CROWE, Ms Lisa, Administration and Compliance Manager, Australian Made Campaign Ltd

HARRISON, Mr Ian, Chief Executive, Australian Made Campaign Ltd

[09:58]

CHAIR: You have lodged submission No. 5. Would you like to make any amendments or additions to that submission?

Mr Harrison : No, we are happy with that, thank you.

CHAIR: Would you like to make a brief opening statement?

Mr Harrison : Yes, we would. By way of background, the Australian Made Campaign Ltd is a not-for-profit organisation that promotes and administers the Australian Made Australian Grown logo. This is done under a formal agreement with the federal government that was entered into back in 2002 when ownership of the Australian Made Australian Grown logo was transitioned out of government into this not-for-profit organisation.

The logo was introduced by the federal government back in 1986 as a certification trademark across all 34 classes of goods, which of course includes fresh produce such as beef. A couple of background points on the logo. It has been used extensively in export markets for all of its 27 years, and in recent years we have extended the descriptions that occur under the logo in the marketplace to include—as well as Australian Made and Product of Australia, which were the descriptors introduced back in 1986, we now have a classification Australian Grown and a qualified version of that, Australian Seafood, and, more recently, for use in export markets just the simple term 'Australian'.

We have the view that consumers are increasingly interested in, concerned about and they certainly want to be aware of the origins of the food they eat. We think there are a lot of reasons why that is the case, but we do not have to go into those this morning. In respect of beef, we know there are general concerns in the marketplace about the possible contamination through diseases that could come about from imported meats, such as BSE and FMD, and any consequent dangers to human health. We are peripheral to those matters, but we observe them in the media. We know very closely that consumers are more and more concerned about current labelling laws in general and particularly as they relate to processed foods, and we have made a number of proposals or submissions to government and other Senate committees over the past three or four years.

That is the background. We set out some recommendations in our submission. I know that has been available to the members of your committee, Chairman. I will read through them if you want, but I am happy to take them as read and we can go into questions if you are comfortable with that.

CHAIR: Thank you very much for that.

Senator BACK: Thank you very much for your submission and for your appearance here this morning. Can you expand on the food labelling side? What advice would you give to the committee that could satisfy you, and in your view Australian consumers, on how they would be assured of accurate information on the label determining the country of origin of the product?

Mr Harrison : Thank you for that question. Our overriding view is that in the area of Australian Made there are concerns. It is not so much a problem in the area of Australian Grown, where the compliance has to be at a very high level. Product of Australia and Australian Seafood, those categories are very clearly set down in the conditions that companies have to meet to put that claim on a product and we think that is well received by consumers. The consumer does not need to know the detail of what is behind the claim; they have to be comfortable that the claim is of a high standard.

In the area of Australian Made, where the definition relates more to a process than to the ingredients that are in the products themselves, we have come back with a proposal. We have changed the rules for using the Australian Made logo to actually reflect this proposal. We have put tighter restrictions on the definition of 'substantial transformation'. As your committee would be aware, Senator Back, for a product to meet the definition of Australian Made, there are two tests: (1) the product needs to have been substantially transformed here and (2) more than 50 per cent of the cost of manufacturing or producing that product needs to have been incurred in Australia.

Now therein lies an issue—not the second test; that is arithmetic: you look at what you have done here and what are the imported components and if it is more than 50 per cent you have passed the test, you get a tick for it. If it is not, you do not. The real issue lies in the first test, the test of substantial transformation. What we know can occur in Australia is that we can have manufactured products that have a very high imported component and yet still meet the test as judged by the regulator for the government, the ACCC, that that process actually constitutes substantial transformation. We all know of the example where the imported pork can be cured into bacon or ham and the product legally can be called 'Made in Australia' because it meets both of the tests, because the ACCC says that process constitutes or meets the substantial transformation test.

What we have done with the Australian Made logo—we did this 18 months ago after a long period of discussion with government because we need to get approval by the department of industry as well as formal ratification by the ACCC for any changes to the rules for that symbol because it is a registered certification trademark—we lifted the bar, so to speak, on what constitutes substantial transformation and we have denied certain processes from actually meeting that. So we are saying that if you cure meats, that does not substantially transform the meat. If you roast coffee beans, they are still coffee beans. If you coat fish—I think Senator Heffernan used to have an example some years ago of the imported prawns that have been crumbed and so forth—are saying coating and crumbing of foods, slicing and dicing, homogenising—there is a whole range of processes which we have said no longer, for the purpose of the Australian Made logo, meet the substantial transformation test. The result of that is that products that have a high imported content that have undergone one of those processes that we can defined can no longer meet the made in Australia test.

