AUS: National Foods LTD Country of Origin Claims
National Foods Limited is voluntarily changing the labels of its strawberry yoghurt and strawberry Fruche® products to remove the "Product of Australia" representation following concerns expressed by the Australian Competition and Consumer Commission.
The ACCC was concerned that National Foods was engaging in misleading and deceptive conduct in regard to Country of Origin representations on strawberry Fruche® and yoghurt products. The Trade Practices Amendment (Country of Origin Representations) Act 1998 was introduced to remove the uncertainty surrounding the relevant test in relation to what is meant by a false or misleading representation concerning the origin of goods.
National Foods buys a fruit preparation from suppliers in Australia for use in manufacturing the products. The strawberries used in the preparation are imported. The ACCC was of the view that the strawberries within the fruit preparation are a significant ingredient.
Under Section 65AC of the Act, if a corporation makes a country of origin representation, each significant ingredient or component should be sourced from the country of origin represented and all or virtually all processes involved in the production or manufacture occur in that country.
To assist industry with the new legislation, the ACCC has issued publications setting out the new provisions, its view and approach to allegations of breaches and the application of the defences.
National Foods believed that the strawberries within the fruit preparation did not constitute a significant ingredient under the Act based on the technical composition of the products.
While the term a significant ingredient is not defined in the Act, the ACCC believes that the phrase should not be determined on a percentage basis, but rather whether the ingredient constitutes an essential defining element of the product.
The ACCC accepts that National Foods made a judgement in good faith as to the meaning of significant ingredient and did not intend to mislead consumers. However, the ACCC believes that a consumer buying strawberry Fruche® or strawberry yoghurt would be misled by the representation Product of Australia when the type of fruit used to describe the flavour of the product, is not produced in Australia.