Country of Origin: Data to Back Up Your Claim

Chris Preston, Senior Consultant, ComplyANZ

 

As we approach the zero hour for country of origin labelling, I hope you are starting to breathe a sigh of relief rather than descending into abject panic.  Whichever you may be feeling, it is worthwhile reviewing the data exercise that necessarily will accompany origin labelling into the foreseeable future. because the data is what substantiates your claim and can change far more rapidly than you can change labelling.

 

Let’s do a brief recap: there are mainly three classes of claim under the new requirements-

*        “Product of Australia”, which must be 100% Australian ingredients and food additives (processing aids may be imported), with any overseas processing declared.

*        “Made in Australia” which can be EITHER a minimum Australian content or an average Australian content claim, again with overseas processing declared.

*        Imported, which has many labelling options including declaration of Australian ingredients and/or Australian packaging.

 

So what are the data requirements for each?

 

Product of Australia claims require evidence that the ingredients and any additives are Australian.  This does not mean they are Australian 99% of the time, it means all the time for every batch.  This means there are two key risks - first, are your existing Australian supply chains secure against natural (and man-made) events ranging from floods, fires and cyclones through to electricity infrastructure fails and terrorist strikes?  What are your contingency plans to maintain Australian supply in the face of such events?  Secondly, how will you know if your suppliers shift from being 100% Australian to blending or using imported ingredient, either for cost reasons or short local supply?    This does happen, and unless your suppliers know the consequences of supplying you with mixed product they may not even be aware that they may be creating a compliance problem for you. Have you told your suppliers that you are using a “Product Of Australia” claim and therefore prefer short or ceased supply rather than being supplied blended or imported product?  In this brave new world of origin labelling (where the fines can exceed $1 million) you need to have such issues firmly nailed down as well as have contingency plans ready to deal with times when things go wrong.

 

Made in Australia claims also require substantiating evidence.  If you are making an average content claim, you must have historical data of a continuous 1, 2 or 3 year period that ends no later than 2 years prior to the date of packaging, providing the basis for your average content claim.  Note that this requires ‘rolling’ data collection as well as labelling changes to maintain an ‘average content’ claim - the data supporting the claim cannot be more than 2 years old at any one time, and as the data changes, your claim will also need to change.  Remember too that with an average claim, you need a consumer contact mechanic to inform consumers about the Australian content of the food they bought, so you will in any event need to maintain batch by batch Australian content data   If, one the other hand, you are making a minimum content claim, you face similar issues to the “Product of” claim discussed above - because you are stating a threshold and guaranteeing that the Australian content will never fall beneath that threshold even in times of flood, fire or other intervening events.  So again, the questions are how will you know if your suppliers switch from Australian to imported ingredients, and what contingency arrangements have you in place to deal with changed supply arrangements should they eventuate? Don’t be too surprised if, come 1 July, there are a lot of products with surprisingly low minimum content declarations, because such declarations must take into account everything from seasonal availability, crop failures, through to truck crashes on the Hume Highway that might disrupt supply.

 

Imported claims might be considered the lowest risk, unlikely to be a high priority for regulators, but that does not mean that brand owners can neglect the data requirements that exist to substantiate such claims. For example, a claim that a food is “Packed in Australia from multiple origins” requires evidence that the food is in fact the product of more than one country, and in particular that it was not substantially transformed (ie made in) just one country - because the label must state the country of manufacture in such circumstances.  It may provide a costly mistake for a brand owner to assume that the ACCC is not interested in pursuing such claims, especially where the effect is to hide the origin of a food behind the ‘packed in Australia’ moniker.

 

The precise data you need to substantiate your claim will depend on the claim you make and the nature of your product, but the key to compliance is to turn your mind to the potential for problems to arise and consider what can be done to ameliorate the risk or make contingency plans to deal with it.  In the mad rush to get across the country of origin labelling finishing line, the focus can narrow down to the label needed for our product today, when it needs to be lifted up to consider what might happen tomorrow.