In line with the work of the Industry Working Group’s discussion paper, the committee received various proposals for improving product labelling requirements. As discussed in Chapter 3, the primary focus involved amendments to the FSANZ Code. However, the committee also heard support for industry-led voluntary guidelines and regulatory measures to be implemented under Australian Consumer Law (ACL).
The first approach is the development of industry-led voluntary guidelines that support best-practice principles for the labelling and marketing of the plant-based protein sector. This voluntary framework would involve industry determining appropriate guidelines on text size, prominence of qualifier statements and potential agreement on the discontinuation of animal imagery on plant-based protein products.
The next approach is a co-regulatory framework, consisting of either a voluntary or mandatory code of conduct overseen by the Australian Competition and Consumer Commission (ACCC). This model would be similar to existing codes of conduct, such as the voluntary Food and Grocery Code of Conduct or the mandatory Dairy Code of Conduct.
Finally, a further suggested action is for the ACCC to issue a National Information Standard. This Information Standard would detail labelling requirements for plant-based protein products.
As noted in this report, the Industry Working Group considered all models suggested above. The majority of its participants concluded that a voluntary model, led and implemented by industry, was the preferred pathway forward. This conclusion was objected to by representatives of the red meat industry along with other animal protein sectors.
This chapter considers these perspectives in more detail, and the range of regulatory and policy options available to strengthen product labelling requirements for plant-based protein products in Australia.
A voluntary framework would see the development of industry-led standards and guidelines on best-practice labelling and marketing requirements across the plant-based protein sector. Under this model, industry would be tasked with determining appropriate descriptors and naming conventions, the use of qualifiers, prominence of key terms on packaging, font size and the use of imagery. This voluntary approach would be self-regulated and, as described by the Industry Working Group, would work toward a mutually agreeable solution across industries and potentially ‘consist of industry-written rules or codes enforced by industry itself’.
The rationale behind a voluntary framework is to address the concerns of the animal protein sector and create consistency across plant-based products, without formalising such standards through a government approval process, particularly when there is insufficient evidence of consumer confusion. Should such measures fail to achieve their intended purpose, then a mandatory framework would then be pursued.
The development of a voluntary framework was supported by a range of stakeholders, particularly those from the plant-based foods and dairy sectors. The Alternative Protein Council (APC), which participated in the Industry Working Group, expressed its support for a voluntary framework because of their demonstrated success. Two examples were referenced, the first being cross-contact labelling of allergens, and the second framework, called ‘Be treatwise’, which supported a standardisation of confectionary serving sizes. The APC noted that these two voluntary frameworks had labelling and process outcomes, showed due diligence across the food sector and demonstrated strong adherence. The APC’s Chair, Mrs Kirsten Grinter, added that a voluntary framework could be quickly developed and have positive outcomes when guidelines are developed by industry:
Of course, we are all working in that food competitive space, but voluntary guidance can happen quickly. In a growing industry like the alternative protein sector you can drive consistency and clarity really fast. It's really agile. Also, what I've found is that, if industry is part of the process, you are really invested in it—invested in providing clear guidance for the greater industry and the broader industry. It's really important to us that it's really clear—the plant based nature of these products is what is really important, and we are invested in that and really wanting to make sure that our labels are clear and consistent, and it will enable consumer choice in the end.
This sentiment was echoed by Food Frontier’s Chief Executive Officer, Mr Thomas King, who commented that ‘code of practice or industry guidelines is a logical next step’, and warned against imposing unnecessary red tape on the sector:
This approach would allow companies to work together to address the concerns that have been raised, particularly those few brands currently using the atypical approach I described. A consensus based, industry led approach is a sensible and effective next step. We would caution against imposing red tape that could unnecessarily restrict Australia's competitiveness in this rapidly growing global sector.
A voluntary approach was determined to be the best pathway forward by the majority of the Industry Working Group’s participants, excluding those from the red meat industry. The working group’s report proposed that further work should be undertaken to explore this option. It was recommended that the voluntary approach incorporates a compliance and enforcement framework that is subject to review. The National Farmers’ Federation (NFF), which chaired the working group, explained that the chosen approach was to ‘see if we can address the problem without the heavy hand of legislation in the first instance’ and, should that not ‘have the desired effect, then, of course, we could fall back to a legislative, regulatory approach’. When asked whether it supported a voluntary framework, the NFF explained:
…we call for a minimum regulatory regime. If that's a voluntary code of conduct or voluntary arrangement and that fixes the problem, then most people would say that that's a good outcome.
