Focus on product hoodwinks: ACCC

28 Jan, 2015 01:00 AM
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ACCC's Dr Michael Schaper.
Credence claims have become an increasing priority area for the ACCC in the past couple of years
ACCC's Dr Michael Schaper.

JUST about every farmer wants the chance to get a premium-paying price for selling product into niche markets - and so too, do some less-than-truthful food marketers.

Regional provenance credibility and the good reputation of niche brands are big marketing earners for farmers and food processors if they get it right.

But the Australian Competition and Consumer Commission (ACCC) is increasingly finding examples of players hoodwinking consumers and devaluing the credibility of other farmers' efforts.

Last year provided quite a few notable highlights including the $30,000 fine for company Basfoods which sold the Victoria Honey brand for more than six years.

The contents were not necessarily 100 per cent honey, and it didn't come from Victoria.

What appeared to be Australian product marketed under the Victoria Honey name was found to be a mix of ingredients including corn and sugar cane syrup, which between 2011 and 2013 were sourced from Turkey, misrepresenting the brand to shoppers at supermarkets, specialty retailers, delicatessens or buying online.

Labelling frustration

While the inadequate country of origin labelling issue is a festering sore for many producer and consumer groups and politicians, ACCC deputy chairperson Michael Schaper said misleading or deceptive packaging and labelling of local food products was increasingly causing plenty of frustration.

The consumer watchdog received 450 direct complaints or inquiries about the correctness of food labels in 2013-14 - a jump of about 100 on the previous year.

"I can't talk about what we're investigating at present, but we could see some more interesting examples in court in 2015," Dr Schaper said.

"Credence claims have become an increasing priority area for the ACCC in the past couple of years."

Free-range descriptions or label images were "classic examples of labels or brands creating an impression of products in the mind of a typical Australian consumer which sometimes isn't correct".

He said rural traders or producers who were bone fide free-range egg or meat operators invariably lost out because their costs and production efforts tended to be considerably greater than conventional producers, some of whom tried to cash in on that premium without producing proper free-range product.

Court actions in the past year or two had resulted in fines ranging from $50,000 to $400,000 for products sold with labels misrepresenting the stocking density and flock grazing conditions of poultry.

Point of origin claims

Regional locality of origin was also a key credence factor for agricultural products.

Noting the misuse of the prized King Island brand, Dr Schaper told a recent Agribusiness Association of Australia meeting how a Melbourne butcher was caught trading as King Island Meats without sourcing any product from the verdant Bass Strait beef and dairy locality.

Technically there was nothing wrong with a mainland business adopting the name, but he said Bass Strait producers had already built the brand to help overcome considerable isolation and cost challenges involved in delivering their products which promoted the environmental purity of King Island pastures.

"They should not be disadvantaged by others eroding the consumer perception of their name," Dr Schaper said.

Similar cases of credence fraud included beer giant Carlton and United Breweries (CUB) being fined $20,000 in April for misleading customers on the origin of Byron Bay Pale Lager, brewed 600 kilometres from Byron Bay where the company claimed it was made.

The ACCC noted a small local brewer did make and sell some lager at Byron Bay, but CUB was licensed to sell it Australia-wide and produced the beer just north of Sydney despite actively marketing its origin as the popular North Coast holiday and artistic retreat district.

The ACCC's interest in the credence of labelling and marketing claims reflected increasingly proactive moves by some farmer industry groups in insuring members' products and reputations were protected.

Protecting Barossa Valley brand

Much more work needs to be done to protect the regional identity and integrity of food lines originating from valued production areas such as South Australia's Barossa Valley, says brand marketing executive Peter Fuller.

He questioned how a diverse variety of products grown or made outside the State's premium wine and food market 'sweet spot' were allowed to carry the Barossa name.

Quizzing Dr Schaper at the Agribusiness Association of Australia's Adelaide breakfast, Mr Fuller said more companies seemed to be cashing in on the Barossa tag without being closely associated with the region or using big and consistent volumes of its produce.

He cited companies ranging from a cordial maker to an Adelaide house builder and even a guitar manufacturer with instruments carrying the respected McLaren Vale and Barossa names.

"While our wine industry went a long way down the track to preserving the regional integrity of its products because the international wine community demanded it, we don't seem to have the same level of stringency in other food categories in Australia, despite the premium market value some of these regions represent," he said.

Mr Fuller is the principal of the Fuller brand and communication business which worked closely with Barossa wine makers to build that region's international profile in the wine sector between 1993 and 2006.

"It strikes me the rest of the food industry has a lot of work to do to catch up with the sort of providence branding and regional integrity requirements expected in the wine industry," he said.

Dr Schaper said law generally prohibited misleading or deceptive conduct based on the impression consumers were likely to gain from the way a food product was promoted or labelled.

If consumers or food producers felt a label was misleading or unfair to a region's credibility they could make their concerns known to the ACCC.

Greens' move to legislate definitions

Meanwhile, Greens Leader Christine Milne used Australia Day this week to ramp up the campaign for country of origin food labelling.

The Greens intend to re-introduce a bill for mandatory labelling when federal parliament returns.

"Australia's farmers and food manufacturers are under pressure," Senator Milne said.

"Everyone wants to support our farmers by buying local products but our current labelling is too confusing."

She said all political parties supported a simpler system, but found excuses to block legislative changes in order to appease big corporations.

Under the Greens bill the description "product of" or "grown in" would refer to food wholly grown and processed in a country.

"Manufactured in" would mean food substantially transformed in a particular country and the term "made in" would no longer be used as many consumers felt it referred to where the ingredients were grown.

Confusing terms such as "made from local and imported ingredients" would be prohibited.

Companies would also be urged to highlight significant local ingredients, for example chocolate "Manufactured in Australia with Australian milk".

FarmOnline
Andrew Marshall

Andrew Marshall

is the national agribusiness writer for Fairfax Agricultural Media

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