Current developments in food law and policy

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FoodLegal Lawyers and Consultants

© Lawmedia Pty Ltd, November 2011

• Food Standards Code Applications, Proposals and new Amendments
• Update on Australia’s National Food Plan
• ACCC’s current views on supermarkets’ market power
• Energy drinks: international developments
• Woolworths and “Woollies” domain name dispute
• FSANZ in court action initiated by anti-GM activists  

  1.      Food Standards Australia New Zealand (FSANZ) news:

(a)             Some important recent FSANZ Applications and Proposals:

-          Proposal P1014– Primary Production & Processing Standard for Minor Meat Species & Wild Game: to develop an Australia only primary production and processing standard for meat and meat products from minor species and wild game to provide a nationally consistent approach to the management of meat safety for such products. FSANZ has completed an Administrative Assessment of this Proposal. An opportunity to comment will be available at a later date which will be publicly notified.

-          Application A1061 – Amylomaltase as a Processing Aid (Enzyme) to permit the use of a new enzyme processing aid, the amylomaltase is sourced from Bacillus amyloliquefaciens containing the gene for amylomaltase isolated from Thermus thermophilis, (or use to produce modified starch products as an ingredient   in dairy products. FSANZ invites written submissions on the assessment of this application by 6pm (Canberra time) 14 December 2011.

-          Application A1056 – Dimethyl ether as a processing aid for dairy ingredients and products; and in Application A1062  as a processing aid for non-dairy ingredients and products.  

FSANZ has received the application from Fonterra for the use of dimethyl ether as a processing aid in dairy ingredients and an application from Industrial Research Limited to use dimethyl ether in non-dairy ingredients. Widely recognized as a processing aid overseas, dimethyl ether is currently undergoing a safety assessment by FSANZ. The period for submissions closes 6 December 2011.

-          Application A1063 – Food derived from Herbicide-tolerant Soybean MON87708: FSANZ has received an application to seek permission for food derived from a genetically modified soybean to provide tolerance to the herbicide Dicamba. The period for submissions closes 29 November 2011.

(b)             Amendments to the Australia New Zealand Food Standards Code:

Amendment No. 126 to the Australia New Zealand Food Standards Code was published by FSANZ on 13 October 2011 (FSC 68). It included amendments resulting from the following Applications:

Application A1026 – Minimum Alcohol Content for Wine.

Application A1042 – Food derived from Herbicide-tolerant Corn Line DAS-40278-9.

(c)             Amendments to Maximum Residue Limits (MRLs) Australia only (Standard 1.4.2)

The Australian Pesticides and Veterinary Medicines Authority (APVMA) has notified FSANZ of applications or variations to the APVMA MRL Standard that the APVMA considers will likely result in variations to Food Standard 1.4.2 if granted.

More information on these notifications can be obtained at http://www.foodstandards.gov.au/foodstandards/changingthecode/maximumresiduelimits/ .

The APVMA has called for public comment on a number of proposed variations to Standard 1.4.2. Information can be found on the APVMA website at [http://www.apvma.gov.au/publications/gazette/index.php ].

(d)            FSANZ requests feedback on CIS issue

The FSANZ Code Interpretation Service (CIS) is requesting feedback regarding Standard 1.2.2 - food identification requirements. This is relevant to regulatory issues concerning parallel imports - our subscribers can refer to our earlier FoodLegal Bulletin article “Parallel importing and traceability”. 

  2.      Update on Australia’s National Food Plan – White Paper in development

The development of a National Food Plan (NFP) was a key promise of the Labor Party-led government in 2010 during its 2010 election campaign.

The first step towards creating the NFP was taken on 23 June 2011 with the release by the Federal Government of an Issues Paper for public consultation. Submissions that were received during the consultation period can be accessed here.

Federal Agricultural Minister Joe Ludwig has confirmed the government will now begin the process of developing a White Paper.

This process is to begin by the government preparing and releasing a Green Paper (canvassing the government’s “vision” and potential changes to policy and governance arrangements). Following a period of public consultation, the White Paper will then be developed.

The objectives in the original policy announcement during the Federal election were described as “identifying and mitigating potential risks to Australia’s food security, supporting the long-term economic, environmental and social sustainability of Australia’s food supply chain and reducing barriers to accessing international and domestic markets”.

The NFP is now expected to have a broader scope and will cover additional issues such as food security, productivity and efficiency, sustainability, health and nutrition and general economic policy relating to the food sector.

Interestingly, national food policies have moved to a high priority ranking on the agenda for many national governments all around the world. For example, in January 2011 the UK government released The Future of Food and Farming: Challenges and choices for global sustainability, a report which recommended a complete “redesign of the whole food system”.  

3.      ACCC willing to scrutinise supermarkets but claims need for more powers 

New chairman of the Australia Competition and Consumer Commission (ACCC) Rod Sims has hinted at the need for tighter regulation of Australia’s supermarkets:

“The two major supermarkets have significant market power, with many smaller suppliers feeling they lack a real ability to negotiate supply arrangements. The ACCC can and will watch closely to ensure any such dealings do not involve unconscionable conduct by the supermarkets”.

