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Regulatory Update – July 2018

Home Insights Regulatory Update – July 2018

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Contributed by: Sarah Salmond and Felicity Ellis

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Published on: July 13, 2018

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Trans-Tasman reform of country of origin labelling rules for food products

The Primary Production Select Committee recently released its proposed changes to New Zealand's Consumers' Right to Know (Country of Origin of Food) Bill 2016. This alert summarises the proposed changes and the next steps in the legislative process. Submissions on these changes are due by 1 August 2018.

In addition, compliance with Australia's new country of origin labelling rules for food products became mandatory on 1 July 2018. If your business exports to, or sells products within, the Australian market, it is up to you to ensure that the labels on those products comply with the new labelling rules.

This client alert also summaries Australia's new rules and explains why they apply to New Zealand businesses (despite rumours to the contrary).

Australian changes

CoOL for food products has been mandatory in Australia for many years now. The outgoing requirements are set out in the Australian New Zealand Food Standards Code. 1 Australia's new CoOL rules are laid down in the Country of Origin Food Labelling Information Standard 2016 (Information Standard) under Australian Consumer Law.2 The main changes are that:

  • the labels for 'priority foods' that are grown, produced or made in Australia must include a logo (kangaroo in a triangle symbol), as well as a bar chart and text statement to show the proportion of Australian ingredients; and
  • most imported, packaged foods are now required to have the country of origin statement placed in a clearly defined box on the label.

The Australian Government guidance document includes a range of sample labels, including:

Whilst there has been some confusion as to whether or not the new CoOL rules apply to New Zealand businesses who export to, and sell products within, the Australian market, we consider that they do. Some parties have argued that the Trans-Tasman Mutual Recognition Arrangement (TTMRA) provides New Zealand with an exemption from the requirement to comply. We agree that the TTMRA generally provides that food exported to Australia from New Zealand is not required to be assessed for compliance with Australian food standards, particularly where those standards relate to "the way goods are presented, including for example requirements relating to their packaging, labelling, date stamping or age". However, we do not think that the TTMRA provides an effective exemption in this case as:

  • Section 16 of the Australian Commerce (Trade Descriptions) Regulation 2016 (Regulations) establishes that imported packaged food must bear a statement of the country of origin of the food determined in accordance with the Information Standard. The Commerce (Trade Descriptions) Act 1905 (Act) provides customs controls, which are explicitly excluded from the operation of the TTMRA.3 As such, food imported from New Zealand must comply with the Act and the Regulations, and hence Australia's new CoOL rules; and
  • The Ministry for Primary Industries' Overseas Market Access Requirements (OMARs) for Australia expressly state that the CoOL rules will become mandatory for New Zealand exporters from 1 July 2018. New Zealand exporters commit a strict liability offence if they fail to comply with any applicable OMARs.

Further information on the rules, including guidance documents and style guides, can be found here.

New Zealand changes

Currently, CoOL for food products is voluntary in New Zealand, with a notable exception for grape wine. Any voluntary claims made about a product's origin must not be misleading or deceptive.4 However, legislative change for CoOL is underway in New Zealand.

The Consumers' Right to Know (Country of Origin of Food) Bill was referred to the Primary Production Select Committee (Committee) on 12 April 2017. The purpose of the Bill is to provide a mandatory labelling system to allow consumers to make more informed decisions as to where certain products are grown, harvested, caught or raised. On 11 July 2018, the Committee issued an interim report with recommendations for an amended bill (Amended Bill). As a Private Member's Bill, it was anticipated that the Committee would consider it at length, and that significant changes would be made. Because of the extent of changes to the Bill, the Committee is seeking further feedback, before reporting the Bill back to the House.

Key features of the Amended Bill include:

  • A new definition for 'regulated foods', which includes foods that are:
    • only one type of fresh or frozen fruit, vegetable, meat, fish or seafood; and
    • fresh (even if previously frozen) or frozen and are not, for example, dried, cured, or pickled; and
    • no more than minimally processed (for example, by being cut, minced, filleted, or surface treated); and
    • packaged or unpackaged.
  • Provision for the Minister of Commerce and Consumer Affairs (Minister) to make exemptions for certain foods where it would be unduly onerous to comply.
  • A requirement for the Minister to recommend a 'Consumer Information Standard' (Standard) be introduced, which would set out the technical detail for compliance, including:
    • what it means for food to be 'minimally processed'; and
    • the requirements for how a disclosure is to be made (ie. specifications on labels or signage).
  • A grace period for businesses to comply with the Standard, once in force. This will be six months for fresh foods, and 24 months for frozen foods.

The new requirements for labelling would only apply to food sold by food retailers (online or otherwise), and would not apply to food sold by wholesalers, or to food sold in places for immediate consumption (ie. cafes and restaurants).

The Committee is now seeking feedback from submitters on the Amended Bill. Submissions are due by 1 August 2018. The final report is due on 29 August 2018. If enacted, the Minister would have 18 months to undergo further public consultation, and produce a Standard to be implemented by the Governor-General.

Further information on the Bill, including the process to submit, can be found here.

If you have any queries about this legislative change and its impact on your business, please get in touch with our Regulatory team.

FOOTNOTES
  1. Australia New Zealand Food Standards Code, Standard 1.2.11.
  2. Country of Origin Food Labelling Information Standard 2016.
  3. TTMRA, Schedule 1, Part 1.1(a) - Excluded laws.
  4. Section 13(j) of the Fair Trading Act states: "No person shall, in trade, in connection with the supply or possible supply of goods or services or with the promotion by any means of the supply or use of goods or services, make a false or misleading representation concerning the place of origin of goods."

This article is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact one of the partners listed below.

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