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Focus: Food – December 2006In this issue: New food descriptors guideline highlights the need for food manufacturers to be careful of the claims made on their packaging and a Food Standards Australia New Zealand consider amending the Australia and New Zealand Food Standards Code.
Rolled up and squeezed out: ACCC cracks down on food packaging claimsIn brief: A
new food descriptors guideline issued by the Australian Competition and Consumer
Commission, coupled with two recent investigations by the ACCC
regarding misleading packaging of food items, highlight
the need for food manufacturers to be careful of the claims made
on their packaging. Partner Belinda Thompson
What is the law in this area?Part V of the Trade Practices Act 1974 (Cth) (TPA) protects consumers from false, misleading and deceptive claims and representations regarding goods and services. In particular, corporations are prohibited from engaging in the following conduct in trade or commerce:
ACCC guidelineOn 23 November 2006, the Australian Competition and Consumer Commission (ACCC) launched the Food and beverage industry – Food descriptors guideline to the Trade Practices Act (the Guideline) to guide businesses on the standards of advertising and labelling expected of the food industry. The Guideline is designed to supplement existing food standards, such as those developed by Food Standards Australia New Zealand. The Guideline:
In launching the Guideline, the ACCC expressed particular concern at the increased use of terms like organic and free range where the absence of regulation may persuade some businesses to unlawfully take advantage of strong consumer demand for products of this character. The ACCC aims to ensure that consumers are not misled by food and beverage businesses relying on finer details or qualifications hidden in the ingredients list or elsewhere on the packaging. The Guideline discusses the following key consumer protection issues involved in food labelling and packaging:
Recent examplesIn two separate instances within the past 12 months, the ACCC has investigated and sought undertakings from food manufacturers for conduct which it considered contravened Part V of the TPA. Uncle TobysIn September 2006, the ACCC accepted undertakings from Uncle Tobys Foods regarding claims they made about their fruit roll-ups. These claims included:
Upon reviewing information provided by Uncle Tobys, the ACCC expressed concern that the representations were likely to mislead or deceive consumers in accordance with the provisions above. Uncle Tobys offered specific undertakings under s87B of the TPA to remove or alter the misleading representations, including changing aspects of its packaging, ingredients list and advertising. Just Squeezed Fruit JuicesIn March 2006, the ACCC accepted undertakings from the Just Squeezed Fruit Juices Group in relation to representations made regarding the content of its fruit juice products on the product labels. The ACCC formed the view that the prominent placement of the words 'just Squeezed' on the labels, coupled with the images of fruit and words such as 'Orange Juice' and 'Apple Juice', created the overall impression to consumers that each product was produced directly from the fruit shown on the labels and did not contain reconstituted juice. The juices in question did in fact contain varying portions of reconstituted juice. In its s87B undertakings, Just Squeezed undertook to refrain from making any further false representations, rectify their current packaging, including changing the words 'just Squeezed' to 'just Delicious', publish an apology in a national newspaper, and implement a trade practices compliance program.
A lesson to be learnedThese examples provide a timely reminder to food producers and manufacturers to be alert as to the factual correctness of, and overall impression given by, the claims they make on packaging and promotional material. Any consideration of such claims should now be made in light of the information provided in the Guideline. In both of these cases, which arose prior to the release of the Guideline, the companies involved chose to co-operate with the regulator and rectify the conduct in question, rather than challenge the ACCC's views in court. As was seen in the Uncle Tobys case in particular, whether the representations made were factually misleading was not in fact tested. The mere perception that the representations could be misleading were of sufficient concern to the ACCC for it to take action. A desire to curb any potential public relations fallout may have contributed to these companies' co-operation with the ACCC, without the validity of their representations being judicially considered.
