From where? Home truths about what you’re really eating

Clementine Julian, Australian Farm Institute

‘Confused’ is the adjective now commonly used to describe consumers who wish to select Australian food products at supermarkets. Information on product labels has little if anything to do with where a food product was actually grown. And those ‘Aussie-farmer friendly’ major retailers – so keen to advertise and promote how much they help Australian farmers – seem to be at the forefront when it comes to creating confusion about the national origins of food products.

As a simple example, most would assume that if a label on some pork or ham in a supermarket says, ‘Made in Australia,’ then the product came from an Australian pig, which was reared under Australian animal welfare rules and safety standards, and processed through an Australian abattoir subject to strict food safety, disease and workplace safety regulations. They might take some comfort from the fact that in purchasing a product that was ‘Made in Australia’ they were helping to support Australian jobs and contributing to the wellbeing of Australian working families.

Despite good intentions, the consumer would unfortunately be wrong. Under Australian food labelling laws, pork, ham or any other form of processed meat from a pig can be imported from overseas, and only needs to be subject to minimal processing in order to be eligible to be legally sold with the ‘Made in Australia’ label under Australia’s current country of origin labelling laws.

The recent Senate inquiry into the food processing sector emphasises the fact that current country of origin labels on produce are often misleading. Supporting this finding, numerous research papers and consumer surveys have confirmed how confused Australians are about what food labels actually mean.

Australia’s current food-labelling regulations

Current Australian food labelling regulations state that all packaged food sold in Australia must have a phrase or statement on the package which identifies where food was made or produced, or the label must contain the location where the produce was manufactured or packaged for sale. In 2006, a regulation was enacted that also made country of origin labelling mandatory for some fresh produce (seafood, pork, fruit and vegetables), but even with this regulation in place, there are still major loopholes in the system.

The regulatory framework that makes up Australian food labelling laws includes;

  • The Australia New Zealand Food Standards Code
  • Codex Alimentarius (Codex)
  • The Australian Competition and Consumer Act 2010 (CCA)

There is a considerable degree of interaction between these. For example, the Food Standards Code requires that certain foods display their country of origin and, if applicable, manufacture. The CCA, on the other hand, provides guidance about the terminology to be used in making claims about the country of origin or manufacture of goods, including produce.

Australian New Zealand Food Standards Code

This code states that food products must identify the country of origin of ingredients and the country where the product was processed for retail sale. This particular code was developed as part of the Codex Alimentarius (Codex) which is a collection of production and food safety standards specified by the United Nations Food and Agriculture Organization and the World Trade Organization.

The Competition and Consumer Act 2010 (CCA)

The CCA aims to protect consumers and businesses from unfair practices and misleading conduct. It includes requirements that labels applied to food products are not misleading.

The requirements associated with specific claims made on labels are detailed below in Table 1.

One major concern that was discussed during the recent Senate inquiry is the issue of ‘substantial transformation’. For a product to be labelled ‘Made in Australia’ it is required to have undergone substantial transformation in Australia. This is interpreted to mean that a product can be labelled ‘Made in Australia’ if 50% or more of its production costs have been incurred within Australia. Due to Australia’s high production costs, exchange rate and standards of living, even minimal processing or repackaging of imported products in Australia can make them eligible under these laws to be labelled ‘Made in Australia’.

A range of different processes are able to be included in the consideration of whether or not an imported product has undergone ‘substantial transformation,’ including; freezing, canning, preservation processes, mixing or blending of ingredients, juicing, homogenisation, seasoning, marinating, curing, roasting, toasting and coating. As one witnesses at the recent Senate inquiry stated, ‘we challenge any man to know the difference between “Product of Australia” and “Made in Australia”.’
Australian Pork Limited (APL) has expressed strong concerns about this matter in a statement saying, ‘Products made from imported pig meat are permitted to use the “Made in Australia” label if the product has been substantially transformed in Australia.’ APL has undertaken internal research on this matter and found that consumers really do believe the claim, ‘Made in Australia’ means that pigs were actually born and raised in Australia.

A Roy Morgan Poll in 2007 found that 89% of Australian’s felt that it was either important or very important that fresh food was of Australian origin, and 82% expressed similar views about processed food. While consumer actions at the checkout do not always reflect survey responses, this preference for locally produced food is well understood by marketers, and hence is something they like to take advantage of – even to the extent of misleading consumers about the true origins of the food they are consuming.

