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ECONOMICS LEGISLATION COMMITTEE - 30/10/2009 - Food Standards Amendment (Truth in Labelling Laws) Bill 2009

Senator Hanson Young —One of the things that we have been talking about today is how we can be clearer in labelling to ensure that consumers get the information that they need in order to make an informed choice. Would you be able to explain what the rules are around using iconic Australian things like the Australian flag or using the words ‘Australia’ or ‘local’ and how that plays into the legalities of what is actually then in the product?

Mr Ridgway —The ACCC looks at allegations or possible concerns about misrepresentation, for example, with respect to labelling, amongst other things—and I should note of course that the TPA covers the whole market and all forms of promotion and conduct in trade or commerce. When we look at particular representations they can be in the form of logos, maps, images or words and phrases—and often they are a combination of the whole lot of those. We will look at the overall ‘get up’ for want of a better term of the particular representation and look at what impression, in our view and likely to be in the courts’ view, that combination of images and words is giving to its consumer audience. We would ask: what is there on the label and what is the impression that flows from that?

Mr Weymouth —I would add that the important analysis we will be doing is looking at what is the representation. We have nothing prescriptive about when you can or cannot use a map, a flag or a symbol; it is a question of what is the impression that is being delivered and what is the representation that is being delivered overall? So it is conceivable that a flag with a very bold statement near it that makes it clear that this product came from somewhere other than the country represented by the flag may not create the impression that the goods came from the country where the flag comes from. So it is that mixture of words, symbols, images and advertising that goes with the product that will be what we need to be looking at to assess whether we have a breach of the Trade Practices Act.

Senator Hanson Young —So if the idea was that something that was made in Australia needed to be made with products from Australia, would you foresee that that would need to be something that was simply written in small writing on the back of the label and they could put whatever they wanted on the front to specify that—or would that impression have to be clear right upfront and not in small print? Do you know what I am saying?

Mr Weymouth —I think I do. There are two different tests. There is a test of: do we have a representation that is misleading or false and likely to be in breach of the existing Trade Practices Act? And I am answering this on the basis that there is nothing changed in the Trade Practices Act. But I think your question is: what would be needed on a label to clearly convey to a consumer that this product was made in Australia under some new definition of what ‘made in Australia’ might mean? I am not equipped to answer that.

Senator Hanson Young —From a consumer’s perspective, what do you think would need to be in the overall ‘get up’, as it was put, to ensure that the impression that something, even though perhaps it has been put together in Australia, is not of Australian content? Probably the clearest example we have been talking about today is orange juice—where, even though it might actually be constituted in Australia, it is not of Australian product. I know the little logo means something already and there is an understanding about that. We are talking about whether we need to actually change the definition. But it would be fair to say that not all consumers necessarily understand the legalities of that logo. I would suggest that if you said to someone that a bottle of orange juice that had the ‘made in Australia’ logo on it and yet was made of oranges from Brazil, they would be surprised—they would not have thought that would be the case. So in that situation where do you think the clarification about the product used needs to be specified?

Mr Ridgway —One thought that comes to mind in the context of this discussion is that the Trade Practices Act is framed in a way that enables the market to innovate and does not constrain useful development—it does not become redundant as a result of new technologies and so forth or new ways of doing things. So the framework of the TPA does not go to that prescriptive notion I think for those reasons. But it does not preclude firms, for example, from saying something like ‘packaged in Australia from imported and Australian ingredients’ or ‘manufactured in Australian from Australian and imported ingredients’ and so forth. Indeed some suppliers make representations of that nature. It is not prescribed that they do but it allows them then to quite accurately, in many cases, reflect the origin of that content.

Mr Weymouth —I think one aspect that it is very important to come to grips with in this context is that it would seem to me to be an unusual circumstance to create a requirement for certain food labelling to have a very specific ‘made in Australia’ or ‘Australian’ qualification and to leave the Trade Practices Act as it currently is.

You could end up with a scenario where the ACCC would look through the trade practices prism and ask, ‘Is this package being labelled in a manner that is misleading or deceptive?’ The safe harbour tests say you are not in breach of misleading conduct if the product has been substantially altered in Australia—50 per cent. So you might pass the ACCC trade practices test but in fact not have complied with the potentially new requirement that is being spoken about here for food only.

Senator Hanson Young —So are you suggesting that, if we were going to be talking about, as the bill suggests, redefining what those definitions are, it would be simpler and clearer to ensure that that happened across the board for all products? I am not necessarily saying you are endorsing the idea. Is your point that the Trade Practices Act would have to adopt a new definition as well?

Mr Weymouth —For consistency, there are two ways forward. One would be that you would have a rule for food. The Trade Practices Act would then have a very unusual, quite product-specific rule in it, which is not typical of the act’s structure. Or you would change the whole safe harbour provision in the Trade Practices Act, which could have consequences that have not been thought of at all in terms of general manufactured goods. I have certainly listened to some of the discussion on food, but I just have not turned by mind to whether those same reasonings apply to some other manufactured goods.

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