Product labeling update: Country of origin claims

In late 2018, the Federal Court found that imported fish oil and Vitamin D encapsulated in Australia could not be permissibly labelled as ‘Made in Australia’. These proceedings come as a timely reminder for businesses to ensure that any representations made about a product’s country of origin are clear, accurate, can be substantiated and meet mandatory labelling requirements.

General – Products other than Food

Under the Commerce (Trade Descriptions) Act 1905 (Cth), all products offered for sale, displayed or sold in Australia must be labelled with a trade description including its country of origin. Similarly, labels and packaging must not be misleading, deceptive or include false statements that are prohibited under the Australian Consumer Law (ACL). Representations about country of origin on labelling can include explicit statements about provenance and/or by implication from words and images used on packaging.

The ACL provides automatic defences (known as ‘safe harbours’) for representations made with respect to a product’s country of origin. These provide a useful guide for the standard that businesses must meet:

  • ‘grown in Australia’ – each significant ingredient or component of the good was grown in Australia, and all or virtually all production or manufacturing processes have occurred in Australia;
  • ‘product of Australia’ – Australia is the country of origin for each significant ingredient or component of the product, and all production or manufacturing processes have occurred in Australia; and
  • ‘made in Australia’ – the ingredients have been ‘substantially transformed’ in Australia. To meet this standard, the ACL prescribes that the product must be fundamentally different in identity, nature or essential character from its base ingredients. Notably, the recent Federal Court decision demonstrates that this is a factual question that will depend on the product and manufacturing process involved.

Further information and guidance on these representations can be found on the ACCC website at this link. See also our previous update on the ACCC guide for complementary healthcare products at this link.

Food Products

For most food products offered for sale, displayed or sold in Australia, the Country of Origin Food Labelling Information Standard 2016 (the Food Labelling Standard) applies, making country of origin labelling compulsory (see previous updates here and here). These obligations vary depending on whether the type of food is considered a ‘priority food’ e.g. meats, fresh fruit and vegetables, and whether it was grown, produced, made or packed in Australia.

At a high level, these requirements are:

  • priority food grown, produced or made in Australia – using the prescribed three component standard mark, which consists of a prescribed kangaroo logo, a bar chart showing the proportion of the product that uses Australian ingredients and a statement identifying whether the food was grown, produced or made in Australia with the relevant percentage of Australian ingredients;
  • priority food packaged in Australia – using the two component standard mark, which consists of a bar chart showing the proportion of the product that uses Australian ingredients and a statement identifying that the product was packed in Australia with the relevant percentage of Australian ingredients; and
  • priority and non-priority food grown, made, produced or packaged outside Australia – a text only label that indicates the country of origin.

Further information and guidance on the Food Labelling Standard can be found on the ACCC website at this link.

Country of origin information has been found to have a significant impact on consumer decisions in Australia, particularly for food products. It is therefore likely to be an enforcement area closely watched by the ACCC in the near future.

This post was co-authored by Matthew Rozario (Seasonal Clerk), Valiant Warzecha, Jessie Buchan and Melinda Upton.