Recent Developments in Food Law and Food Policies

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By Joe Lederman

FoodLegal Lawyers and Consultants

© Lawmedia Pty Ltd, April 2011

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1. South Australia to introduce 3 hour alcohol ban
2. Senate Select Committee established on the Australian food processing sector
3. The 6th Food and Health Dialogue discusses food reformulation
4. Sanitarium introduces its own Front of Pack Labelling system
5. Woolworths and organic retailer engaged in trademark legal battle
6. US lawsuit against Coco-Cola for “Diet Coke Plus” dismissed

1. South Australia to introduce 3 hour alcohol ban

On the 22 March 2011, the Consumer Affairs Minister of South Australia, Gail Gago, released plans by the South Australian Government to introduce a mandatory three-hour daily halt in trade for hotels, clubs and entertainment venues.

The mandatory halt between 4am and 7am is intended as a measure to deal with alcohol-related crime. These changes are to be part of the Liquor Licensing (Miscellaneous) Amendment Bill 2011 (SA) introduced in the South Australian Parliament in March 2011.

If passed, the 3 hour mandatory ban will apply to all hotels, clubs, entertainment venues, and premises covered by special circumstances licences, other than casinos. The proposed amendments will also give extra powers to the Liquor and Gambling Commissioner and the Police Commissioner for the purposes of enhancing public safety.

The proposed Bill is not expected to be debated until May. This is to allow time for public submissions. A draft Code of Practice for licensed venues has also been released for public comment. Compliance with this Code of Practice will be mandatory under section 42 of the South Australian Liquor Licensing Act 1997.

This move by the South Australian State Government has attracted criticism from some sectors of the industry, claiming that these measures are too interventionist or claiming there is a risk of increased alcohol-related violence by its creating a “peak time” of patrons entering and exiting alcohol licensed venues.

2. Senate Select Committee established on the Australian food processing sector

On 24 March 2011, the federal Senate passed a motion to establish a Select Committee on Australia's food manufacturing sector. 

The Committee is expected to conduct an inquiry into various issues relating to the food processing sector, such as

(a)  the competitiveness and future viability of Australia’s food processing sector in the global markets

(b)  the regulatory environment for food processing and manufacturing companies, in particular on issues of taxation, research and development, food labelling, cross-jurisdictional regulations, bio-security, and export;

(c)  the impact of Australia’s competition regime and the food retail sector on the food processing sector, including the effectiveness of the Competition and Consumer Act 2010 (Cth);

(d)  the effectiveness of anti-dumping rules;

(e)  the costs of production inputs, such as raw materials, labour, energy and water;

(f)   the effect of international anti-free trade measures;

(g)  access to infrastructure, investment capital, skilled labour and skills training; and

(h)  other related matters

The Select Committee is expected report back to the Senate on the Inquiry by 30 June 2012. Any organisation or company wanting assistance in preparing a submission might wish to contact FoodLegal.

3. The 6^th Food and Health Dialogue discusses food reformulation

On the 25 March 2011, the Federal Parliamentary Secretary for Health and Ageing, Catherine King, chaired the sixth meeting of the Food and Health Dialogue, which is a collaborative initiative involving government, industry and public health groups, aimed at addressing poor dietary habits and promote healthier food choices for all Australians. 

The Dialogue focused on issues relating to:

• The Quick Service Restaurant sector, the provision of point-of-sale nutrition information at standard food outlets, which the Australia New Zealand Food Regulation Ministerial Council is currently working on.
• Reduction targets to be announced for salt in simmer sauces, and salt and saturated fat in processed meats. 
• Soups, processed poultry, savoury pies, cheese are the next priority categories to be considered for reformulation targets, with engagement with these sectors expected to commence in late 2011.
• Strategies to standardise and reduce portion sizes and improve consumer awareness of healthier food choices.

A new website for the Food and Health Dialogue is also due to be launched in July 2011 to better provide information to industry, consumers and public health groups on its activities.

4. Sanitarium introduces its own Front of Pack Labelling system

Coinciding with the recommendation by the Final Report of the Blewett Review on Food Labelling Law and Policy in favour of a front of pack multiple traffic lights labelling system, food manufacturer Sanitarium released (in April 2011) its own modified system of traffic lights labelling, which it called the “Healthy Eating System”.