In addition to a voluntary framework, the Animal Justice Party pointed out that robust and effective refund mechanisms are already in place with retail outlets, should a consumer unintentionally purchase a plant-based product. In addition, it suggested the use of a universal symbol, similar to the heart smart symbol, to be used on plant-based products to support the quick identification of these products. The Pastoralists Association of the Darling Downs, The Green Shirts Movement Queensland and Property Rights Australia all agreed an easy to read logo would help reduce mistaken purchases by consumers, but further requirements of font size and prominence of certain information would be needed too. Dr Rachel Cruwys made reference to the V-Label used in Switzerland to indicate a food item as vegan as a potential model.
Australia’s dairy industry also supported the voluntary approach agreed to by the Industry Working Group. The Australian Dairy Industry Council outlined its rationale for this decision with the committee:
In the spirit of this intent, and knowing the difficulty we have had previously in achieving regulatory change, we agreed to develop a voluntary industry guideline to resolve this issue. If this can be produced and is successful, we will be happy with that outcome. If not, then we call on all political parties to agree to a policy of changing the food standards code.
The committee queried the nature of the Industry Working Group findings and the role of advocates for the plant-based protein sector. In response, Australian Dairy Farmers (ADF) explained that the voluntary framework was the middle ground between advocates of current status quo (Food Frontier and Australian Food and Grocery Council) and those in support of a regulatory model along with amendments to the FSANZ Code (representatives from the meat and dairy industries). The ADF’s representative, Mr Craig Hough, added whilst both camps ‘were almost at polar ends’, participants had ‘come in the spirit of consensus, which is what the intent of the group was…[t]hat’s when we came up with that recommendation for the voluntary guideline’. For the dairy industry, this proposal meant immediate action would take place, and lend to the sector’s long term goal of reforming section 1.1.1 — 13 (4) of the FSANZ Code. Its support was also conditional on a ‘very clear compliance framework and an early review period’ as the ‘key parameters that would be associated with the voluntary framework’.
Objections to a voluntary approach
Representatives from across the animal protein sector largely objected to the voluntary framework. The committee heard a range of views on this matter, with some stakeholders questioning whether the plant-based protein sector could be trusted under a voluntary framework. Some stakeholders warned that any delay could risk further normalisation of appropriated meat category brands.
The Australian Meat Industry Council outlined its concerns with the approach. It expressed doubt that the voluntary guidelines would be followed by the plant-based protein sector and questioned the effectiveness of government bodies in ensuring the guidelines are applied. Mr John McKillop of the Red Meat Advisory Council (RMAC) shared a similar sentiment, adding that there was a risk labelling practices would become normalised by delaying proper action, as experienced by the dairy industry:
We just felt that if we were to move to a voluntary code it would simply be ignored and pushed to the boundaries for the next five years, at the end of which, if we then moved towards legislation or a change to FSANZ, the plant-based-manufacturing industry is likely to say, 'Well, it's just part of the language now and everyone accepts it.' It's pretty much what they've done in dairy.
The promotion of a voluntary framework as the agreed pathway forward was further challenged by representatives from across the animal protein sector. Sheep Producers Australia pointed out that whilst representatives from the red meat industry participated in the Industry Working Group, it did not include representatives from the poultry, pork and seafood industries. Its representative, Mr Stephen Crisp, commented that the red meat industry had been ‘drowned out by the make-up of the group’.
The APC noted that, whilst not all animal protein representatives were present for the initial consultation process, further engagement with those sectors would take place as the industry progressed voluntary industry guidelines. The NFF confirmed that it, as the national peak body for the agricultural sector, represented those industries. However, Mr Tony Mahar of the NFF added that ‘in hindsight, we might have been able to get a little better representation on the group’.
Stakeholders who participated in the Industry Working Group had not received advice on the status of the Minister for Agriculture’s consideration of the Industry Working Group’s findings and recommendations. However, Food Frontier advised that the industry had ‘actively engaged in discussions around what those guidelines could look like’. The committee was advised by the Minister for Agriculture that further work would commence once the committee’s findings and recommendations were tabled.
Alternative proposals included co-regulatory approaches, which can exist as either a voluntary (opt-in) or mandatory framework. Either of these approaches are centred upon the development of a code of conduct, negotiated and enforced under the Competition and Consumer Act 2010 (Competition and Consumer Act).
A voluntary (opt-in) code of conduct, as described by the Industry Working Group, would formalise the development of voluntary standards through the Food Standards Australia and New Zealand Act 1991. To achieve an agreed outcome, the ACCC ‘encourages industry to develop voluntary codes that will deliver effective compliance with the Competition and Consumer Act 2010’. Anticipated benefits of such an approach include increased consumer protection without the added regulatory burden for businesses, as well as greater flexibility with capacity to ‘change in response to industry and consumer needs’. A successful voluntary model referenced throughout this inquiry was the Food and Grocery Code of Conduct.