This issue has also been highlighted in the recent Blewett Review, Labelling Logic: Review of Food Labelling Law and Policy, which addresses country of origin labelling in Australia. The review found that Australian consumers are genuinely confused by the overabundance of terms used to label the origin of food. This has led to the current Senate inquiry and recent Greens bill, The Competition and Consumer Amendment (Australian Food Labelling) Bill 2012.

What is happening overseas?

Contention about food labelling is not confined to Australia. The issue is also much debated internationally, as the following brief reviews of the food labelling issues in the United States (US) and Europe highlight.

United States

The US has similar country of origin food labelling laws to Australia. Under the Farm Security and Rural Investment Act 2002 (Farm Bill 2002) country of origin labelling must be provided for fresh beef, pork and lamb. In September 2008, the US extended current labelling provisions to muscle cuts and ground beef, veal, lamb, pork, goat, chicken, farm raised and wild fish, shellfish, fresh and frozen fruits, vegetables, peanuts, pecans, macadamia nuts and ginseng. As is the case in Australia, the issue of ‘substantial transformation’ is an important concept.

For meat in particular there are a number of different ways that it can be labelled. These are as follows;

  • Product of the US: if the animal was born, raised and slaughtered in the US.
  • Product of the US, Country X and Country Y: if the animal was born, raised and slaughtered in the US but then commingled with products from other nations.
  • Product of the US, Country X and Country Y: if the animal was born and raised in another country and then slaughtered in the US.

  • Product of Country X and the US: if the animal was imported into the US for immediate slaughter.

  • Product of Country X: if imported product was processed in another country and then imported for sale in the US.

Domestic and imported perishable agricultural commodities such as peanuts, pecans, macadamia nuts and ginseng, may all use state, regional, or locality labelling instead of country of origin labelling. The state, region or locality label used for these commodities can be abbreviated in accordance with US Postal Service abbreviations, whether domestically harvested or imported.

There has also been discussion about mandatory country of origin labelling in the US. Many consumers and producers see it is an advantage to local producers, as consumers want fresh produce that is locally grown and want to support domestic self-sufficiency. In addition, given past incidents of Bovine Spongiform Encephalopathy (BSE), there is now increased consumer interest in the origin of meat, in particular. In contrast, those who oppose mandatory labelling believe there is not enough evidence to support its adoption, and see it as a thinly disguised trade barrier against imports.

There are also numerous costs associated with changes to country of origin labelling. Those opposing labelling in the US estimate that change could cost the food sector, $3.9 billion in the first year, if mandatory labelling provisions were to be implemented. Those favouring labelling laws say that these estimates are extremely exaggerated.

European Union

Mandatory country of origin food labelling applies in the European Union (EU) for a range of products, including beef and beef products, honey, fruit, vegetables, fish, olive oil and also for any product having a misleading name. An example of this could be a product called ‘English Cheese’ which is made in France.

The European Commission (EC) has established mandatory labelling laws, which EU member states are required to follow. Some examples are as follows;

  • Origin X: Beef products must have their country of origin on the label. (*Note: labelling takes this form when all processes have happened in the same country.)

  • ‘Process’ X: Beef products also must show how and where they were prepared.

  • Caught in X: Fish and shellfish products should state what part of the ocean they were caught in.

  • Country X: Fruit and vegetable products should show where they originated and also where they were processed.
  • Mix of EU, Mix of Non EU or Mix of EU and Non EU Fruit and Vegetables: If the product is a mixture of fruit and vegetables, country of origin labelling should follow this format.

In 2000 mandatory labelling was introduced for beef and veal due to health concerns that stemmed from Europe’s second BSE outbreak. Currently all meat products must have a health mark or an ID mark which states the country of origin.

Beef and veal products that are not sold loosely at retail level, are subject to more stringent, country of origin labelling laws, which include;

  • a reference number or code linking the meat to the animal or group of animals it came from
  • the Member state or non EC country of birth
  • the Member state or non EC country of rearing
  • the Member state or non EC country of slaughter
  • the Member state or non EC country of cutting
  • the approval numbers of the slaughterhouse and cutting plant(s).

As of December 2014 new food labelling laws will apply to meats such as swine, goat and poultry. New provisions for minced meat will apply as of January 2014. The EC also hopes to draft a report on the possibility of providing mandatory country of origin labelling for meats that are not as yet included, milk and milk used in dairy products, unprocessed foods, single ingredient products and also ingredients used that represent more than 50% of a food. Currently, there are also rules for regional products which are applied under the EU Protected Food Name Scheme. These are; Protected Designation of Origin (PDO): covers agricultural products and food which are processed and produced in a given geographical region.

