Contaminated berries highlight some major issues for Australian agriculture

Published 20150217

The revelations over recent days that imported frozen berries appear to be the cause of hepatitis in a number of cases in Australia over the past week brings into focus two very important issues for Australian agriculture – country-of-origin food labelling and the brand image of Australian-grown products. Both provide potential for Australian-grown products to gain a competitive advantage, but both require industry and government action, which has been somewhat lacking in recent times.

The outbreak of hepatitis associated with the consumption of a particular brand of frozen berries that are imported into Australia and marketed by an Australian-based food company through major Australian supermarket chains has caused major consternation in the media, (see here, here, here) with particular emphasis on the source of the berries, and the fact that they are not ‘inspected’ on arrival in Australia. There is also a sense that some of the commentators are of the view that consumers were tricked into believing they were Australian products, when that was not the case. In fact, if the packaging is examined closely, there is “Product of China” noted in modest-sized writing at the bottom right side of the pack (see below). Whether consumers are likely to read that information is another question.

It should be noted that the issue of country-of-origin labelling is not confined to Australia. The product below to all intents and purposes comes from New Zealand, but one has to look very carefully at the bottom left of the packet to identify that the product was actually grown in the USA.

Governments, food processors and retailers have long resisted additional regulations to clarify a product’s country-of-origin, for a number of reasons. These include the need to comply with international trade agreements, the difficulties associated with multiple-component products, and the desire for flexibility in international sourcing. There is also some risk of a tit-for-tat response by other nations that Australia exports to, if Australia ups the ante in relation to food regulations here in Australia. Nevertheless, it seems reasonable to suggest that most consumers would think theat the above labelling examples at least make it difficult for consumers to identify country-of-origin, and are potentially misleading.

The flip side of this issue is the question of why should consumers seek out or select produce grown in Australia, in preference to products sourced from overseas? Clearly, in many cases overseas-sourced goods are cheaper or more readily available, as evidenced by the fact that Australia imports approximately $12 billion worth of food products each year, with much of this destined for supermarket home-brand lines that are gradually increasing their market share at the expense of local brands.

While incidents like the frozen berry episode that is currently in the news give consumers a good reason to select Australian produce, the rush of patriotism is unlikely to be long-lasting unless consumers are provided with clear and positive messages about the merits of Australian products. In a week or so this incident will have disappeared from front pages and news bulletins, and consumers will go back to their previous purchasing habits, with most indifferent to the origin of the food products they purchase.

 This raises the issue of “Brand Australia”, which was the subject of a recent edition of the Institute’s Farm Policy Journal. In it, contributors debated the merits of a strong and positive campaign directed at consumers explaining why Australian produce should be preferred over produce from other regions. The logic underpinning this approach is that if Australian (and overseas) consumers are provided with very strong positive reasons to actively select Australian produce, then the need for increasingly prescriptive regulations associated with country-of-origin labelling potentially diminishes. Instead, consumers will more frequently demand that they be able to clearly identify Australian products, and will be more likely to actively select these in preference to imported products. This, in turn, will provide stronger incentives for Australian food processors and retailers to source Australian produce, and to clearly identify the origin of those products.

Of course, in order for this to occur there would need to be good agreement between government and industry about the merits of the proposal and how it should be funded, and widespread agreement amongst Australian farmers about the need to positively promote the merits of Australian-grown products. Whether this would ever happen is the multi-billion dollar question!

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