Consumers may be influenced by a number of factors when buying goods, including claims about where a product was grown, produced or made. If you choose to make a country of origin claim, or are legally required to do so, it must be clear, accurate and truthful.
Our frequently asked questions provide detailed information about aspects of the labeling system.
In February 2017, the Government passed the Competition and Consumer Amendment (Country of Origin) Act 2017 amending the definition of ‘substantial transformation’.
Under the definition goods are substantially transformed in a country if:
- they were ‘grown’ or ‘produced’ in that country, or
- as a result of one or more processes undertaken in that country, the goods are fundamentally different in identity, nature or essential character from all of their imported ingredients or components.
Processes that only change the form or appearance of imported ingredients or components no longer qualify as a ‘substantial transformation.’
This new definition has immediate effect. Businesses that currently make ‘made in’ claims about their products should reassess whether they are still able to safely make these claims.
In the ACCC’s view, the encapsulation of imported marine oil is unlikely to constitute a ‘substantial transformation’ for the purposes of the ACL. This is because the process of encapsulation is unlikely to create a fundamental difference in identity, nature or essential character between the oil capsules (final product) and the imported oil.
While encapsulating the oil appears to result in a product that is more convenient in form, we do not consider that this would satisfy the ACL criteria for safely making a ‘made in’ claim.
As the encapsulation of imported marine oil is unlikely to qualify as a ‘substantial transformation’, businesses should carefully consider whether it would be appropriate to make a ‘made in’ claim for these products.