- Posted by DLA Piper Retail Thera-IP Team
- On 9 August 2018
The Australian Competition and Consumer Commission (ACCC) released a guide earlier this year on country of origin labelling in relation to complementary healthcare products. However, unlike the labelling requirements for food products (see our post from July on the commencement of the Country of Origin Food Labelling Standard available here), it is not compulsory for the healthcare industry to label their complementary healthcare products with county of origin information.
‘Complementary healthcare products’ is a term used by the ACCC to refer to ‘Therapeutic goods consisting wholly or principally of one or more designated active ingredients.’ An active ingredient is a component of the product which causes a physiological or pharmacological action caused by the therapeutic good. Some examples include vitamins, mineral and nutritional supplements, herbal and homeopathic medicines and aromatherapy products.
Despite the fact that it is not mandatory to include country of origin labelling, any business which decides to make an origin claim about a complementary healthcare product must ensure that the information is clear, accurate and not misleading. It is up to the business to decide how detailed or explicit they wish to make their claims.
However, if a business decides to include an origin representation and it is false, misleading or deceptive, the business risks breaching the Australian Consumer Law (ACL) which can attract a penalty fine of up to $1.1 million. Whether a claim constitutes such a breach is determined on a case-by-case basis, that is, the particular circumstances of the case and the overall impression created by the claim.
For example, if images or words are used on a label indicating that the product originated from a particular country when it does not, this may constitute a breach of the ACL. Or if a label includes a claim in relation to one of its many ingredients, such as ‘Made with Eucalyptus oil’, it must be made clear that the claim is only in relation to that individual ingredient and not mislead the consumer into thinking the entire product is made from eucalyptus oil.
The guidance provided by the ACCC in its ‘Country of origin labelling for complementary healthcare products – a guide for business‘ outlines the safe harbor statutory defences afforded to businesses. Claims and representations which come under these defences include those in relation to goods which are:
- ‘Grown in’ or or a ‘Product of’ a particular country: if each significant ingredient was grown in/originated from that country as well as all the processes regarding the production or manufacture occurred in the same country.
- ‘Made or manufactured in’ a particular country: if the product underwent its last substantial transformation in the particular country. ‘Substantially transformed’ means grown or produced in or, ‘As a result of one or more processes undertaken in that country, the end product is fundamentally different in identity, nature or essential character from all of its imported ingredients or components.’ In relation to substantial transformation, the guide considers dry blending, encapsulation, tableting, herbal extractions, essential oils and semi-solid formations.
Key points to takeaway
- Should your business decide to include an origin claim or representation about a complementary healthcare product, bear in mind that any determination of a breach of the ACL will depend upon the individual circumstances of the case.
- The ACCC guide is not legally binding, nor is it compulsory to include an origin claim. Businesses should seek independent legal advice when deciding how to label their products.
- Ensure that your business maintains/obtains the relevant evidence should it need to rely upon any of the above safe harbor defences.
- In addition to the ACCC guide and the ACL, businesses should also ensure that any labelling of their healthcare products complies with the Therapeutic Goods Advertising Code, Therapeutic Goods Act 1989 and the Therapeutic Goods Regulations 1990.
This blog was co-authored by Josephine Gardiner, Jessie Buchan and Melinda Upton.