For this section the Institute invites comments from two differing policy viewpoints. In this edition Jackie Healing, from Coles, and Dr Sharman Stone, the Federal Member for Murray, discuss Australia’s current food labelling laws and and whether country of origin information is misleading to consumers.

 

Understanding Country of Origin Labelling (CoOL)

Jackie Healing

General Manager: Quality, Responsible Sourcing and Technology, Coles supermarkets

Coles’ research shows that our customers are increasingly concerned about where their food comes from and want clear and concise labelling to help them understand this.

This research shows that our customers are more likely to trust food which is grown or made in Australia.

Quite simply, consumers consider food is fresher and safer if it is produced locally and statistics indicate that 70% of Australians want to buy locally-made food.

To meet this need at the supermarket, Coles has an Australia-first policy whereby we seek to buy Australian produce first and foremost whenever it is available in sufficient quantities, at great quality and at a fair and reasonable price.  

As a result, around 96% of all of our fresh fruit and vegetables are Australian grown and 100% of our fresh meat from the meat department, fresh milk and eggs are Australian, but ensuring the local food is available is just one way we can give customers choice.

Another important way we can help customers to make informed decisions about what they buy is through labelling.

It is clear that consumers are dissatisfied with the current labelling laws, particularly as they relate to Made in Australia claims associated with packaged and processed foods, and seek a labelling regime which provides greater clarity.

Coles strongly supports clear and unambiguous food labelling so our customers can make those informed choices about the food they place in their shopping basket.

In fact, we have gone above and beyond the Country of Origin legislative requirements contained in the Food Standards Code by including additional country of origin information on product packaging and at point of sale.

For example, Coles currently includes Country of Origin labelling on all fresh food in our delicatessens, despite the Food Standards Code only requiring Country of Origin labelling on certain mandatory products.

We have also supported the Food Standards Australia New Zealand proposal to extend Food Standards Code to other products such as lamb, chicken, beef and veal.

To help our customers understand the country of origin of the fresh food we sell, we have made our fresh sourcing information publicly and readily available on the Coles.com.au website.

However, our research tells us that some consumers find the current food labelling laws unclear and confusing, particularly the ‘Made in Australia’ claim for food products.

A common misconception is that Made in Australia implies the product is grown in Australia. This isn’t the case.

The criteria for the ‘Australian made’ label, requires the product to be ‘substantially transformed in Australia and at least 50% of the cost of production has been incurred in Australia.’

According to this definition, substantially transformed can include curing or crumbing so imported ham for example, that is cured in Australia, qualifies for the Made in Australia label.

By contrast, to be applicable for ‘Product of Australia’ label, ‘all of the product’s significant ingredients come from Australia, and all or nearly all of the manufacturing or processing is also carried out in Australia.’

To address consumer concerns, Coles supports a higher threshold for the Made in Australia label. We also support the removal of ‘cured’ and ‘crumbed’ from the definition of ‘substantially transformed’ so the label is more aligned to customer expectations.

In making any legislative changes, however, it’s also important that a reasonable timeframe for transition is built in and that they do not unnecessarily burden Australian food manufacturers who already face high production costs and significant regulatory compliance costs.

At the end of the day, any changes to food labelling need to support Australian manufacturers – rather than simply add to their costs – while at the same time help consumers make an informed choice at the supermarket.

Jackie Healing studied Food Science at Reading University in the United Kingdom (UK). She spent 20 years working at Sainsburys (UK) where she managed various retail quality and product development streams in the UK, United States and Asia. Culminating in her role as head of Quality and Product Development, leading a team of 60 technologists and product developers, in the major growth categories of fresh foods.  

In 2006 she was recruited by Coles supermarkets to lead their Quality Program for their private label ranges. She has successfully implemented farm to fork QA and responsible sourcing programs across all food and non-food categories, including: the development of health and clean ingredient product ranges, the establishment of a leading ethical sourcing platform in developing countries, a review of on-pack labelling and health messages and establishing industry leading programs in animal welfare and sustainable seafood.

Jackie is president of the Sustainable Agriculture Initiative – Australia and a member of the Advisory Panel for Australian Pork’s QA program – APIQ.

 

 

Australian labelling laws: too confused and complex

Dr Sharman Stone

Federal Member for Murray, Liberal Party of Australia

Do people really care about where their food comes from? It seems we do and increasingly. Country of Origin labels (CoOL) prompt consumer values related to food safety, quality, freshness and an interest in supporting local farmers, industry and jobs.

The Department of Industry, noting growing Australian consumer interest has tried to hold the ground asserting: ‘The CoOL framework is not intended to support Australian producers… Also the CoOL framework is not intended to be a proxy for food safety.’(1)

However, the recent response to the ‘Buy SPCArdmona Sunday’ campaign saw a twitter site receive more than 20.4 million impressions over three weeks and sales leapt over 60%, clearly not driven by price, but by consumers wanting to support home grown.

