INSIGHT

The rise of plant-based 'meats' and emerging legal issues

By Lauren John, Tess Kirkinis
Competition law Consumer law Food & Beverage Technology

In brief 9 min read

The demand for plant-based 'meat' alternatives is predicted to grow. As with any new industry, there is a series of regulatory issues that businesses should carefully navigate at the early planning phase. This is to avoid encountering issues down the track that may affect the marketing and supply of such products in Australia.

Key takeaways

  • Companies and investors are seeking opportunities in the plant-based 'meat' alternatives industry, as demand for these products grows.
  • Businesses should consider product design and branding at an early stage, to avoid encountering gene technology regulations and other issues that may affect the future supply of plant-based 'meat' products in Australia.
  • Care should be taken when making comparative claims, including from a health, nutrition and climate change perspective, to avoid the material risk of contravening the Food Standards Code (the Code) and the Competition and Consumer Act 2010 (Cth).

Introduction

With well-being and climate change on millennials' radars, the demand for plant-based 'meat' alternatives is predicted to rise; and it is also predicted they will compete with animal-based foods, including meat products. Companies and investors that are positioned, or otherwise seeking opportunities, in the growing alternative meat industry will be required to navigate emerging legal and regulatory challenges both in Australia and abroad.

We canvass some of the Australian legal hurdles facing producers of plant-based 'meat' alternatives, including the impact of gene technology regulations on the supply of such products to consumers. In addition, we discuss some of the consumer law issues that should be considered when plant-based food businesses plan and develop their branding and advertising strategies.

The plant-based 'meat' market is 'beefing up'

The demand for, and popularity of, alternatives to animal-based products continues to grow. Plant-based foods are said to present an opportunity to reduce greenhouse gas emissions and improve human health outcomes. Eg Impossible Foods claims that its 'Impossible Burgers' generate '87% less greenhouse gases' compared with burgers made from beef.

Winning the race to be leaders in the market for 'meat' alternatives, so far, are businesses producing plant-based 'meat' products, including Impossible Foods and its competitor, Beyond Meat, both headquartered in the United States. However, Australian-based companies are starting to catch up. Just recently, V2food, a plant-based meat start up, launched in Australia with the support of the CSIRO and other investors, including Jack Cowin's Competitive Foods Australia. The company is working with the CSIRO to develop capability to process legumes for plant-based meat alternatives.

Businesses producing plant-based 'meat' alternatives are not only marketing their products to vegans and vegetarians. Rather, it is intended that these products will compete with, and even replace, meat products. With the global population expected to rise to 9.7 billion by 2050, there is said to be enormous potential in plant-based 'meat' alternatives. Some stakeholders have said that it will be a $3 trillion industry. The CSIRO anticipates that the plant-based meat industry in Australia will be worth more than A$6 billion by 2030.

However, as with any new industry, there is a series of regulatory issues that businesses producing plant-based 'meat' products should carefully navigate when manufacturing, supplying and marketing their products in Australia.

Gene technology regulation 'meats' plant-based meats

Products and technology differ just as culinary tastes do

Previously, processed plant-based foods were marketed as alternatives to, but were not designed to precisely mimic, meat products. Tofu is one example. Another is processed mixtures of soy, legumes grains and other plants that form burgers, nuggets and other meat-shaped products. Fast-forward to today: the new wave of plant-based meat products are processed, with the aim being to recreate the texture, appearance and, most importantly, the taste of meat, typically using purified plant proteins.

However, each type of product, and the processes and technology that underpin them, differs from company to company.

Eg, according to its website, Impossible Foods makes plant-based meat products using protein, flavour, fat and binders. The flavour of meat is recreated by sourcing heme, in the form of a molecule called leghemoglobin, from the roots of soy plants. Yeast, which has been genetically engineered by inserting the DNA of soy roots, expresses the soy heme protein in large quantities. In addition, soy and potato are used to make the burger protein; coconut and sunflower oils are used as fat; and methylcellulose is used as a binder.

On the other hand, Beyond Meat uses 'a system that applies heating, cooling, and pressure to align plant-proteins in the same fibrous structures that you'd find in animal proteins'. These processes are combined with 'ingredients that mimic the composition of animal-based meat, like plant-based proteins, fats and minerals' (as quoted by Beyond Meat's CEO). However, according to its website, Beyond Meat does not use genetically modified organisms to produce its products.