The committee heard a range of views on the development of a code of conduct. Sheep Producers Australia did not support this approach, based on the view that plant-based protein manufacturers would circumnavigate the requirements established by the code. As previously noted, the NFF would be supportive of a minimum regulated regime that involves a ‘voluntary code of conduct or voluntary arrangement’.
When asked about the suitability of code of conducts, Dr Geoffrey Annison of the Australian Food and Grocery Council provided a summary of their success:
There is a supermarket code of conduct. We've had labelling codes in the past. Codes are used in the agricultural sector, for example. A code of practice on animal welfare is used by the animal sector. That's been very successful. There's a code of practice by Meat & Livestock Australia on the safe retailing of meat. I think they would argue that that's been successful. So codes of practice are well accepted as being, if you like, the light touch of regulation. They are at the lighter-touch end on the spectrum of regulation that goes from guides through to black-letter-law regulation. They are accepted as a legitimate intervention by the ACCC, and the ACCC has sophisticated guidelines on how codes of practice and guides can work. Indeed, the FSANZ Act gives FSANZ the ability to recommend codes of practice as an alternative regulatory regime.
The Industry Working Group’s detailed potential pathways forward with a voluntary code of conduct approach. The first was through the FSANZ Act, but would require there to be a ‘consumer health or safety concern’. Based on this threshold, this approach would be unlikely due to FSANZ not identifying any health or safety issues arising from the labelling and marketing of plant-based protein products.
An alternative pathway is for a code of conduct to be prescribed under the Competition and Consumer Act 2010. This pathway would require a ‘clear rationale on what basis it would be formed’ based on ‘evidence that the current legal framework is deficient or leading to market failure’. The Industry Working Group noted that ‘[t]his process would involve significant work in policy development, as well as support from Treasury and the ACCC’. The discussion paper noted that research conducted by the ACCC has found ‘voluntary codes of conduct tend to be more effective when the self-regulatory body has widespread support of industry, comprises of representatives of the key stakeholders, and operates an effective system of compliance handling’.
The preferred pathway forward for many submitters and witnesses to the inquiry was the development of a mandatory regulatory framework. As discussed in Chapter 3, reform to the FSANZ Code is one avenue to achieve this goal. Other proposals include the development of a mandatory code of conduct and/or creating a National Information Standard.
Mandatory code of conduct
A suggested measure to strengthen the labelling and marketing of plant-based protein products is the implementation of a mandatory code of conduct. This approach would require industry and government to develop, administer and regulate the code of conduct. Industry would seek to develop the code of conduct, whilst government would facilitate the legislative environment to ensure the arrangements are enforceable.
This approach was adopted across the dairy industry with the Dairy Code of Conduct, which came into effect on 1 January 2020. This Code regulates the conduct of farmers and milk processes with one another, with milk supply agreements subject to the Code. This Code of Conduct commenced as a voluntary approach, but the ACCC determined a mandatory code was more appropriate after shortcomings were identified with the voluntary framework. Since the adoption of a mandatory framework, penalties provisions are in place that enable the ACCC to take legal action to seek financial penalty for a breach of the code, or the issuing of an infringement notice.
Like a voluntary code, there are certain evidential benchmarks that need to be met to warrant a mandatory code of conduct. Should a mandatory code be established under the FSANZ Act, then sufficient evidence is required to show consumer health and safety is at risk. As previously noted, FSANZ has not identified any health or safety issues arising from current labelling and marketing practices of the plant-based protein sector.
Alternatively, a code of conduct could be established under the Competition and Consumer Act. For this to occur, a clear rationale for the code would need to be established, with ‘evidence that the current legal framework is deficient or leading to market failure’. The Industry Working Group emphasised that issues arising from the current labelling and marketing of plant-based alternatives differs from the circumstances that led to the Dairy Code of Conduct, where there was ‘a clear market failure that needed to be addressed’. Further investigation would need to be conducted to determine how a code of conduct could be developed and a suitable place for this code of conduct to sit within government.
Finally, the Industry Working Group noted that an alternative non-government enforcement option could be the establishment of an independent facility that could audit marketing and labelling of products against set standards. This approach has been taken with AUSMEAT and its capacity to administer labelling standards and application on behalf of the Australian Government.
