News & Insights

Food product labelling test case: renewals must meet updated criteria

Published 24 January 2019

The recent ruling on an Australian fish oil capsule manufacturer’s right to use the Made in Australia kangaroo logo shows that precedent is not a reliable guide when it comes to licensing regulations.

Complementary medicine products are not required by law to carry country of origin labelling but manufacturers who choose to make claims about where their product is made need to be aware that legislation may have changed since they obtained their Made in Australia label licence from the Australian Made Campaign Limited (AMCL).

Amendments to Australian consumer law in 2017 stipulate that imported goods must be “substantially transformed” by processing in Australia to be eligible for licensing to use the Made in Australia logo. In the case of the fish oil capsules, the manufacturer contested the AMCL’s rejection of a licence renewal in the Federal Court. The court ruling found that addition of a vitamin and encapsulation did not equate to substantial transformation of the imported product.
 

shopper-checking-product-label

 

This is the first case based on the substantial transformation premise since the law was amended and provides some useful guidelines for the test.

  • The test requires a fundamental change to the essential characteristics of the collective imported ingredients when compared with the finished product.
  • The criteria for comparison are whether the collective imported ingredients are different in nature, identity or essential character.
  • When assessing these factors in comparing the finished product with the imported ingredients its essence or true nature should be considered.

In this instance the oil remained an oil, albeit in encapsulated and enhanced form.

“This change in law has caused much confusion and angst for many manufacturers,” Gallagher Head of Food Production Stephen Elms comments.

“Since the amendments were rolled out in 2017, this issue has been a hot topic in the halls of the Australian Competition and Consumer Commission (ACCC) and AMCL. This ruling, while frustrating for Nature’s Care, has finally clarified the position under law.”

Elms says that ultimately this ruling will be good for all manufacturers of homegrown products, or who alter imported products, because it demonstrates the position on complying with local regulations aimed at meeting the goal of providing safe and quality products for Australian consumers.

Guidelines to country of origin labelling can be found on the Australian Competition and Consumer Commission (ACCC) website.
 

Talk to our experienced food production insurance experts

Specialised industry knowledge means a food production insurance expert can identify the potential risks presented by the processes involved as well as the roll-on effects, such as the need for product recall, and collateral damage, to reputation, for example, and formulate a risk management and insurance cover program accordingly.

 

Our team of food production specialists calls on the Gallagher legacy of 75+ years in servicing food production enterprises, which means that whether you are a primary producer, in processing, transit or grocery wholesaling, we have deep understanding of the risks associated with each step of the supply chain and how to manage and mitigate them. 
 

Find out more about our food production expertise

 

Further reading

Food production insurance and risk management expertise

Insurance market update: food production challenges from farm to table
 


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