Country of origin labelling

The jargon surrounding country of origin confuses consumers.
 
Learn more
 
 
 
 
 

01.Introduction

AustralianMade_lead

When it comes to buying groceries, Australians want to support their local farmers, manufacturing jobs in Australia and Australian owned companies by buying Australian made products.

Under the Food Standards Code, it’s mandatory that food labels identify the country in which a product was made or produced. While this seems straightforward, claims are applied to whole foods, rather than their individual ingredients, so country of origin labels can often be confusing. CHOICE wants country of origin labels to be informative, so that consumers can identify where key ingredients like fruit, vegetables and meat have come from.

CHOICE surveyed members to find out what they think about country of origin and their understanding of the different origin claims. We received over 900 responses, of which:

  • 90% said origin labelling should be clearer.
  • It’s very important to 66% of survey participants that they can confidently identify whether a product is manufactured or produced in Australia.
  • Almost half of the survey respondents will always try to buy Australian products when they’re available.
  • 83% of respondents say supporting Australian-owned companies and keeping profits in Australia is important to them.

Unfortunately, there are no current labelling laws to regulate the “Australian owned” claim, although there are guidelines for its use. The ACCC says “Australian owned” relates to majority ownership. To make the claim, a company must be able to prove that at least 51% of ownership is held in Australia – 100% if the claim “100% Australian owned” has been made.

However, “Australian owned” doesn’t necessarily mean the product has been manufactured in Australia. The Australian Made, Australian Grown campaign (AMAG) endorses a logo with “Australian Made and Owned”. This logo cannot be used by companies that are Australian owned if they manufacture their goods overseas.

For more information on food labelling take a look at the articles at CHOICE labelling and advertising.

Decoding origin claims

The survey gave participants the opportunity to explain their understanding of origin labels, in their own words. These responses were then sorted into categories, determine by how correct/incorrect they were in regards to the actual definitions. The definitions of each claim below are sourced from the Labelling Requirements of the Food Standards Code. Australian Grown is defined by the AMAG.

Made in Australia

Definition: The product has been substantially transformed in Australia and at least 50% of the production costs have been incurred in Australia. “Substantial transformation” is defined in the Competition and Consumer Act as a fundamental change in form or nature.

  • Although 56% of members were on the right track with their responses, only 1% was close to the mark. This group's responses expressed an understanding that the product was primarily processed in Australia.
  • Around 8% were incorrect, making statements such as ‘all ingredients/contents are sourced in Australia’, ‘100% Australian’ and ‘all ingredients/contents are sourced from overseas’. A great individual response was, “the product is made or substantially altered in Australia (from Australian and/or imported content).” Another said, “It seems to mean nothing unless it is qualified by further information” – highlighting the need for clear and informative labelling.

Made in Australia from local and imported ingredients

Definition: This claim qualifies the “Made in Australia” claim for manufacturers that don’t meet the “Made in” claim requirements. Whichever comes first, local or imported, is in the greatest proportion. For example, Woolworths Select Light Smooth Peanut Butter is “Made in Australia from imported and local ingredients” – imported ingredients are in the largest proportion here and Woolworths says the peanuts are currently sourced from Argentina.

  • Around 68% of respondents had a good general understanding when defining this claim.
  • The most accurate response was from the 15% who made statements suggesting the ingredient/content origin is uncertain. A perfect individual response said, “The product is created from Australian and Imported ingredients. Hopefully if ‘local’ comes first, the proportion of local ingredients should be greater than imported.”

In our survey:

  • 38% said they would like food labels to disclose the origin of all ingredients in a product.
  • 24% said they would like to at least see the origin of the ingredients in the greatest proportion.
  • 23% said they would like to know the origin of the ingredients that characterise the product, such as the peanuts in peanut butter.

While information this detailed would be ideal, Food Standards Australia and New Zealand (FSANZ) has decided that country of origin labelling only applies to whole foods. Packaged foods often have a high number of ingredients and labelling the origin of all would be costly, resulting in higher prices for consumers.

Product of Australia

Definition: Each significant ingredient must come from Australia, and all or almost all of the processing must happen here too.

This is a premium level claim and is your best bet that the product you’re purchasing was sourced and manufactured in Australia.

  • 41% had a good understanding.
  • 11% made statements that were incorrect.

Of these incorrect responses 21% made statements to suggest the product is ‘grown in Australia’. 16% said the ingredient/content origin is uncertain/could be local or imported/sourced from overseas.

Australian Grown

Definition: Each significant ingredient has been grown in Australia and all or almost all of the production processes have occurred in Australia as well.

Respondents had a good understanding of this claim, one that is commonly seen in the fresh food section of supermarkets. When this claim is used in conjunction with an ingredient, for example, “Australian grown tomatoes” then 100% of the named ingredient was grown in Australia and at least 90% of the whole product was grown here too. This is the case with Kraft Nuts Smooth Peanut Butter, which claims to use “100% Aussie peanuts”.

 
 

 

Sign up to our free
e-Newsletter

Receive FREE email updates of our latest tests, consumer news and CHOICE marketing promotions.

 
 
Your say - Choice voice

Make a Comment

Members – Sign in on the top right to contribute to comments