Protected Geographical Indication (PGI): covers agricultural products and food that are closely linked to a particular geographical region, and where at least one of the stages of production has taken place in that region. Similar to Australia and the US, there are estimated to be significant costs involved in changing country of origin labelling. It is estimated that it is going to cost £7000 per product, in addition to the cost of training staff if food labelling laws were to change and become more stringent. Some consumers in the EU feel that if mandatory labelling is introduced for all meat and dairy, extra costs would be created for manufacturers without delivering additional food safety benefits to consumers.Recommendations Many recommendations have been considered by nations around the world as possible solutions to current food labelling problems. However, the issue is a complex one and a one size fits all approach appears unlikely to work. Consumer preferences are constantly changing, and are different for various demographics and age groups. Some consumers have been shown to be more concerned about where food is actually processed and manufactured, whereas others are more concerned about the origin of ingredients. The recent Senate inquiry into the food processing sector made a number of recommendations which are listed below. Each of these infers that current legislation on food labelling needs to be more transparent and provide better information for consumers.

Recommendation 7
The committee recommends that the government expand the application of food labelling requirements to require all primary food products for retail sale to display their country of origin, in accordance with Recommendation 40 of the Blewett Review.

Recommendation 8
The committee recommends that the government reform country of origin labelling requirements for food so that these requirements are clearer, more transparent and focus on the consumer’s understanding.

Recommendation 12
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.

Recommendations 12 and 7 are based on two recommendations stated below which are from the Blewett Review (2011). Both recommendations suggest that current legislation does not cover mandatory requirements for all primary produce and also that it does not look after the interests of the consumer.

Recommendation 40
That Australia’s existing mandatory country of origin labelling requirements for food be maintained and be extended to cover all primary food products for retail sale.Recommendation 41

Those mandatory requirements for country of origin labelling on all food products are provided for in a specific consumer product information standard for food under the Competition and Consumer Act 2010 rather than in the Food Safety Code.

Application of technology

Another recommendation arising from the recent Senate inquiry was Recommendation 11, which suggested the use of smart phone technology and barcodes on food labels.

Recommendation 11
The committee recommends that industry and government investigate the potential use of smart phone and barcode technology to provide additional information about the country of origin of food products.

Percentage and shading systems

The recent Senate inquiry also mentioned two options which have been suggested and seen as possible solutions by both the public and government, a percentage system or a shading system.

It is suggested that a percentage system could be applied where either the percentages relating to the country of origin of the top five ingredients used are listed for a product or a statement as simple as ‘Made in Australia from 70% imported and 30% Australian content’ could be used. This system does not mislead consumers about where a product is produced – yet may create problems about the recognition of local manufacturers who have processed the product.

The implementation of a shading system has also been suggested by industry and consumers, which is a simple visual representation that displays the percentage of ingredients used. An example of this would be the word ‘Australianand then shading out a letter for each 10% of imported ingredients used, here being 30% of imported ingredients used. This system is not as explanatory as a percentage system, but is a visual system that is simple and not deceptive.

The Senate inquiry suggested that many questions surround the implementation of both systems, such as: what about recognition for labour and manufacturing sectors, and the costs of implementing such systems? Theoretically, both systems seem to be possible and solutions to current food labelling issues but the practicality of employing either could potentially confuse consumers even more and have large costs.

Conclusion

Internationally, questions plague consumers, businesses and governments about the solution to current food labelling debates. There will always be discrepancies on the matter, either from a consumer’s perspective or from that of businesses within the food industry. The question that remains is: what is going to be the most cost effective solution for the greater good?

The answer ultimately must ensure the consumer is given a clear understanding of the origin of the food they are consuming, something not provided by the current system.

References

Australian Competition and Consumer Commission (ACCC) (2011), Country of origin claims and the Australian Consumer Law, ACT, available at: http://www.accc.gov.au/content/index.phtml/itemId/303666

Blewett, N, Goddard, N, Pettigrew, S, Reynolds, C, Yeatman, H (2011), Labelling Logic: Review of Food Labelling Law and Policy, Commonwealth of Australia, available at: http://www.foodlabellingreview.gov.au/internet/foodlabelling/publishing.nsf/content/labelling-logic

Parliament of Australia (2012), Inquiry into Australia’s Food Processing Sector, Commonwealth of Australia, available at: http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=foodprocessing_ctte/foodprocessing/report/index.htm

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