STRICT new changes proposed to country of origin and food labelling laws could have major ramifications for farmers and food processors set to be excluded from using "Australian Made" and "Australian Grown" labels.
Even more confusing, the new rules could also allow non-genuine products to use the label if they undergo "substantial transformation" in Australia or the bulk of production costs are incurred here.
A Senate inquiry examining the proposed Food Standards Amendment (Truth in Labelling) Bill heard major concerns from the company behind the iconic Australian Made logos at a hearing in Melbourne on Monday.
The bill would require new food labelling standards be developed to which producers, manufacturers and distributors would need to adhere.
Under the proposed Bill, the standards would require greater detail about the content of food products including the use of imported ingredients, and would stipulate the word "Australian" would only apply in relation to food that is 100 per cent produced in Australia from Australian products.
But the head of the Australian Made Campaign Limited, which administers the Australian Made, Australian Grown logo, says the changes could deliver a serious blow to the Australian food industry as very few processed foods contain 100 per cent Australian ingredients.
AMCL's submission to the inquiry said that in 2007, the Federal Government introduced the ‘Australian Grown’ descriptor for use on fresh produce and processed foods with a high Australian content.
AMCL chief executive, Ian Harrison, said when used with the AMAG logo without qualification, ‘Australian Grown’ is equivalent to the ‘Product of Australia’ claim – that is, all the significant ingredients have been grown in Australia and all production or manufacturing processes have taken place in Australia.
When used with qualification, as in ‘Australian Grown Potatoes’, Mr Harrison said it indicates that at least 90 per cent of the content (net weight) of the product is grown in Australia, and 100 per cent of the named ingredient, in this instance potatoes, is grown here.
"An example of this would be frozen potato wedges made in Australia from Australian grown potatoes where some minor added ingredients (oils, spices, flavourings) are imported," Mr Harrison said.
He said the ‘Australian Made’ claim, as currently defined in the Trade Practices Act and consequently the Food Standards Code, relates to manufacturing processes and costs of production, rather than content, Mr Harrison said.
"A food product which contains a high percentage of imported ingredients can still legally be described as ‘Australian Made’, provided it meets the twin criteria of ‘substantial transformation’ in Australia and 50 per cent of costs incurred locally," he said.
"The cost criterion is relatively straightforward – it is either met or it isn’t, although where there is a sizeable import component, it can be affected quite dramatically by movements in the exchange rate.
"Our major area of concern is in the interpretation of the term ‘substantial transformation’ in regard to food products.
"Under these guidelines, mixing, homogenisation, coating and curing are all processes likely to be considered as "substantial transformation".
He said this would mean mixed diced vegetables, blended fruit juices, crumbed prawns and ham and bacon may also qualify as Australian Made even though all the major ingredients may be imported, as long as 50 per cent of the cost of production is incurred in Australia.
Mr Harrison also has major concerns about the interpretation and possible effect of labelling changes because very few processed food products these days contain 100 per cent Australian ingredients but legitimate users of the logo currently would be excluded.
With cheese, he said most, if not all, cheese made in Australia today is made with imported rennet yet under the new legislation cheese made in Australia from 100 per cent Australian milk could not be labelled ‘Australian cheddar’;
Potato wedges made from 100 per cent Australian potatoes with some imported flavourings or oils could not use the claim ‘Australian Grown’.
"We believe that the 100pc requirement is unrealistic and excessively restrictive," Mr Harrison said.
"AMCL believes the proposal, however well-intended, will cause further confusion for consumers and have the effect of disadvantaging a large number of genuine Australian manufacturers by precluding them from using legitimate country of origin claims on their products."
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