CHAIR: Congratulations!

Mr Harrison : They therefore cannot use the Australian Made logo because they quite clearly will not meet one of the tests necessary to be called Product of Australia or Australian Grown or Australian Seafood because they have a high imported content. We believe that that process—we put this proposal to a food labelling Senate review committee recently and we were very happy to see that that committee recommended that the government give serious consideration to adopting the proposals that we have identified for our symbol and put to them—we clarifies to a significant extent the concerns that consumers have.

The question emerges straight away: is our list of processes that we have identified definitive? The answer to that is always, 'No, there will be other processes that we will add on from time to time'. But the real point in doing this that we have denied certain products the capacity—fruit juice I should have mentioned, recognising that Senator Xenophon is on this committee as well! We have denied certain products the right to use the Australian made claim in conjunction with the Australian Made logo. Unfortunately, they can legally still, under the Australian Consumer Law, make the claim that the product has been made in Australia because that process, by the considerations by the ACCC, still meets the substantial transformation test.

We have said we do not like the 'made from local and imported ingredients' descriptor. We believe that is misleading. It is very, very badly received in the marketplace. We think products can only use that descriptor if in fact they meet the full made in Australia test. If the manufacturer or processor wants to give further information to the consumer—'Look, there is some imported stuff in here and I'd rather volunteer it than respond to a bad media call'—then that is their business. But the product needs to meet the test itself before you can then qualify it.

Senator BACK: Sure. You made the observation, when you are discussing qualified claims:

The Australian Consumer Law is silent on the question of qualified claims.

I just wonder (a) what action you are taking yourselves to try to, if you like, reverse that situation, and (b) what recommendations or advice would you give to this committee that might enhance the capacity of Australian Consumer Law to be more vocal and have more legal direction in this area?

Mr Harrison : The issue for us is that the qualified claim is not properly defined in the legislation. We have a set of rules, tests, that a product must meet to make the made in claim, but we are non-specific about the attributes or the characteristics of that product if it is actually being described by a qualified claim. The 'made from local and imported' is a qualified claim. So we are of the opinion that qualified claims really derogate from the significance of a made in claim. They undermine public confidence in this area. We believe that the overriding principle of our interest in this specifically, quite apart from the specific matter for consumers on qualified claims, is that country-of-origin offers Australian manufacturers and processors a genuine advantage in the marketplace, be it in Australia or overseas.

We believe that the government should be far more proactive, particularly in working with the Australian Made Campaign, to galvanise and strengthen that advantage that is available to our processors and our manufacturers. Where you have got a cynical public that is being influenced by, or people who have become suspicious because of, the various media treatments surrounding country-of-origin labelling—not all of which are accurate, but they are nevertheless out there in the media—what we are actually doing is undermining an asset that we should be strengthening for our manufacturers and processors, rather than allowing it and its integrity to be questioned increasingly in the media. I find many instances where I have got to strengthen up the significance of country of origin when I am making media comments. In private discussions people quite often say, 'But isn't there a whole lot of confusion about what "made in" means?' or '"Made in" doesn't mean anything that it used to anymore', or 'Can't you have fully imported products called "made in"?' Whilst I can clarify those situations one on one—or hopefully more than one on one in the media—the reality that I always am unimpressed by is what we are doing in Australia to the integrity of what should be a very strong benefit available to our processors and manufacturers. For goodness sake, in the current environment, it is a very strong card that is not being played successfully.

Senator BACK: Yes, when you look at the way the French fiercely protect their wine products and how they are described, I can only agree with you. Thank you very much, Mr Harrison.

Senator STERLE: Let me tell you, I find it hard to argue. I would much prefer Australians buying a lot more Australian made stuff. I want to run this past you: Senator Colbeck, I and others visited Simplot in Tasmania last year where we were told that Simplot—and Senator Colbeck said he will correct me if I get anything wrong—are the last Australian frozen vegetable manufacturer supplying our market. Coles visited us and Coles told us that they are only using or promoting Simplot in their home brand frozen vegetables. When we questioned Simplot as to the effectiveness of the Australian Grown symbol and how it affected their market share, sadly, it is just not hitting the mark out there with the consumer. Would that be a fair statement?