This system differs from traditional multiple traffic light systems in that it combines a rating of both “good” and “bad” nutrients. This is not like the Blewett Review’s proposal, which would have a traffic lights system that focused solely on total fat, saturated fat, sodium, and sugar.

Unlike the model proposed by the Blewett Review, the Sanitarium “Healthy Eating System” includes traffic light ratings for so-called “good nutrients” such as protein, fibre, fruits, vegetables, nuts and legumes, and also the additional category of wholegrain added by Sanitarium.

In the Sanitarium system, the label incorporates (underneath the coloured traffic lights) a dietary advice statement: “Eat Often”; “Eat Occasionally”; or “Eat Sparingly”. While these advisory statements are said to be related to an assessment using similar criteria to the proposed FSANZ Nutrient Profiling Scoring Criteria (NPSC) for health claims, it is not clear whether the Sanitarium system would prevent the usage of its Traffic Lights labelling for a food that would fail the FSANZ NPSC. If not, then this would be a quite different approach to that which was recommended by the Blewett Panel Report.

Sanitarium has stated that its system would have an advantage over other traditional multiple traffic lights labelling systems, because of its distinction between foods which may have similar levels of ‘negative’ nutrients but different levels of ‘positive’ nutrients. Sanitarium also states that its system is better able to account for the nutritional benefit of wholefoods such as milk, even though milk contains saturated fat. (As FoodLegal has previously noted in a June 2010 FoodLegal Bulletin article, there are scientific findings about the beneficial cardio-nutritional effects of milk and, in particular, the relationship between calcium  and the mal-absorption of saturated fats in milk).

Sanitarium’s move is an illustration of a pre-emptive approach by a large food company to prove that its system can work more effectively than the alternative systems proposed by the government-appointed Blewett Panel. The Sanitarium action also highlights the dynamic nature of health-related or nutrition-related marketing for food. Clearly, food companies need not feel compelled to sit on their hands waiting for government officials to ponder which way to go in deciding to accept or reject the recommendations of the Blewett Panel Report in relation to front of pack labelling. Moreover, the move seems to lend emphasis to the impatience of food companies that have been waiting for about 15 years of government processes (so far) towards reaching a possible finalisation of the proposed new Health Claims Standard at some future date.

5. Woolworths and organic retailer engaged in trademark legal battle

An organic retailer, Organic Marketing Australia (the Applicant), has failed to obtain an interlocutory injunction in the Federal Court to stop supermarket Woolworths (the Respondent) from using the phrase “Honest to Goodness” in their marketing campaign.

The Applicant has been the registered owner of the trademark “Honest to Goodness” and been trading under the name for eight years. The Respondent’s latest marketing campaign, starring celebrity chef Margaret Fulton, also uses the phrase “Honest to Goodness” as a slogan.

While the applicant has alleged that the use of the term “honest to goodness” by the Respondent is damaging its reputation and infringing on its trademark, the Respondent maintains that “Honest to Goodness” is a common, non-distinctive phrase which can be freely used.

Justice Katzmann of the Federal Court refused to grant the interlocutory injunction, urging the parties to consider mediation. Her Honour considered the evidence and concluded that the damage to the Respondent in this instance far outweighs any damage to the applicant’s business that the continuation of the “Honest to Goodness” campaign may cause in the period before final judgment.

6. US lawsuit against Coco-Cola for “Diet Coke Plus” dismissed

In the United States, Coca-Cola has be granted its application for a motion to dismiss a lawsuit accusing it of deceiving consumers into believing its Diet Coke Plus cola drink is healthy.

In Mason v. Coca-Cola Co, the plaintiffs were two New Jersey residents who argued that they were misled by the use of the term "Plus" on Coca-Cola’s “Diet Coke Plus”. It was alleged that the word “Plus” connotes increased levels of vitamins and minerals. The plaintiffs also argued that the language "Diet Coke with Vitamins and Minerals” falsely suggested the soda was healthy and nutritious.

On 31 March 2011, Judge Hillman of the US District Court in New Jersey granted Coca-Cola’s motion to dismiss on the basis that the plaintiffs had not proven that Coca-Cola made false statements to them about the product. Citing an FDA letter which stated that the product contains at least 10 percent of the recommended daily intake of several vitamins and minerals, Judge Hillman held that the Plaintiffs have failed to allege with particularity what further expectations they had for the product or how it fell short of those expectations. On the issue of damages, the Court held that the plaintiffs failed to state with particularity that the product they received was of lesser value than what they were promised.