The strong concentration of supermarket power in Australia recently led to a joint submission by the Australian Food and Grocery Council (AFGC) with consumer advocacy group CHOICE to the Senate Committee investigating the impact of supermarket “price wars” on the dairy industry. Traditional rivals, AGFC and CHOICE, jointly called for the introduction of a Supermarket Ombudsman to police supply chains. For our commentary on this proposal, see the September 2011 issue of FoodLegal Bulletin.

In press releases, the ACCC has flagged two sections of the Competition and Consumer Act 2010 which it considers particularly relevant to supermarkets with significant market power: sections 21 and 22 relating to “unconscionable conduct” and section 46 which regulates unilateral misuse of market power.

At present, there are few legal precedents on the “unconscionable conduct” provisions while many past prosecutions under section 46 have failed. The ACCC has said it will seek legal clarification of both these sections, and if necessary ask for additional powers to fully deal with supermarkets’ significant market power. The other problem for the ACCC is the lack of available evidence in the absence of adequate protective legal mechanisms for suppliers. This raises concerns about the ACCC needing further independent investigative powers. Such powers might facilitate the ACCC obtaining evidence of its own volition from supermarkets without any need to reveal the name of an adversely affected supplier. The current evidence gathering processes of the ACCC require substantial voluntary disclosures by suppliers. Many suppliers are fearful that such disclosures will put them out of business, because the supermarket buyers would not be happy with a supplier who has made such a disclosure and might be tempted to sever that supplier’s relationship.  

4.      Energy drinks – regulatory developments in Canada and beyond

Energy drinks are non-alcoholic beverages characterized by the addition of “energy enhancing” ingredients (such as water-soluble B vitamins, amino acids and other substances, and caffeine).

The Canadian government has announced it will revise its regulation of energy drinks.

Canadian Health Minister Leona Aglukkaq is moving to change the Canadian system for classification of energy drinks from being in the category of a “natural health product” to being regulated instead as “food”. In Australia, most energy drinks are already regulated as foods.

The Canadian shift from regulating the drinks as “natural health products” to considering them to be “foods” means the popular beverages will have to carry labels listing their ingredients, allergens and nutrition information.

In addition, the proposed Canadian energy drink legislation will impose the following obligations:

-          A cap on the concentration of caffeine that can be included in an energy drink at 180 mg per single serving.

-          Product labels must indicate the levels of caffeine in the product (in addition to current labels that identify groups for whom high levels of caffeine are not recommended).

-          Product labels are required to include an ingredient, nutrition and allergen declaration, as with all other food products in Canada.

-          A requirement for vitamins and minerals to be within safe levels.

-          A warning statement advising consumers not to mix the product with alcohol.

Under the proposed new laws, Canadian energy drink manufacturers will also be required to report any consumer health complaints associated with their products to the government’s health department.

Most of the energy drink products on the Canadian market already meet the caffeine caps that will allow them to be sold as foods but many companies will have to make is to revise their labeling for Canada.

Health Canada will be working with industry over the next six months to coordinate the transition. It is expected that there will be a two year transition period for companies to comply. 

5.      Woolworths wins back “Woollies” domain name

On 5 October 2011, the World Intellectual Property Organization (WIPO) Arbitration and Mediation Center administrative panel gave its decision in the matter of Woolworths v Save Cash Pty Ltd [2011] AUDND 29.

The complaint from Woolworths was filed with the WIPO Arbitration and Mediation Center on August 5 2011 after the respondent (Save Cash Pty Ltd) which was apparently engaged in the business of selling motor vehicles registered the domain name on March 24, 2011.  Woolworths had previously registered WOOLLIES as an Australian Registered Trademark for a variety of goods and services including online retailing.

Under the WIPO “.au Dispute Resolution Policy” Rules, Woolworths was required to establish:

(a)   The Domain Name is identical or confusingly similar to a name, trademark or service mark in which Woolworths has rights;

(b)   The Respondent (Save Cash Pty Ltd) has no rights or legitimate interests in respect of the Domain Name; and

(c)   The Domain Name has been registered or subsequently used in bad faith.

The Panel found each of these elements proved and ordered that the domain name be transferred to Woolworths.

  6.      Gene Ethics pushes FSANZ into Federal Magistrates Court over Irradiated Food application 

The organization Gene Ethics, which is a group dedicated to anti-genetic modification (anti-GM) advocacy, has initiated proceedings against Food Standards Australia New Zealand (FSANZ) in the Federal Magistrates Court. The trial was scheduled to begin on Monday 14 November 2011 before Justice Kenny.

The application to the court claims FSANZ failed to comply with the law that requires it to give complete and clear public notice by inserting a general review of Irradiated Food Standard 1.5.3 without public notice into a Queensland government application only to irradiate persimmons (proposal A1038).

FoodLegal will address this case in a future issue.