By Joe Lederman
Readers may be aware that Standard 1.2.11 of the Australia New Zealand Food Standards Code (‘ANZFSC’) sets out the labelling requirements concerning information that must be provided about the country of origin of food products. However, some consumers are expressing new concerns as to where food ingredients are grown, processed or manufactured. Previous FoodLegal Bulletin articles have explored many aspects of this Standard in depth, but this current article addresses two recent controversies that have re-ignited some issues.
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Foreign Beers made locally under licence
A spokesperson for the Australian consumer organisation CHOICE was reported in Melbourne’s Sunday Age newspaper in an article on 21 December 2008 as expressing dissatisfaction that foreign beers made in Australia under licence had different tastes from beers bearing the same name or brand that were made in their original countries. It is quite common for Australian breweries to obtain a licence from a foreign brewer which confers the rights to produce and market particular foreign brand beer products in Australia. For example, Foster’s Australia manufactures Guinness, Stella Artois and Carlsberg, all of which are foreign brands, under licence in Australia.
The Sunday Age article stated that CHOICE had suggested the need for clearer, more prominent labelling on the bottles of these products so consumers would become aware of exactly what they were buying and so that consumers could be made aware that the taste may differ from the original country’s version. For example, the label on a bottle of Carlsberg, which is brewed by Foster’s Australia in Australia, currently states ‘Copenhagen, Denmark’ and ‘by appointment to the Royal Danish Court’, and some consumers might arguably be misled.
There is therefore a legal risk that consumers can interpret names, descriptions or designs of a product as having been manufactured elsewhere but purchase it without realising it has been made in Australia. The Australian Competition and Consumer Commission (‘ACCC’) emphasises in its Food Descriptor Guidelines (issued in November 2006) that labelling may potentially breach the Fair Trading provisions of the Trade Practices Act, such as sections 52, 53 (in particular 53(eb)) and 55, if the product’s label conveys a misleading impression or representation. These Guidelines state on page 5 that the key issue to consider for this ‘do not mislead’ principle is the overall impression that a representation will leave in the mind of consumers:
“A selling approach, promotion or label that seems clear and well structured to its designers can still mislead its intended audience....It is therefore necessary to consider whether the advertising or labelling message could mislead susceptible, gullible or vulnerable members of the public.”
However, the Sunday Age article reported that a spokesman from Lion Nathan (which makes Heineken, Beck’s and Kirin beers in Australia) had said that its bottles were clearly labelled and that consumers were protected by the strict brewing guidelines set by the foreign brand owners overseas. The article also reported that local breweries defend their rights to make foreign brand beers in Australia, claiming the beer actually tastes better simply because it is fresher.
Chinese Honey sold as 'Made in Australia'
The Australian newspaper on 1 January 2009 reported that Australia was still caught up in an international “honey laundering” scam in which Chinese honey had been disguised as being sourced in Australia.
In 2003, the ACCC took court action against a Japanese company, Ixon Japan KK and its Australian partner, Ikuson Trading Company Pty Ltd, for mislabelling a Chinese honey drink as a ‘Product of Australia’. Made from mostly Chinese honey, the product had been manufactured and bottled in China. It contained approximately 2 per cent Australian-sourced honey. The product was shipped to Australia where it was re-labelled as an Australian-made product. The Federal Court held that the companies had breached Section 52, 53(a) and 53 (eb) of the Trade Practices Act 1974 by misrepresenting the honey drink as being Australian when the main ingredients were from China and it was manufactured and bottled in China.
Australian honey growers have complained that Australian honey remains on a blacklist along with 13 other countries whose honey products are required to be carefully checked on entry into the United States. This jeopardises the export business for real Australian-grown honey. However, Australia has a very strict regime for fulfilling its international obligations. In accordance with the Industrial Property Convention, the Federal Parliament introduced section 55 to the Trade Practices Act 1974, which provides:
Misleading conduct to which Industrial Property Convention applies
A person shall not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose or the quantity of any goods.”
Furthermore, Australia has a prescribed regime in sections 65AC, 65AB and 65AD of the Trade Practices Act which provide the tests for making ‘made in’ and ‘product of’ claims and use of a prescribed logo of a particular country of origin. It is in the interest of the reputations of Australian producers that Australian governments and Australian courts enforce these aspects of the Trade Practices Act.
Passing Off and Intellectual Property Protection
Passing off is a common law tort which can be used as the basis for initiating legal action to enforce protection of the market reputation of a food producer from being taken advantage of by someone else. Similarly, legal action can also be brought under section 52 of the Trade Practices Act for this type of conduct where a competitor trying to ‘pass off’ their product as another’s is conducting their business in a manner that may mislead or deceive consumers. Australian honey growers and the ACCC are able to consider legal action against any false labelling by imposters.
A classic example of a similar action was that of the case Twentieth Century Fox Film Corp v South Australian Brewing Co Ltd (1996) 66 FCR 451 where Twentieth Century Fox brought an action against the South Australian Brewing Company for marketing a new beer under the name “Duff Beer”, the name that had been created for a merchandisable brand created in its television show “The Simpsons.”
Trademark rights are also a potential legal weapon to protect the international reputation of an Australian product and are enforceable internationally. Registering certification marks and logos that create an industry-wide reputation are being utilised internationally for this purpose.
However, Australian government intervention may also be desirable in a range of circumstances. First of all, the Australian government may be the best party to intercede and assist Australian producers in tackling foreign fraud, and co-ordinating the appropriate referrals through Interpol and other crime-fighting networks and enforcement agencies in particular jurisdictions, as well as in exercising Australian legal rights through intellectual property enforcement agencies under international treaty laws to which Australia is a signatory. Secondly, the Australian government is often the best-placed entity to negotiate with foreign governments for the removal of legal restictions that discriminate unfairly against Australian food products.
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