Mr Harrison : I am sure it is reflecting research that Simplot have undertaken, so I am interested in that. We have had discussions with Simplot. They use the Australian Made, Australian Grown logo on some of their product lines, but they are not using it on their packaged peas, we know that. They have reason for doing so, and that reflects the research they are doing. It goes back to the broader comment that I was making that one of the recommendations we put to the Senate inquiry on food labelling recently—and we have not included it in the submissions here, but I will verbally say it—is that the federal government should become more proactive in respect of country-of-origin labelling and should put greater value on or recognise the potential for it to be an even more powerful instrument—that is the way to describe it—in the marketplace. We do think there is an urgent need for an education program for consumers regarding just what the claims mean, which we think would overcome some of the misinformation that is spread from time to time for all sorts of reasons and some of the misunderstandings that take place in the marketplace. But let us recognise that this is an opportunity for the Simplots of this world to benefit greatly by the fact that Australians do give very clear preference to Australian produce. That is less so for Australian manufactured product, but they are still, in surveys anyway, saying that they look for Australian product and manufactured goods. So let us take the comment from Simplot and interpret it the way it should be said. There is greater importance available associated with country-of-origin labelling and maybe a campaign that actually spells that out a little bit more to the consumer, along with clarifying exactly what the claims mean.

Senator STERLE: Mr Harrison, sorry to jump in on you but we are tight for time. I am not cutting you down. I hear you saying to have a crack at the federal government who, you say, should be doing a lot more. I would like to see stronger country-of-origin labelling, so let's not worry about that argument. If you could provide this committee with the figures of how the Australian Made and Australian Grown label compares to imported stuff. Quite frankly, as we have seen, Australians think through the hip pocket—as sad as that is.

CHAIR: Certainly with tinned peaches. I am going to go to the issue of what this is really all about which is imported meat.

Before I do I presume you are aware—and I would be interested in your comment—that we are still, for the purposes of the strict interpretation, illegally importing prawns because there are certain limitations on imported, fresh prawns. The marinated prawns coming in here now you can wash. It is as simple as that, chuck them in the sink and wash them and they are fresh prawns. For the purposes of the interpretation of the Australian Made label, to repackage them into smaller packets and double the price, would that get through the hurdle of Australian Made?

Mr Harrison : Absolutely not. They cannot get Australian Grown and they cannot get Australian Seafood—

CHAIR: But they can get Australian Made.

Mr Harrison : No. Absolutely not with the Australian Made logo. I am not even sure that they could legally be called Australian Made under the ACL.

CHAIR: They should not. Under the IRA importation they should not be coming in at all because they are fresh prawns for all intents and purposes.

Mr Harrison : I think that is another issue.

CHAIR: We are going to take a trip over to the Netherlands. For the purpose of Australian Made, and not looking at the risk of the human variant of CJD and BSE coming in, as I understand it from the Import Risk Analysis the importation paperwork seems to me to say that this is an application to bring in not only tinned meat but also fresh meat. Are you aware of that?

Mr Harrison : No, I am not.

CHAIR: If you could bring fresh meat in under what circumstances that you know of could fresh imported meat, which has been transformed from bone-in or bone-out meat into mince with a bit of onion and put on the shelf and seriously value added, be described as Australian?

Mr Harrison : I am just reflecting.

Ms Crowe : It would depend what you made with it.

CHAIR: Yes. I accept that.

Ms Crowe : It would need to be fairly elaborately transformed—

CHAIR: But, you could do it?

Ms Crowe : to say it was Australian made.

CHAIR: You could do it.

Ms Crowe : If we take Senator Xenophon's favourite example of the meat pie—

CHAIR: Senator Xenophon will probably intercept me here, and I will allow him to.

Senator XENOPHON: I do not want to interrupt Ms Crowe, but it is true that under the substantial transformation rules, that you could technically have a Made in Australia meat pie where the gravy, the pastry, the packaging and the processing were Australian, but you could, for instance, bring the meat in from a BSE affected country and you could still call it Made in Australia from Local and Imported Ingredients, and consumers would not be any the wiser of where the meat had come from, would they?

Ms Crowe : That is correct.

CHAIR: To add to the popularity of meat pies and tomato sauce at footy, under what is proposed you could actually be eating a pie from a cow that has BSE and so put yourself at risk, unless the pie was a solid brick so that, if you sent it out to the crem, it would not interfere with it—unless it was savagely mauled, because, as I understand it, you cannot sterilise for the prion. So you could be putting yourself in the risk profile and not know it, and our labelling would give it the green light.

