stakeholders.[3]
1.4
In accordance with usual practice, the committee advertised the inquiry
on its website and in The Australian. The committee also wrote to
relevant stakeholders inviting submissions. The committee received 32
submissions in total. A list of submitters can be found at Appendix 1.
1.5
A public hearing was held in Hobart on Monday, 18 February 2013. The
hearing was conducted by a subcommittee chaired by Senator the Hon Lin Thorp,
with Senator the Hon Richard Colbeck as deputy chair and Senator Christine
Milne as the third committee member. A full list of witnesses who appeared at
the hearing can be found at Appendix 2. A copy of the Hansard transcript is
available at the committee website.[4]
Background
Key provisions of the bill
1.6
This bill is designed to amend the Competition and Consumer Act 2010,
in particular by implementing reforms to the designation and regulation of
country-of-origin labelling (CoOL) for food in Australia.
1.7
The bill was introduced as a private Senator's bill by Senator Christine
Milne, the leader of the Australian Greens. Senator Milne has subsequently
suggested that the bill needs some amendment to strike a better balance between
the needs of Australian primary producers and those of Australian manufacturers
and food processors.[5]
Current country of origin labelling
arrangements
1.8
Australian CoOL requirements are enforced primarily by two mechanisms
that operate independently from one another. They are:
- The Australia and New Zealand Food Standards Code (the Code),
particularly
Standard 1.2.11, which covers country-of-origin requirements for food for
Australia only; [6]
and
- The general provisions of Australian and New Zealand consumer
laws on misleading or deceptive conduct. In Australia this is covered by the Competition
and Consumer Act 2010 Schedule 2, which replaced the Trade Practices Act
1974 in 2010.
1.9
A summary of the CoOL provisions contained in the Competition and
Consumer Act 2010 can be found in Appendix 3.
1.10
Australia's CoOL conditions are set out in Standard 1.2.11 of the Code. Standard
1.2.11 sets out the circumstances where certain terms and labels may be used:
- "Made in..." (eg Made in Australia; Australian Made): For
goods that have been substantially transformed in the specified country and where
at least 50 per cent of the cost of production or manufacture has occurred in
that country.
- "Product of/ Produce of..." (eg Product of Australia): When
the specified country was the country of origin of each significant ingredient
or significant component of the goods and all – or virtually all – the
production or manufacture happened in that country.
- "Grown in..." (eg Grown in Australia; Australian Grown): Where
each significant ingredient or component of the goods was grown in that county and
all – or virtually all – processes involved in the production or
manufacture happened in that country
- "Made in... from local and imported ingredients / Made in ...
from imported and local ingredients": This is a qualified claim that can
be used where it is not possible for a stand alone "Made in..." claim
to be made. This could be because of uncertainty around the question of
substantial transformation and/or whether 50 per cent of the cost of production
or manufacture is met and/or to adjust to seasonal variation in availability of
individual ingredients used. [7]
1.11
This 'confusing plethora of definitions' has led to general consumer
confusion which the current bill seeks to address.[8]
1.12
The key concept of 'substantially transformed' is discussed in chapter
2.
CoOL arrangements proposed by this
bill
1.13
The Explanatory Memorandum of the bill states that, if it is passed, the
two key amendments will:
- create a specific section in the Competition and Consumer Act that
deals solely with country of origin claims regarding food. This will cease the
treatment of food as just any other good and creates a single regulatory regime
that retains mandatory labelling requirements, whilst superseding the CoOL
stipulations of the Food Standards Australia New Zealand Act 1995; and
- provide that CoOL for food should be based on the ingoing weight
of ingredients and components excluding water. This will allow Australians to
know the origin of the food they are buying first and foremost, rather than
informing them where processing and packaging took place.[9]
1.14
In doing so, the amendments proposed by this bill will remove the
stand-alone claim 'Made in Australia' about food. The Explanatory Memorandum
claims that this will provide unambiguous language and set benchmarks that
Australian consumers can use to quickly and accurately evaluate where food
products were grown.
1.15
Food grown in Australia will be able to state 'Grown in Australia' on
the labelling, as it can currently. Where packaged food is made from 90 per
cent or more Australian ingredients by total weight excluding water, it must be
labelled 'Made of Australian Ingredients'.[10]
The Blewett Review
1.16
These two proposed key amendments will enact two recommendations made by
the independent review of food labelling, commissioned by the Australia and New
Zealand Food Regulation Ministerial Council and led by Dr Neal Blewett AC. This
was published on 28 January 2011 as Labelling Logic (Blewett Review).
1.17
Recommendation 41 of the Blewett Review states:
That mandatory requirements for country-of-origin labelling
on all food products be provided for in a specific consumer product information
standard for food under the Competition and Consumer Act 2010 rather
than in the Food Standards Code.[11]
1.18
And recommendation 42 states:
That for foods bearing some form of Australian claim, a
consumer-friendly, food-specific country-of-origin labelling framework, based primarily
on the ingoing weight of the ingredients and components (excluding water), be
developed.[12]
1.19
Recommendation 41 of the Blewett Review was also referenced by
recommendation 12 of the report made by the Senate Select Committee on
Australia's Food Processing Sector (August 2012). That report stated:
The committee recommends that the government move mandatory
country of origin labelling requirements for food to a specific consumer
product information standard under the Competition and Consumer Act 2010,
consistent with recommendation 41 of the Blewett Review.[13]
The Government response to the
Blewett Review
1.20
The Government released a response to the Blewett Review on
9 December 2011. This response included a detailed response to all 61 recommendations
made by the Blewett Review. Importantly, it stated that:
- Recommendation 41 should not be pursued 'at this time'. It stated
that 'The Commonwealth will give further internal consideration to this issue
before deciding to pursue any changes to the Competition and Consumer Act
2010 in relation to this issue.'
- The Government did not agree with Recommendation 42. It concluded
that 'there are practical difficulties with adopting a framework based on
ingoing weight of ingredients and components. However the Commonwealth will
give further internal consideration to this issue, including reviewing current
information available to consumers and industry about [country of origin
labelling].'[14]
1.21
Furthermore, it should be noted that whereas the proposed amendment being
considered by this report sets the threshold at which a product can use 'Made of
Australian Ingredients' at 90 per cent of Australian ingredients by total
weight excluding water, the Blewett Review set no precise thresholds in its recommendations.
It did recommend that the threshold for 'Made of Australian Ingredients' should
be above 80 per cent by weight (excluding water), although it conceded that it
'left the fine details of the framework to those with expertise in the matter.'[15]
Acknowledgements
1.22
The committee wishes to thank all the organisations and individuals that
made written submissions to the inquiry, as well as the representatives who
gave evidence at the public hearing.
Report structure
1.23
This report is divided into two substantive chapters. Whereas this
chapter has outlined the background and policy context in which the legislation
is proposed, the following chapter, Chapter 2, will discuss the issues raised
by the inquiry. It will then outline the committee's views and conclusions, and
lastly provide certain recommendations.
Note on references
1.24
References to the committee Hansard are to the proof Hansard. As such,
page numbers may vary between the proof and the official (final) Hansard
transcript.
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