United States (US) feed-lotters and meatpackers, and Canadian and Mexican cattle suppliers are at war with US beef producers who are winning the right to have eligible product carry the label ‘Born, raised and slaughtered in the USA’. The Mexican and Canadian interests took their case to the WTO arguing that their product was being accorded less favourable treatment status, and the Codex (2) framework supported them. The US Department of Agriculture responded with even more descriptive labels arguing the need for truth in messaging and the rights of customers to know.  

Australian consumers are also beginning to demand truth in food labelling, whether related to nutrition or the source, despite the plaintive cries of extra cost and inconvenience which has helped bureaucrats, importers and some manufacturers hold the line for decades. What is lawful in Australia leaves the consumer uninformed, confused and increasingly angry.

According to the Australian Competition and Consumer Act 2012, section 255, schedule 2 to make: ‘A representation as to the country of origin of the goods’ (eg Australia), (a) the goods have to have been substantially transformed in that country (meaning), (b) 50% or more of the total cost of producing and manufacturing the goods is attributable to production or manufacturing in that country (eg Australia). ‘Total cost’ can include overheads, labour and any other inputs. ‘Substantial transformation’ can mean adding water to Brazilian juice concentrate, crumb coating Thai fish fingers, or curing Danish ham.

According to the ACC Act, you can also claim that goods were grown in Australia, when in fact they were, or (d) when ‘50% or more of that total weight of the goods is comprised of ingredients or components that were grown and processed’ (in Australia). However, law complying food sellers may still get into trouble because our legislation also requires their labels to be ‘authentic’ and not ‘misleading’.

The ACCC has therefore suggested businesses use ‘safe havens’ like: ‘made from local and imported ingredients’ where for example, at least half of the ingredients are local (which is not terribly edifying.) Many importers are ‘safe’ anyway, FSANZ (3) lists all of the foods that are exempt from CoOL. A recent Select Senate Inquiry (4) called this list ‘illogical and unacceptable’. I agree.

Our CoOL regime is also made non-transparent and complex by multiple jurisdictions, overlapping regulations, exemptions and the NZ-Aus CER (5) interplay, all overshadowed by the 50 year old Codex Alimentarius. This 1963 WTO framework allows that if food from one country is processed in a second which changes its nature then the second country is regarded as the country of origin for the purpose of the standard. (6) This is no longer acceptable to many Australian consumers and producers nor to beef eaters in the US.

New Zealand (NZ) does not mandate CoOL but its regulators require that any labels used are accurate. There is growing controversy about some imported mixed origin food being labelled ‘made in NZ’. (7) A submission to the recent Senate Inquiry (8) described the complexities when pursuing truth in CoOL:

[A] seafood product was being caught in the Atlantic Ocean, frozen at sea on a Korean vessel, landed in China for first stage processing, imported into New Zealand, repacked as product of New Zealand and then shipped to Australia to be thawed, reprocessed and crumbed here. The product was sold in Australia as ‘Product of Australia’ competing against Australian-caught fish from the local fishery on an equal basis.

Australian enterprises, including pig meat producers, honey, dairy, fruit and vegetables, fish and bakery businesses cannot maximise the value of their investment in humane, sustainable and clean production as long as our current CoOL regime persists.

All Australian sold foods should have unambiguous and truthful country of origin labelling. ‘Substantial transformation’ should no longer be used to hide the source of key ingredients. It’s not all that hard, it is not all that expensive and nothing less will do.

Dr Sharman Stone’s PhD analysed international food trade strategy. Her Master’s in Rural Sociology predated work in the Rural Water Corporation and Department of Agriculture. Before entering parliament in 1996 as the Member for Murray, she was Manager for International Development at Melbourne University. She has written extensively on Race Relations and Rural Development. Sharman held various portfolios as Parliamentary Secretary, Minister or Shadow Minister from 1998 to 2010.

Footnotes

1. Dept of Industry Submission no. 20, to House of Reps Standing Committee on Agriculture and Industry, Inquiry into Country of Origin Labelling for Food, p. 6, May 2014.
2. Codex Alimentarius, the 1963 WTO framework, giving CoOL guidance, especially CODEX STAN 1-1985, cl. 4.5.
3. Food Standards Australia and New Zealand standard no. 1.2.11.
4. The Select Senate Inquiry on Australia’s Food Processing Sector 2012 , p. 80.
5. Australia-NZ Closer Economic Relationship.
6. CODEX STAN 1-1985, cl. 4.5.
7. The Select Senate Inquiry on Australia’s Food Processing Sector 2012 p. 94–5.
8. The Select Senate Inquiry on Australia’s Food Processing Sector 2012, p. 95.  

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Images: Dairy Australia