Mr Harrison : The labelling talks about the product, and the made claim under which a pie would exist obviously talks about the product. People are not buying a spoonful or however much—I am not sure—is in a pie; they are buying a meat pie. So I think the issue you raise needs to be headed off by the health regulations and the import requirements. The labelling will struggle very badly on that. So it is very much a health issue and an importation restriction issue rather than a labelling issue. We have talked about the meat pie, because obviously Senator Xenophon raised it before, and we have talked about how our rules handle the meat pie. It is our decision at the end of it that the process of taking meat, pastry and all the other things that are in a meat pie substantially transforms whatever you started with, so you tick the box without question. If you tick the box for 50 per cent, under the Australian Consumer Law you can make an honest claim of 'made in Australia', and therefore we would allow that product to carry the 'Australian-made' logo. That is a different situation to those that I was talking about earlier, where we have said certain processes do not meet the substantial transformation test. That is why we are hoping the government will come with us at some point so that we can build greater strength back into the overall labelling system.

By the way, in respect of Senator Sterle's comments a while ago about Simplot, we are facing the same thing more recently here in Victoria with SPC Ardmona and their need to cut back on local fruits. SPC are an organisation that uses the 'Australian-made' logo on their product on shelf, so to us it is very important that we put a lot of effort into talking to Australian consumers and spelling out that there are consequences from shopping decisions. Every time a purchase decision is made, there are consequences. We believe that that message desperately needs to go more powerfully to Australian consumers, and that is why we fundamentally believe there is a need for the federal government to come with us on a properly constructed strategic campaign to clarify labelling laws to the public as an education program and to re-emphasise the importance of consumer decisions when we get round to buying things.

CHAIR: For the purposes of this inquiry, we are concerned with the soundness of the decision making both administratively and scientifically—allowing for human error—to import fresh meat into Australia from countries that are practically borderless for the purposes of human trafficking and also animal trafficking. There may be a paper trail—which dramatically failed in the case of the OIE, this group of people in Europe that gather round and drink red wine at night together at Geneva. They gave Brazil a tick when it should have been a cross. So is there anything you would like to add about the issues of identification and certification and the risk that we do not have now but will have in the future if we import meat from countries that have or have had BSE? Bear in mind that there is no such thing as a BSE-free herd unless you do not have a herd; you have to kill it.

Mr Harrison : We would have a view that this is a very important matter. It is outside our scope of competence. It is one where we must err on the side of a very conservative approach. There is no sense in Australia taking a risk with the health and strength of its natural resources. They are a great benefit to us going forward. We talk about Australia as a food bowl for Asia in the future. There is a lot of work to be done to achieve that, but one of the things we cannot do is put at risk the fundamentals of Australia's natural attributes.

We think it is an important role for your committee and it is one that we do not pretend to have expertise in. Food labelling is mainly where we sit, or labelling of products more generally—country-of origin-matters. We wish you the very best because if we have to make a mistake we have to err on the side of conservatism on this matter. And I am not suggesting that you will make the mistake, of course!

CHAIR: No, but I accept that all human endeavour has failure and that all traders in some respect are likeable rogues. I have to declare an interest, actually—

Senator XENOPHON: Being a likeable rogue?

CHAIR: The likeable rogue is a given; the 'likeable' is not, but the 'rogue' is a given. We successfully export from Junee abattoir a product called Junee Gold, which is lamb. We export into Asia and into the United States. We supply rack of lamb cryvacced to Costco Wholesale in the United States, so there you go. But it is all truly labelled and comes off farms around Junee.

Ms Crowe : It should be using the Australian Grown label on it.

CHAIR: I have not seen the latest labelling. I think actually that it is mostly Costco's labelling; I think it goes to Costco.

Senator XENOPHON: Mr Harrison and Ms Crowe, with your focus on labelling issues and what you represent: do you have any comments about New Zealand? We have heard evidence in other inquiries, including the inquiry that Senator Colbeck, who is here, chaired on food-processing, which was a very worthwhile exercise, that fish caught in the Atlantic Ocean, processed in China and South Korea, then sent off to New Zealand for further reprocessing and then brought into Australia was still labelled either—and I think that Senator Colbeck would correct me—as 'product of New Zealand' or 'made in New Zealand'. Although I think I spoke to the author of that, that if you broke down that product and repackaged it and the packaging was the 50 per cent and you recrumbed it or whatever, you could call it 'made in Australia'. Do you have concerns about the closer economic relationship we have with New Zealand and the whole issue of food labelling between the two countries, that the rules applying to New Zealand for country-of-origin labelling can be circumvented by virtue of the CER in the sense that you can get the frozen vegetables from China and they are labelled as New Zealand product—

Senator COLBECK: They can be labelled 'made in New Zealand'.