Food Standards Australia New Zealand updateIn brief: Food Standards Australia New Zealand is currently considering amending the Australian and New Zealand Food Standards Code in several important areas. In particular, it is reviewing the requirements for the use of water in winemaking, considering approving food from genetically modified varieties of soybean and rice, and also the introduction of isomaltulose as a novel food. Lawyer Laura Colavizza reports. BackgroundThe role of Food Standards Australia New Zealand (FSANZ) is to protect the health and safety of people in Australia and New Zealand by maintaining a safe food supply. It is responsible for developing, varying and reviewing standards, and for developing codes of conduct within the food industry. From time-to-time, FSANZ proposes amendments to the Australian and New Zealand Food Standards Code (the Code) in accordance with processes prescribed in the Food Standards Australia New Zealand Act 1991 (Cth). FSANZ is currently accepting submissions on several reports proposing to vary and/or amend the Code including:
Water use in winemaking – amendment to permitted levelThe Winemakers' Federation of Australia has made an application to increase the maximum prescribed amount of water to be added to wine from 30mL to 70mL per 1000mL, amending Standard 4.5.1 – Wine Production Requirements (Australia only). There are two bases for the application. Firstly, the large-scale manufacture of wine leads to residue water mixing into the wine either from the testing or cleaning of large-volume equipment or from bottle rinsing, increasing the level of water in wine above what is currently permissible. Secondly, the incorporation of food additives and processing aids (at permitted levels) may require more than 30mL of water to be added per 1000mL. The FSANZ's draft assessment considers the costs and benefits to consumers, domestic winemakers and the Federal Government of maintaining the status quo or increasing the limit, with FSANZ ultimately recommending that the amendment should proceed. Maintaining the status quo has the effect of increasing costs for winemakers (and potentially consumers as a flow on effect) resulting from regulatory action against winemakers for non compliance with the Code while the wine is being produced. Increasing the limit may, however, result in more wine being available to consumers, while reducing the need for government regulatory action enforcing the unamended Standard 4.5.1. FSANZ has sought comments on its draft assessment report.
Food derived from Glufosinate ammonium-tolerant rice LLRICE 62Iste Bayer CropScience Pty Ltd is seeking to amend Standard 1.5.2 of the Code to approve food derived from LLRICE 62, a genetically modified (GM) line of rice which, via the addition of a bacterial gene 'bar', is tolerant to the herbicide glufosinate ammonium. The bar gene encodes an enzyme which inactivates the herbicide, thereby providing growers with a line of rice that allows for more effective weed control without affecting crop. It is intended LLRICE 62 will be grown overseas. However, once its grain becomes commercialised, rice products imported into Australia and New Zealand could contain LLRICE 62 derivatives. Standard 1.5.2 of the Code requires that GM foods undergo a pre-market safety assessment before they can be sold in Australia and New Zealand. FSANZ released an initial assessment report, accepting the application for a number of reasons, including (among others things) that:
FSANZ is inviting public comment on the report. Responses have especially been sought on the scientific aspects of the application, in particular, information relevant to the safety assessment of food from LLRICE 62. Comments that would be useful include:
These responses will be used by FSANZ to develop the next stage of the application and to prepare a draft assessment report.
Approval of new line of genetically modified soybeansMonsanto Australia Ltd is seeking to amend Standard 1.5.2 of the Code to approve food derived from a GM soybean, MON 89788. MON 89788 has been genetically modified to be tolerant to the herbicide glyphosphate. An earlier line of glyphosphate tolerant soybean, line 40 3 2, is already approved under Standard 1.5.2. The two lines are equally resistant to glyphosphate, but MON 89788 produces greater yields. Australia and New Zealand import a considerable quantity of soybean and soybean products from the United States, a key market for production of MON 89788 soybeans. If the application is approved, imports of soybean and soybean products will likely contain MON 89788. Allowing the application may be of interest to other World Trade Organization members, as accepting the safety of GM food is likely to have a liberalising effect on international trade. FSANZ is now accepting submissions on a range of issues relating to the application to assist it in the draft assessment of the application, particularly:
The draft assessment will include a full safety assessment of MON 89788 to assess its safety for human consumption.
Isomaltulose as a novel foodPalatinit GmbH has applied to amend Food Standard 1.5.1 to include isomaltulose as a novel food. A novel food is defined in the Code as 'non-traditional food for which there is insufficient knowledge in the broad community to enable safe use in the form or context in which it is presented...'. FSANZ has classified isomaltulose as a non-traditional food due to the fact that it does not have a history of significant human consumption in Australia or New Zealand. Isomaltulose is a nutritive sweetener that is a disaccharide made up of glucose and fructose joined by an Ą-1,6 glycosidic bond. Isomaltulose is naturally present at a low level in sugar cane juice and honey. It is proposed that isomaltulose will be used as a slow release carbohydrate in a variety of foods, inducing beverages (such as soft drinks), cereals, milk based products, confectionery (including hard candies, soft candies and chocolate) and other snack foods. Under Standard 1.5.1, a novel food is required to undergo a pre-market safety assessment. The concern with isomaltulose is that certain individuals may lack the enzyme isomaltase to break down the disaccharide, which could have negative health effects for those individuals. In addition, individuals that are fructose intolerant, and not aware that isomaltulose is broken down into fructose, may mistakenly consume such isomaltulose based products. FSANZ has conducted investigations into such risks, attaching to the draft assessment report a draft safety assessment report and an exposure assessment report. Public comment is sought on the above reports, with the deadline for public submissions at 6pm (Canberra time) 7 February 2007. The reports are available on the FSANZ website.
For further information, please contact:
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