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2013-2014-2015
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
THE SENATE
Competition and Consumer Amendment (Australian Country of Origin Food
Labelling) Bill 2015
EXPLANATORY MEMORANDUM
(Circulated by authority of Senators Christine Milne and Nick Xenophon)
Competition and Consumer Amendment (Australian Country of Origin
Food Labelling) Bill 2015
Outline
The Competition and Consumer Amendment (Australian Country of Origin Food Labelling)
Bill 2015 implements important reforms to the designation and regulation of country of
origin labelling for food in Australia. This Bill mirrors one introduced in 2013, which lapsed
at the end of the of the 43rd Parliament.
It is widely recognised that Australia's current country of origin labelling requirements for
food are unsatisfactory and include information that confuses and misleads consumers. This
was confirmed by the independent review of food labelling law and policy, chaired by Dr
Neal Blewett, in the review's report Labelling Logic (2011),1 and by subsequent independent
research carried out by the consumer advocacy organisation, CHOICE.2
There are two key parts to the amendments put forward in this Bill. The first enacts
Recommendation 41 of the Blewett Review, by creating a specific section in the Competition
and Consumer Act 2010 (Competition and Consumer Act) that deals solely with country of
origin claims with regard to food.
The new provisions create a single regulatory regime for most kinds of unpackaged and
packaged food, retaining mandatory labelling requirements, but superseding the country of
origin labelling requirements currently in the Food Standards Australia New Zealand Act
1991.
The second part of this Bill enacts recommendations arising from the Senate inquiry into
Senator Milne's private senator's Bill, the Competition and Consumer Amendment
(Australian Food Labelling) Bill 2012.3 These amendments extend country of origin food
labelling requirements to all packaged and unpackaged food for retail sale and clarify and
restrict the range of labelling (and the meaning of key terms in country of origin labelling) to
three kinds of claim. These changes simplify the system and provide greater transparency for
consumers.
Key amendments provide new stipulations about the definition and wording of claims
regarding food manufacturing in Australia; and are accompanied by a requirement to use the
term Manufactured in Australia rather than Made in Australia. This reflects consumer
research that demonstrates that consumers find the words Made in Australia confusing and
think it refers to the origin of the content that is additional to local manufacture.
Manufactured is a more clearly understood term that removes this confusion.
1 http://www.foodlabellingreview.gov.au/internet/foodlabelling/publishing.nsf/content/home
2 Submission 31 found at
http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Rural_and_Regional_Affairs_and_Transpor
t/Completed%20inquiries/2012-13/foodlabelling/submissions.
3
http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Rural_and_Regional_Affairs_and_Transpor
t/Completed%20inquiries/2012-13/foodlabelling/index.
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The Bill also removes the ability to make qualified claims such as Made from local and
imported ingredients that have been shown to be particularly misleading and uninformative
for consumers, and replaces them with the claim of Packaged in Australia, which reflects
the situation where food has minimal Australian processing.
NOTES ON CLAUSES
Clause 1 - Short Title
This is a formal provision specifying the short title.
Clause 2 - Commencement
This clause provides that the Act will come into effect the day after the end of the period of
12 months after the Bill receives Royal Assent. The 12 month period has been provided to
allow sufficient time for affected businesses and organisations to transition to the new
labelling requirements.
Clause 3 - Schedules
This clause provides that an Act that is specified in a Schedule in amended or repealed as set
out in that Schedule, and any other item in a Schedule operates according to its terms.
Schedule 1--Amendments
Competition and Consumer Act 2010
Item 1
Item 1 inserts a new definition of country of origin labelling requirements in subsection 2(1)
of Schedule 2 to the Competition and Consumer Act 2010.
Item 2
Item 2 inserts a new definition of food in the Competition and Consumer Act 2010. The
definition mirrors the definition of food in the Food Standards Australia New Zealand Act
1991.
Item 3
Item 3 inserts Part 3-4A - Country of origin labelling requirements for food, which comprises
new sections 137A, 137B and 137C.
Section 137A designates two overarching categories of unpackaged and packaged food--that
which contains some Australian content or has some level of processing in Australia, and that
which does not.