Senator XENOPHON: They can be labelled 'made in New Zealand'. Do you have an issue in relation to products coming from New Zealand?

Mr Harrison : I have one comment, and I hope that Lisa might help me—maybe not! The intermediate goods issue that we used to have with New Zealand years ago was always an issue. I think that Food Standards Australia New Zealand can get tripped up on some of these matters. I am sure that is possible. I think the integrity of the Australian labelling system needs to be maintained. What I was talking about earlier—what we have put to the government about the ways to treat substantial transformation—might just about get us back over the line, if we have crossed it at all.

If a product comes into this country, no matter where it has been caught and processed we need to deal with it as an imported product. If we then process it in Australia—like the beef into the pie that we were talking about a while ago—and it can then form part of a manufactured product that meets the tests, so be it. The end product—not the ingredients, the end product—can be described as 'made in Australia'. We just need to tighten up the processes and we need to have what I think the last Senate committee called 'a negative list of substantial transformation', where things actually do not tick the box.

That is the way that I would look at dealing with the issue from New Zealand. Lisa and I are not sure about the precise example, but if you import product—fish—from whatever source and then crumb it, we say it is still imported fish. That is the point about it; it is one of the specific examples that we use. We lost a couple of very big licensees, by the way, who are doing good work in Australia. They are crumbing product in Australia—and it is not a simple process; we have said it is, but we do not really think it is—but they use imported fish. Prior to that they were using the Aussie made logo, and we said, 'You can't use it any more'. The reality is that if you use Australian fish you can use it because you would use Australian seafood. But we say that you cannot use it on the imported. I think, Senator Xenophon, that would be the same outcome for this convoluted process through New Zealand where they are getting it, sending it to China, doing something back in New Zealand and then trying to come in under the free trade agreement. I think it can be fixed by proper application of Australia's labelling laws.

CHAIR: These are all difficult circumstances—given that at one stage of the game, I think, Australia because of the likeable rogue bit, was exporting beef, which was actually kangaroo at one stage, weren't we—for the purposes of China's using fox and rat meat as lamb. Actually, in parliament as well, would you believe we were eating barramundi up in the parliamentary dining room. When I asked them where it came from, they said the south coast. Obviously, there is no barramundi on the south coast, and so it wasn't barramundi. So there you go, and we are very grateful for that, but the issue before is we do not want a green-light corridor based on science with no allowance for human failure of importing meat from the eurozone where, despite the paperwork saying where it has come from, no-one really knows—like the human trafficking over there. We are very grateful for your evidence and we will bid you good morning and adjourn.

Mr Harrison : Could I make two very quick comments in going out? Firstly, the recent changes to the food standard identified beef amongst some other meats as those that need the required country of origin standard. We note and your committee might note—just picking up that very last point about some of the products that come in—that the revised standard did not require country of origin for less common forms of meat, be they horse, rabbit, kangaroo, crocodile, turkey. We did not know why the food standard revision did not just describe it as all meats or all seafoods. We should be consistent and all-inclusive in our labelling laws. Picking up on your point about the horsemeat that escaped from the bottom of the meat barrel to the US back in the early nineties, which is why the Australian Meat and Livestock Corporation is still a little reluctant to embrace the Australian-made logo of course.

The point that I wish to finish on is that the matters before your committee should not and can never be dismissed under a simple comment like 'This is just another form of protectionism', which is a bit of jargon that is thrown about sometimes by well-meaning people in organisations that could be the Department of Foreign Affairs and Trade to dismiss some of these sorts of inquiries. What I said earlier was that we need to be very conservative in the way we approach the importation of product that could have a very serious impact on Australia's natural resources and therefore our economy. We should not ever be dissuaded from having that strong view, senators, by the inaccurate view that that is just another form of protectionism. Something you said prompted me to think of that and I would like to put it on record.

CHAIR: Thanks for that. You will be pleased to know to comfort you that the semi-shaved, good-looking man in the white shirt from FSANZ at the back of the room made a note of what you just said.

Mr Harrison : Hopefully.

CHAIR: Thank you very much for your evidence.

Proceedings suspended from 10:33 to 11:02