In a recent review of Australia and New Zealand’s food labeling laws, the Blewett Report dedicated an entire section to ‘Consumer Values Issues’. The submissions and consumer survey evidence presented to the Panel indicated that consumers felt strongly about the origins of the food they buy, how it was made and under what conditions it was produced. Country-of-origin labeling (CoOL) is currently the only “values based” claim that is addressed in the Australia New Zealand Food Standards Code (the Code). In light of the Report’s recommendations, this may yet re-spark the debate in New Zealand regarding CoOL.
The food label is recognized as a convenient method to provide consumers with certain information at the point of purchase which may influence a consumer’s choice of product based on their moral beliefs and values. The adoption of values based food labeling is not advocated on the basis of public health and safety concern, but rather that it can provide suppliers with a positive point of difference in the market so that there is a strong incentive to adopt such a claim and for consumers to respond.
New Zealand and Australia have taken different views on CoOL. Traditionally, New Zealand has left CoOL as a voluntary practice for the food industry to use as a marketing tool whereas Australia has made it a mandatory requirement for all packaged foods, fish, pork, fresh fruit and vegetables so that it is legally enforceable. New Zealand’s position is primarily based on the presumption that the costs would far outweigh the benefits to consumers, although an exception is provided for in regulations in respect of wine. Instead, New Zealand promotes the use of CoOL through the “Buy NZ Made” industry certification scheme. Buy NZ Made is a privately funded, self-regulatory organization that promotes NZ made products. The Buy NZ Made “kiwi in a triangle” trade mark can only be used by members of the Buy NZ Made campaign who pay a licence fee to do so. The New Zealand Ministry of Consumer Affairs is also currently developing a voluntary industry code of practice for CoOL labelling of single ingredient foods.
Nevertheless, the Report advocates an aligned approach to CoOL requirements between the two countries and in fact the Panel went so far as to recommend that Australia’s existing CoOL labeling requirements for food be maintained and extended to cover all primary food products for retail sale. However, concerns were also raised around the quality of CoOL. For example, the “Made in Australia” claim can be made if 50% of the costs of production have occurred in Australia and the food has been “substantially transformed” in Australia. Likewise in New Zealand, the Commerce Commission takes the view that a place of origin is the country or region where the product’s “essential quality” was created, although there is also some ambiguity where raw products are imported from overseas which is often the case. Therefore, the Panel favoured an Australia-origin claim based on the ingoing weight of the various components for the food, excluding water.
Perhaps not surprisingly, the Panel considered that the mandatory requirements for CoOL on all food products should be provided for specifically in existing consumer legislation in Australia. In New Zealand, Section 13(j) of the Fair Trading Act 1986 (FTA) prohibits making any false or misleading representations concerning the place or origin of goods. This goes wider than simply using the Buy NZ Made logo, but includes the use of any statements or symbols, such as flags or kiwis that indicate the product is made in New Zealand.
There have been a number of cases which have considered the use of the Buy NZ Made logo in relation to country-of-origin claims under the FTA. In particular, there has been a proliferation of cases concerning “royal jelly” products. In September 2010, an Auckland based company NZ Korea Health Limited, was fined $16,000 in the Auckland District Court for labelling imported royal jelly as New Zealand made. In this case, the powdered royal jelly was sourced overseas and was a substantially inferior product to the royal jelly which is sourced in New Zealand and that typically has a higher level of active ingredient. The company made deliberate claims that the product was “New Zealand Made” including using the Buy NZ Made logo, even though it was not a registered member of the campaign.
As such, it remains to be seen whether New Zealand’s voluntary stance may alter in light of the Report’s recommendations and whether section 13(j) of the FTA is sufficient in terms of this being addressed in national legislation. In any event, the success of any country-of-origin claim on food labelling, whether voluntary or mandatory, may depend on the degree of clarity surrounding its defining requirements and whether the public perceive the claim as being reputable. Overall, it should be an important consideration for marketers when looking at the labelling of their New Zealand products.
Published in FMCG magazine, July 2011