National Information Standard
The committee also heard support for an issuing of a National Information Standard by the ACCC. Under this proposal, a standard would be issued on how particular animal protein descriptors can be used, as well as livestock imagery. The Industry Working Group’s discussion paper noted that it ‘could outline what plant-based alternatives labelling and marketing could include, and what they cannot include’, with the plant-based sector responsible to ensure their products comply with the standard. Should they not comply, then penalties may be enforced.
This proposal was advocated by RMAC, the Australian Chicken Meat Federation, Australia Pork Limited, AgForce Queensland Farmers, the Tasmanian Farmers and Graziers Association, the Australian Meat Advisory Council, and others.
As described in Chapter 2, the RMAC proposed the ACCC could address the market failure by establishing an information standard for red meat category branding under section 134 of Schedule 2 to the Competition and Consumer Act 2010. Under this proposal, the information standard would define meat category brands (‘meat’, ‘beef’, ‘lamb’, and ‘goat’) and:
… deliver upon the intergovernmental agreement for the ACL to effectively protect and empower consumers, foster effective competition, and enable confident participation of consumers in markets by promoting fair trading.
It was suggested that this proposal would be modelled off the Australian Consumer Law (Free Range Egg Labelling) Information Standard 2017, which was implemented to address ‘consumer confusion and misleading claims’ about egg products being labelled ‘free range’ when in fact they were in cages or pens. Similarly, the RMAC submitted that a:
… regulated information standard for meat category brands will provide clear guidance to prohibit [plant-based alternative protein producers] from making false or misleading representations or engaging in misleading or deceptive conduct about the origin of their products.
Under this regulatory model, the Australian Chicken Meat Federation called for infringement penalties to be consistent with the penalties that apply to breach of the country-of-origin labelling laws. It also clarified it would remain supportive of flavour descriptors, such as ‘chicken’ being utilised for discretionary foods.
The ACCC responded to criticisms for its lack of action against the labelling of plant-based protein manufacturers, in comparison to its decision to take action against poultry businesses under the Free Range Egg Labelling Standard. It informed the committee that each complaint is assessed on its own merits and in this case, the ACCC found that those poultry producers kept their produce in cages and pens. For this reason, it was ‘a much clearer case of creating a misrepresentation’. The ACCC’s Mr Rami Greiss proceeded to explain the role of qualifier statements alongside meat descriptors on plant-based protein products, and the totality of the representation made on the labelling. In these cases:
… it doesn't create the overall impression that it's clearly a beef or chicken product. At most, it creates a sense of confusion, which the courts have found not to breach our act.
The Industry Working Group noted that should this pathway be implemented, then a proposal would need to be submitted with the Legislative and Governance Forum on Consumer Affairs. Before any decision is taken, ‘consultation with industry, consumer research and development of a regulatory impact statement (RIS) would have to be undertaken’. Potential benefits of this approach include: enhanced distinguishability between plant-based and meat and dairy products; to promote consistency across products, including terminology; establishes clear parameters and supports export of clearly differentiated food; and reduces the likelihood of regulatory cost-shifting. Regulatory costs on food manufacturers would need to be considered as part of this approach.
Committee comment and recommendations
Whilst the committee has considered the merits of all the approaches detailed in this Chapter, it has ultimately resolved that a mandatory framework is the most suitable pathway forward. Whilst the voluntary framework was recommended by the Industry Working Group, the committee does not believe the composition of the group was reflective of all animal protein sectors. Had the poultry, pork and seafood industries participated in those discussions, then the claim of a majority report would be questionable.
The committee shares the concerns that a voluntary approach will fail to meet consumer expectations, nor result in any substantive change across the industry. As the meat industry has warned, any delay in progressing a mandatory framework will result in a further normalisation and entrenchment of existing practices across the plant-based protein sector. This outcome must be avoided.
The committee agrees with the animal protein sector that there is a clear market failure caused by current labelling and marketing practices of the plant-based protein sector. The committee believes the ACCC has failed to adequately appreciate the scale of this problem, and consumer sentiment on the matter. Of the approaches suggested as part of an ACL resolution, the committee is supportive of the development of a National Information Standard. This Information Standard should seek to define meat category brands (such as ‘meat’, ‘beef’, ‘lamb’, ‘goat’, ‘pork’, ‘chicken’ and seafood terminology). This approach would also assist with the development of guidelines on the use of livestock imagery, which is not currently regulated under existing measures.
The committee recommends the Australian Competition and Consumer Commission develops a National Information Standard that defines and restricts the use of meat category brands to animal protein products. This standard should include guidance on the use of livestock imagery for labelling and marketing of plant-based protein products.