Subsection 137A(1) explains that the table in subsection 137A(3) specifies country of origin
labelling requirements for particular kinds of packaged and unpackaged food.
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Subsection 137A(2) specifies that certain packaged and unpackaged food not covered by the
items in the table in section 137A may be subject to country of origin labelling requirements
in section 255.
Subsection 137A(3) includes a table which has 6 items. The items in the table specify country
of origin labelling requirements for certain packaged and unpackaged food as follows:
Item 1 in the table stipulates that packaged food where all the significant ingredients
are Australian, and where all processing is in Australia, must be labelled with either
Product of Australia or Produce of Australia. This is the same as the current claim
standard for these labelling terms.
Item 2 in the table stipulates that packaged food that is substantial transformation in
Australia by way of processing (see subsection 137A(5)) and where at least 50% of
the cost of that transformation is incurred in Australia, must be labelled with
Manufactured in Australia or Australian Manufactured. This replaces the current
Made in Australia claim with a new term Manufactured in Australia, which is a
more commonly understood term and is not conflated in a way that conveys the origin
of the food ingredients. This item effectively removes the ability to make qualified
claims such as Made in Australia from local and imported ingredients.
Item 3 in the table stipulates that all other packaged food that has minimal processing
in Australia, but is not substantially transformed in Australia, must be labelled
Packaged in Australia. This item therefore removes the ability to make qualified
and non-specific claims such as Packaged in Australia from local and imported
ingredients.
Item 4 in the table makes provision for the labelling of any significant ingredients of
Australian origin in the country of origin labelling, for example, Manufactured in
Australia with Australian peanuts. This item therefore makes specific provision for
packaged food with significant Australian content that is unable to make other
Product of claims for the purpose of highlighting local content.
Items 5 and 6 in the table extend mandatory country of origin labelling to all
unpackaged food for retail sale in Australia, subject to the exemptions detailed in
subsection 137A(4). Items 5 and 6 in the table stipulate the country of origin claims
available for unpackaged food for retail sale that has been grown in Australia, and for
some imported unpackaged food label requirements. In addition to Product of
Australia and Produce of Australia claims, it also allows the term Grown in
Australia to be used in identifying the country of origin.
Subsection 137A(4) provides further clarification to the claims that cannot be made about
unpackaged food that is displayed for retail sale.
Subsection 137A(5) stipulates a list of processes that do not, of themselves, qualify as
substantial transformation of food.
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Subsection 137A(6) provides a definition of what is meant by food being grown in a
particular country.
Section 137B deals with the relationship between amendments in this Bill and other labelling
requirements. It specifies that the new country of origin labelling requirements for food
prevail over existing requirements under the Food Standards Australian New Zealand Act
1991 and the Trade Marks Act 1995 and details exemptions relating to the Wine Australia
Corporation Act 1980.
Section 137C creates new civil penalty provisions for contraventions of the new food
labelling requirements, and incorporates exemptions from penalties for food that is supplied
or intended to be supplied for immediate consumption by particular institutions such as
restaurants and state facilities.
Items 4 and 5
Item 5 comprises new Part 4-4A (new section 204A), which details new criminal penalties
for not complying with food labelling requirements relating to country of origin. These
penalties are consistent with penalties for other contraventions of information standards
covered by the Competition and Consumer Act 2010.
Item 5 is consequential to item 4.
Items 6 and 7
Item 6 amends section 210. It extends existing defences in the Competition and Consumer
Act 2010 involving goods acquired for the purpose of re-supply to the food labelling
requirements offence in section 204A. Item 7 is a consequential amendment.
Items 8 and 9
Items 8 and 9 amend section 224 to apply pecuniary penalties for contravention of section
137C, and apply the same penalties as apply to other contraventions of information standards
in the Act.
Item 10
Item 10 amends section 248 to enable a court to disqualify a person from managing a
corporation for a period if the court is satisfied that the person has contravened, attempted to
contravene or been involved in a contravention of section 137C.
This applies the same power available to the court in relation to other contraventions of
information standards covered by the Act.
