Country and place of origin claims
Country of origin claims
Country of origin claims are representations about where a product’s ingredients or components came from and/or where it has undergone processing. Country of origin claims can be made using words and/or pictures. Common country of origin claims are that a product was ‘made’, ‘produced’ or ‘grown’ in a certain country.
If you supply food products in Australia, it is likely that you will be required to comply with the Country of Origin Food Labelling Information Standard 2016. The Standard was made under the ACL and requires mandatory origin labelling for certain foods.
If you believe you sell or supply food that may be covered by the Food Labelling Information Standard, you should refer to our Country of origin food labelling guide for information on how to comply.
The ACL doesn’t require non-food products to carry country of origin labelling, although other laws may do so. Businesses can however, choose to make country of origin claims about these goods.
All businesses, whether they are legally required or choose to display country of origin labelling, are prohibited from making false or misleading representations or engaging in misleading or deceptive conduct about the origin of goods (both food and non-food).
If a reasonable conclusion from the use of particular words or images is that a good was grown, made or produced in a particular country when that is in fact not the case, there is a risk of breaching the ACL. It’s your responsibility to ensure you have a reasonable basis for any and all claims you make about goods. It’s not a defence, or an excuse, to say that you ‘didn’t know’ your country of origin claim was misleading.
To help businesses that wish to make country of origin claims regarding their goods, the ACL provides defences (‘safe harbours’) for certain claims. The defences relate to claims a product:
- was ‘Made in’ a particular country
- is the ‘Product of’ or ‘Produce of’ a particular country
- was ‘Grown in’ a particular country
- carries a text and graphic country of origin label (referred to as a ‘mark’) under an Information Standard relating to country of origin labeling.
If a business is able to meet one of the ‘safe harbours’, then the relevant claim is automatically deemed not to be false, misleading or deceptive.
‘Made in’ claims
These claims are about production process rather than content. A product with a ‘Made in Australia’ label will not necessarily contain Australian ingredients or components. To establish the safe harbour defence the goods must have been substantially transformed in the country of origin being claimed.
A product is ‘substantially transformed’ in a country if:
- it was ‘grown’ or ‘produced’ in that country or
- as a result of one or more processes in that country, the end product is fundamentally different in identity, nature or essential character from all of its imported ingredients or components.
It will not be sufficient for the purposes of the ACL for a product to be somewhat different from its imported parts. Mere changes to the form or appearance of imported goods will not satisfy the substantial transformation test.
‘Product of’ claims
Traders who wish to alert consumers that their good is the ‘Product of’ or ‘Produce of’ a country can establish a safe harbour defence by demonstrating that each significant component or ingredient of the goods originated in the country, and all, or virtually all, of the production processes took place in the country.
When determining whether something is a significant ingredient or component, businesses should consider the importance of the ingredient or component to the nature or function of the product. An ingredient or component does not have to be a certain percentage to be ‘significant’.
‘Grown in’ claims
To establish the ‘Grown in’ safe harbour defence, a business would need to demonstrate that each significant ingredient or significant component was grown in the country of the claim and all, or virtually all, of the production or manufacturing processes happened in that country.
Real case study
The Federal Court ordered a Queensland retailer to pay $55 000 in penalties after it admitted it made false or misleading claims that sheepskin and wool bedding products:
- were made in Australia when they were not made in Australia
- contained 100 per cent sheep wool when the products were made of a blend of wool and polyester
- contained 100 per cent alpaca wool when the products only contained up to 20 per cent alpaca wool.
Case law: Federal Court of Australia— FCA 1123
Media release: Gold Coast retailer pays penalty for false or misleading Australian made and 100 per cent wool claims
Providing additional information
A business may choose to provide additional information and make other claims about a product on its packaging. This could include a breakdown of where individual ingredients or components were grown or produced, a non country place of origin claim (e.g. ‘Made in Byron Bay’) or a claim about the ownership of the business that made it (e.g. ‘100% Australian owned’).
Businesses are entitled to make additional representations on their packaging label. However, if they do so, they must ensure the representations are accurate, truthful and compliant with the law. Furthermore, any additional claims or representations should not negate or contradict the information contained in the product’s country of origin label.
Tip: It is important to note that the safe harbour defences in the ACL do not apply to non-country place of origin claims.
A number of schemes exist to give customers confidence in claims made about goods. Many products carry a logo or other trademark to show they are certified by a particular scheme or have a recognised standard of quality or performance. Credible schemes will provide detailed information about the basis on which they make claims, such as recognised standards.
Related publication: Certification trademarks: the role of the ACCC