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Thursday, 12 February 2015
Page: 595

Senator MILNE (TasmaniaLeader of the Australian Greens) (12:25): I move:

That this bill be now read a second time.

Senator MILNE: I seek leave to table an explanatory memorandum relating to the bill.

Leave granted.

I table the explanatory memorandum and seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

As a Parliament, we should be striving to ensure Australians have access to the information they need to make informed consumer choices, particularly in relation to food. We should also be seeking to support Australian producers, by ensuring that consumers can clearly identify Australian made products.

This Bill seeks to achieve these aims by amending the Competition and Consumer Act by creating specific provisions for country of origin labelling requirements for food.

Public Views

This is an issue that has gained considerable public momentum since we first reviewed this legislation in the Parliament. It is a topic on which there is a clear and united public view. Whenever the question is asked, overwhelmingly Australians tell us that they want to be able to easily identify and buy Australian-grown food, and overwhelmingly they are frustrated in that desire by current country of origin labelling.

As surveys conducted by consumer group CHOICE illustrate, Australians care about knowing if their food was grown and/or manufactured in Australia. This is also reflected in Roy Morgan polling, which found that 89% of respondents indicated that it was important the food they buy is Australian, and 82% indicating that it is important that the food is packaged in Australia.

The legislation currently in place does not reflect the importance placed on accurate country of origin labelling by consumers. We should be striving to improve current practices, which is what this Bill seeks to achieve.

Current Practices are Misleading

Unfortunately for consumers, the majority of whom do see buying Australian-made as important, identifying local products can be very difficult, with current regulations lax and sometimes misleading. Though the Food Standard Code requires the country of origin to be stated on the label, there are many loopholes easily exploited by manufacturers that ultimately confuse consumers.

For example, a product can state it is 'Made in Australia', so long as 51% of the value of the product has been 'substantially transformed' in Australia - including not just the consumable product itself, but also the packaging. In theory, a product can be completely imported, but simply mixed or packaged locally and still be labelled 'Australian Made'. Research by CHOICE highlighted that "only 12% [of consumers] were able to accurately identify the meaning of 'Made in Australia'''.

As the Blewett Food Labelling Review highlighted, "Consumer knowledge of and trust in the food system is conveyed and reinforced via the food label…Labels are a key communication link between food growers, manufacturers, health professionals, governments and communities." As a Parliament, we need to ensure that this communication link is trustworthy and straightforward for consumers; that is what this legislation seeks to achieve.

What the Bill d oes

This Bill acts to allay concerns surrounding food labelling by making it easier for consumers to access clear, accurate information about their purchases through the creation of a simple three-tier standard of labelling for food with any form of Australian origin or processing.

In the first instance, it retains the well-established premium label of 'Product of Australia'; all the significant ingredients and processing must have occurred in Australia in order to make this claim.

For fresh unpackaged food, it also allows the use of 'Grown in Australia' as this is a clear and now well-established and understood claim.

Secondly, for food that has been manufactured in Australia, that is substantially transformed, it requires such packaged food to be labelled 'Manufactured in Australia'. This term is specified to replace 'Made in Australia' because consumer research has shown that people confuse the term 'Made in', thinking it denotes the origin of the food, not just where it was processed.

This amendment will achieve two important improvements:

it will clarify for consumers that the label is about where the food has been processed, not where the ingredients are from, and so provide a strong label identifying local manufacture to help Australians support local jobs in food processing; and

it will help prevent imported food from masquerading as Australian content by making it clear that this label only speaks to the processing, not the ingredients.

A further reform in this Bill is that it provides for the creation of regulations to provide clear guidance on the meaning of 'substantial transformation' in relation to food processing. It is clear from the evidence that understanding what qualifies as food manufacturing—that is substantial transformation—is a grey area, and some companies push the envelope in their claims.

It must be remembered that the purpose of the substantial transformation test is to reward significant investment and jobs in local food manufacturing. The system breaks down if manufacturing claims are made for much lesser and often more transient investments.

Therefore this Bill provides for a regulation to list processes that do not qualify as substantial transformation. This would significantly increase the clarity and transparency of 'Manufactured in Australia' claims, and support local food processing jobs.

It is worth noting too, that historically the companies investing in genuine food manufacturing in Australia are the most likely to also be sourcing local food for their products. To further encourage clear labelling of Australian ingredients, this Bill allows for the voluntary highlighting of local content that comprise significant ingredients—for example a chocolate might therefore be labelled "Manufactured in Australia from Australian milk".

This allows for the fact that there are some foods manufactured in Australia that don't use all local ingredients for the simple reason that Australia does not produce them in sufficient quantity for it to be possible—cocoa beans for making chocolate being a good example. But it does allow for local significant ingredients to be differentiated, which in turn means that consumers can reward local content and greater transparency at the cash register.

Finally the Bill establishes a third tier of labelling to deal with packaged food that does not have sufficient Australian content or processing to qualify for the other claims. At the moment these products use the least understood—by as little as 3% of Australians in fact—and most frustrating current country of origin claims, those known as 'qualified claims'—terms such as 'Made from imported and local ingredients'.

These vague catch-all statements at best confuse and frustrate consumers, and they certainly don't support informed decisions. This Bill prohibits them, and instead requires any packaged food that has some level of Australian processing or content, but that does not meet 'Product of' or 'Manufactured in' claims, to simply say "Packaged in Australia".

By providing three tiers of country of origin claims, this Bill offers an opportunity to greatly simplify a complex and frustrating area of food labelling. It responds specifically to years of consumer research, showing that Australians equally want to know where their food is from, and where it was processed.


Consumers want to make informed purchases, and they want to support Australian producers, and they want clear country of origin labelling that allows them to easily identify and choose to purchase food grown and processed in Australia. As Parliamentarians, we need to be facilitators of this process. In order for consumers to fulfil this desire, we need to make sure they have access to accurate information, and that means ensuring our food labelling laws are robust.

I believe this Bill offers a tangible step forward to improving country of origin labelling for food, one that has support from organisations representing Australian growers, local jobs in food manufacturing and information transparency for consumers.

There are no doubt further reforms we could and should consider over time. It is still difficult, for example, for some forms of local processing that support local jobs to get recognition under these proposed labelling claims—and the existing system. However, the ability to pursue further improvements should not be used as a reason to oppose the reforms this Bill offers.

For Australian farmers and food manufacturers, this Bill is urgent. As the news continues to be filled with stories of Australian food manufactures going into administration or slashing their intake of local content, and as Australian farmers struggle to keep market share at home against a rising tide of cheap imports, it has never been more timely to help Australians identify and buy local food. It is time to act.

Senator MILNE: I seek leave to continue my remarks later.

Leave granted; debate adjourned.