Items 11, 12, 13 and 14
Section 252 provides a defence for contraventions relating to safety and information
standards involving consumer goods acquired for the purpose of re-supply. Items 11 to 14
amend this section to extend the defence to contraventions of food labelling requirements
where the food was acquired for the purpose of re-supply.
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Item 15
Item 15 inserts a new section 254A to stipulate that, for packaged and unpackaged food not
covered by subsection 137A(3), the provisions in section 255 may nevertheless apply.
Imported Food Control Act 1992
Items 16, 17 and 18
At present the Imported Food Control Act 1992 reflects the Australia New Zealand Food
Standards Code Standard 1.2.11. As this Bill will over-ride Standard 1.2.11, items 16, 17 and
18 amend the Imported Food Control Act so that its measures pertaining to country of origin
food labelling reflect the Competition and Consumer Act amendments in this Bill.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Competition and Consumer Amendment (Australian Country of Origin Food
Labelling) Bill 2015
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the Bill
The Bill amends the Competition and Consumer Act 2010 to create new provisions
specifying new definitions and standards with regard to the country of origin labelling on
packaged and non-packaged food.
Human rights implications
This Bill engages article 11 of the International Covenant on Economic, Social and Cultural
Rights (ICESCR), which acknowledges the right to an adequate standard of living, including
food.
The UN Committee on Economic, Social and Cultural Rights has noted that
'the core content of the right to adequate food implies ...[t]he availability of food in a
quantity and quality sufficient to satisfy the dietary needs of individuals, free from
adverse substances, and acceptable within a given culture'.
Providing consumers with detailed information about the origins and content of the food,
through clear labelling, should be considered a promotion of the right to food, as well as of
the right to health.
The Bill creates the possibility of a new civil offence penalty for a contravention of section
137C of Schedule 2 to the Competition and Consumer Act 2010.
(1) A person must not, in trade or commerce, supply food of a particular kind if:
(a) a country of origin labelling requirement applies to food of that kind; and
(b) the food does not comply with that requirement.
Note: A pecuniary penalty may be imposed for a contravention of this subsection.
(2) A person must not, in trade or commerce, offer for supply food the supply of
which is prohibited by subsection (1).
Note: A pecuniary penalty may be imposed for a contravention of this subsection.
(3) A person must not, in or for the purposes of trade or commerce, possess or
have control of food the supply of which is prohibited by subsection (1).
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Note: A pecuniary penalty may be imposed for a contravention of this subsection.
The Bill applies the same penalties as those that apply to other contraventions of
information standards in the Act.
The Parliamentary Joint Committee on Human Rights' Guidance Note 2 notes that civil
penalty provisions may engage criminal process rights under Article 14 of the International
Covenant on Civil and Political Rights. The three criteria for assessing whether a penalty
could be considered a criminal penalty for the purposes of human rights law are:
the classification of the penalty in domestic law;
the nature of the penalty; and
the severity of the penalty.
Classification
The penalty in this Bill is defined as a civil penalty under domestic law. Failure to comply
with the civil penalty provisions in the Bill would not result in a criminal conviction and a
breach of the civil penalty provisions would not attract the penalty of imprisonment.
Nature of penalty
The purpose of the penalty is to ensure compliance with labelling requirements. It is to be
applied to a specific group of people: the vendors and producers of food products within
Australia. The Parliamentary Joint Committee considers that penalties directed at regulating
members of a specific group are disciplinary rather than criminal. As such, the nature of
the penalty proposed in this Bill should be considered to be civil rather than criminal.
Severity of penalty
The Bill does not set a value on the penalty to be applied, however, it is envisaged that a
penalty would be set which is not unduly severe but acts to ensure food vendors and
producers comply with the requirements for food labelling. The penalty's value should not be
higher than that for a corresponding criminal offence and the penalty would not carry a
sanction.
Conclusion
This Bill is compatible with human rights in that it promotes the rights set out in article 11 of
the International Covenant on Economic, Social and Cultural Rights (ICESCR), and imposes
penalties for infringement on this right. The civil penalty included in this Bill is also
compatible with human rights.
Senators Christine Milne and Nick Xenophon
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