FoodLegal Bulletin, June - July 2009

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The Australian Competition and Consumer Commission (ACCC) has released an update on its earlier guide for the food industry in relation to compliance with the Trade Practices Act. Our article examines what new positions the ACCC has taken concerning the marketing of food by reference to a particular ingredient or component.

In a number of circumstances, an important legal issue concerns whether a substance which is derived from food is simply a food ingredient or must be considered a food additive. The distinction can be critically important because food additives are subject to much stricter regulations than food ingredients.

The distinction as to whether a substance is a food or a food additive can also be vital to whether a product can be legally marketed as being “natural”. FoodLegal has organised a forum of speakers on “natural” claims in food marketing for its forthcoming 10 August 2009 Symposium. Please go to www.foodlegal.com.au/training/coursedetails/ for more details. Registrations close on Monday 3 August 2009.

The following article of 1,400 words clearly explores FSANZ’s distinction between a food additive and a food ingredient.

Read further on additional recent food law developments, including:

• New nationwide consumer laws to be introduced
• How Australia’s obesity policy may affect food marketing
• Consultation paper on Infant Formula Products released
  
• Voluntary Carbon Reduction labelling scheme to be introduced
• Container Deposit Levy legislation blocked by Victorian Lower House
  
• GM wheat trials are causing more controversy in Australia
• New food safety regulatory Bill introduced to Victorian Parliament

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As of 13 September 2009, bread-making flour in Australia will be fortified with folic acid as mandated by the Federal Government agency, Food Standards Australia New Zealand (FSANZ). However, developments in overseas jurisdictions and new scientific evidence are raising more questions that our government agencies have yet to answer satisfactorily.

On 5 June 2009, Justice Perram of the Federal Court handed down his decision in the case Mars Australia Pty Ltd v Sweet Rewards Pty Ltd [2009] FCA 606. This case is particularly interesting because the smaller guy won, and the judge highlighted various risks for all food marketers where a product’s get-up looks similar to a competitor’s product.

Out of the 2008 Grocery Price Inquiry conducted by the Australian Competition & Consumer Commission, the Rudd Government made a number of attempts to increase competition among grocery retailers. Some of these, such as the GroceryChoice website, have foundered completely. On 25 May 2009, the Trade Practices Act was amended by the introduction of a new Section 53C. This is the latest of recommendations being implemented from the Grocery Price Inquiry. Other measures have previously included amending the Horticultural Code of Conduct and introducing a national unit pricing scheme. While Section 53C seems to be aimed at the vendors of airline tickets, motor vehicles and insurance policies, the broader application of Section 53C to common practices in the marketing of food could have a number of adverse consequences.

On 30 April 2009, the High Court of Australia handed down a decision which limited the legal protection previously provided to advertisers or publishers of false or misleading information. Up till now, a publisher or media outlet was generally exempt from liability under the Trade Practices Act if merely reporting a statement that turns out to be false. This article explores the new legal understanding of the "publisher's defence" and highlights when legal protection may not be available.

In response to an article in our April 2009 issue of FoodLegal Bulletin, we received a letter to the Editor from Mr Steve McCutcheon as Chief Executive Officer Australia’s food standard-setting agency, Food Standards Australia New Zealand. The letter outlines a division in legal responsibilities for detection and enforcement of the regulations governing agricultural and veterinary chemicals used in Australia and contaminants in the food supply.