On 3 December 2018 the Federal Court ruled that encapsulation in Australia of imported fish oil (from Chile) and Vitamin D (from China) did not qualify for the ‘Made in Australia’ logo.
The ACCC welcomed the Federal Court ruling that Nature’s Care Fish Oil 1000 + Vitamin D3 soft gel capsule (branded as Healthy care) will not be allowed to be labelled ‘Made in Australia’ under the Australian Consumer Law’s (ACL) Country of Origin labeling provisions. The ACCC said it provided evidence to support its view, consistent with its published guidance, that encapsulation and the addition of a vitamin should not be considered a ‘substantial transformation’ of imported ingredients.
Complementary Medicines Australia (CMA) CEO Carl Gibson said the government needed to act immediately to protect the billion dollar export market which was now under threat. The ‘Made in Australia’ logo is a key marketing element for many territories, particularly China, with some estimates that complementary medicines have an export value of $5 billion per year. “We are one of the few manufacturing sectors in the country actually growing – and yet Australia is about to shoot itself in the foot and give away our competitive export advantage,” he said, saying the case outcome underlined “how Australian companies are being negatively impacted by the new ACCC guidelines”.
My own view is that CMA are saying they will lose money if they stop misleading consumers about their labeling and obey Australian Consumer Law. Which would also happen if they stopped misleading consumers about the claims made for their products and obeyed the Therapeutic Goods Advertising Code!
On 5 December 2018 the Minister for Industry, Science and Technology, Karen Andrews, announced the Complementary Medicine Taskforce to review the impact of recent consumer law changes on the complementary healthcare sector. “The Morrison Government is committed to helping local industry tap into our export markets and ensuring our business community has opportunities to sell more products overseas,” Minister Andrews said.
The Taskforce will consider and assess reported impacts on the Sector of the changes to the substantial transformation test under the ACL. Both industry and consumer interests will be considered in this process. The Department of Industry will provide the Chair and Secretariat for the Taskforce. The Terms of Reference are available. The Taskforce will provide advice to Government by the end of February 2019.
- Justice Perram’s Judgment on substantial transformation of complementary medicines
- The Complementary Medicine Taskforce: A Homeopathic Consultation?
- ‘Burp-back’ highlighted in fish oil case
17/02/2019: I was asked to present a consumer perspective (on behalf of Choice) and other perspectives (PHAA, HAIAP & FSM) to the Taskforce in Canberra on 31 January 2019. My presentation is now available. Then they wanted a written submission!
The Consumers Health Forum also presented to the Taskforce and made a written submission. We both said that research showed that consumers wanted to know the origin of ingredients in products they were considering purchasing.
05/04/2019: Media Release by Minister for Industry, Science and Technology Karen Andrews: Backing the complementary healthcare industry. The Coalition Government has supported the complementary medicines industry and agreed to water down the ACCC’s “Made in Australia” criteria for country-of-origin labeling.
This was clearly not the position put by consumer organisations, nor was it in accord with research on consumer views commissioned by the Task Force and presented in their report. Consumers agreed that products that are ‘Made in Australia’, even with imported ingredients, should be able to use the AMAG logo, however it must be accompanied by the origin of ingredients and proportion as depicted below.
[From: Country of Origin Labelling Complementary Healthcare Taskforce Report; DIIS – Released under the FOI Act]
In an update sent to industry stakeholders but not consumer organisations the DIIS reaffirmed the Government’s 5 April 2019 commitment. The “update” noted that to meet this policy commitment, the department is progressing changes to the Australian Consumer Law (ACL), related regulations are being drafted and a Consultation Regulation Impact Statement (RIS) is being prepared.
3/10/2019: Department of Industry, Innovation and Science. Eligibility for Country of Origin claims in the Complementary Medicines Sector – Regulatory Impact Statement (RIS) Consultation
14/11/2019: The Office of Best Practice Regulation (OBPR) assessed the decision RIS as compliant with COAG Best Practice Regulation requirements. However, the OBPR notes the subsequent decision taken by the CAF is inconsistent with COAG Principles of Best Practice Regulation regarding establishing a case for action, and government action being effective and proportionate to the issue being addressed.
18/12/2019: From Trade Facilitation Section, Department of Industry, Innovation and Science. Government regulations to create greater access to an Australian origin claim for Australian manufactured complementary medicines passed the Federal Executive Council and were signed by the Governor-General.
These regulations have now been registered and can be viewed here: https://www.legislation.gov.au/Details/F2019L01627. Information on the operation of the regulations can be found in the Explanatory Statement which is available here: https://www.legislation.gov.au/Details/F2019L01627/Explanatory%20Statement/Text.
These regulations represent an interim step in restoring Australian origin claims for complementary medicines. They will be followed by an ongoing solution requiring a change in the Australian Consumer Law and the creation of rules to acknowledge the proportion of Australian ingredients on a label if a product is claimed to be Australian under those new laws. The ongoing changes are not expected to be implemented until the second half of 2020.
In short, well-argued consumer views have been ignored as has the OBPR!by