Do you manufacture, sell or distribute goods for sale in Australia? Will you claim your products are made in a particular country? If so, you need to consider your obligations under the Australian consumer law.

By saying that you made something, you are making a claim about the manufacturing process which your customers may rely on. It is your responsibility to ensure the claim is truthful, clear and accurate.

Before you say your products are ‘made in’ a particular country, you should ask yourself whether they were ‘substantially transformed’ in that country.

But what does that mean, exactly?

Well, a good is substantially transformed if it was grown in or produced in that country, or processing in that country has created a product that is fundamentally different in identity, nature or essential character from its imported ingredients or components.

Take for example, a t-shirt. If you import fabric and cut and sew it into a t-shirt, then you have substantially transformed the fabric into a different product. But it’s not substantial transformation if you only add a logo to an imported t-shirt.

The same applies if you only paint a chair or put eyelets on a shoe.

Processes like this which only serve to finish off a product will not result in a fundamentally different product.

How about food?

If you use imported ingredient to make an apple pie you will have created something fundamentally different from the imported ingredients you started with.

But, processes that only change the form or appearance of an imported food, like grating cheese, crumbing fish, or adding water to an orange concentrate to make juice will not be a substantial transformation of those imported ingredients.

You should think twice about saying your product is made in a country unless processing in that country has clearly resulted in a fundamentally different product.

You can face penalties if you make a false or misleading claim about where you made your product.

A product can claim to have been last substantially transformed in a country if:

  1. it was ‘grown’ or ‘produced’ in that country, or
  2. processing in that country has resulted in an end product that is fundamentally different from its imported ingredients or components in either:
  • identity or
  • nature or
  • essential character.

Examples

The following would be a substantial transformation:

  • the mixing and baking of raw imported ingredients into food items e.g. combining butter, sugar, flour and eggs and baking a cake

  • moulding imported sheet metal into a car panel

  • building a table from imported wood.

The following wouldn't be a substantial transformation:

  • chopping up imported fruit to make a fruit salad

  • printing a design onto an imported t-shirt

  • cutting blocks of imported soap into individual bars.

This means that businesses should be careful when making a 'made in' claim about products with imported ingredients or components. If processing in that country hasn't clearly resulted in a new product with identifiably different characteristics you are at risk of breaching the ACL.

For example, if the processing undertaken has only served to add decorative elements or 'finish off' the product (like adding buttons onto an imported jacket or browning imported par-baked bread), this would not be enough to support a 'made in' claim.