Supplying plant-based meats

The Code, which is enforced by Food Standards Australia New Zealand (FSANZ), regulates the supply and labelling of foods in Australia. The composition of plant-based 'meat' products, and the underlying processes and technology used to manufacture them, will determine which regulations apply. Eg the Code prohibits the supply of a food (including imported food) that is 'produced using gene technology'.1 This is the case unless:2

  • the food has undergone a safety assessment by FSANZ, is listed in Schedule 26 and complies with any condition listed in that schedule; or
  • the substance is permitted for use as a food additive by Standard 1.3.1 or as a processing aid by Standard 1.3.3.

Relevantly, the current definition of 'food produced using gene technology' captures 'food which has been derived or developed from an organism that has been modified using gene technology', where 'gene technology' is defined to mean 'recombinant DNA techniques that alter the heritable genetic material of living cells or organisms'.3 Although the term 'recombinant DNA techniques' is undefined, FSANZ says the practical effect of the definition has been to capture foods derived from organisms that contain new pieces in their genome derived from any source, including the same species.

FSANZ is intending to release its recommendations on whether to prepare a proposal to amend the Code, particularly in light of the recent changes to the Gene Technology Act 2000 (Cth), which we discussed in From lab to pasture to plate – amendments to the National Gene Technology Scheme.

Until then, the current regulations provide a real question as to the scope of the definition 'food produced using gene technology' and the meaning of the phrase 'derived … from an organism … modified using gene technology'. Eg it would seem to be contentious whether this definition:

  • captures foods that contain genetically modified organisms or parts of genetically modified organisms; or
  • captures foods that merely consist of ingredients or components that are produced by genetically modified organisms, but not the genetically modified organism itself.

These are just some of the vexed issues that businesses producing plant-based 'meat' alternatives will need to consider before supplying their products in Australia.

Labelling of plant-based 'meats'

The Code also prescribes certain requirements as to the labelling of food. Once a food is approved for sale that consists of, or has, an ingredient or food that is genetically modified, it will need to be labelled accordingly.4 However, there are a number of exceptions to this rule, including where the food is prepared and sold from food premises or vending vehicles, such as restaurants, takeaway outlets and caterers.

Given the marketing appeal of plant-based 'meat' products from a health perspective, the labelling requirements in relation to nutrition content, health and related comparative claims are likely to be of particular relevance.5 In addition, if these products, or the protein from which they are derived, contains allergens (such as lupins), this will need to be declared on the label.6

Some consumers not amused by plant-based 'meats'

As the demand for plant-based 'meat' alternatives grows, there are consumer law issues that need to be considered as part of developing branding strategies.

Meat-related descriptors

In the previous edition of the Food Law Bulletin, we wrote about the possibility of a prohibition of meat-related descriptors in the promotion of plant-based alternatives (see Will the Australian food regulator change its tuna?). Any such prohibition would require regulatory change (including amendment of the Code). While there have been moves in other jurisdictions, and recent lobbying, it is predicted that the prospects of such developments in the near future in Australia are limited.

Notwithstanding this, businesses producing plant-based 'meat' alternatives should be aware of, and monitor, any developments, as this prohibition could significantly impact their advertising, branding and marketing strategy in the long term.

Comparative advertising

Given their intended use as 'meat' alternatives, it is not uncommon for marketing materials for plant-based 'meat' products to include comparative claims emphasising the environmental and health benefits of such products compared with meat products. The ACCC has provided guidance in relation to comparative advertising. Although it is permissible to make comparative advertising claims, such comparisons cannot be misleading or deceptive. To reduce the risk of contravening the Competition and Consumer Act:

  • any comparison must be accurate;
  • the products being compared should be reasonably similar; and
  • the comparison must be valid for the life of the promotion.

Businesses promoting plant-based 'meat' products in Australia should ensure that the claims made about their products are backed by sound and robust evidence.

Vegan law suits and class actions

The rise of plant-based 'meat' burgers has seen some US fast-food chains facing lawsuits and class actions by vegans, with accusations levelled at these chains that their plant-based burgers are contaminated with meat products, by reason of having been cooked on the same grill and with the same equipment used to cook burgers made from meat. A recent example is a proceeding commenced against Burger King in Florida. While some may see this action as frivolous, it serves as a reminder to businesses producing plant-based 'meat' products to include quality standards in their supply agreements, so as to mitigate any reputational damage that may be caused by the actions of third parties.

Actions you can take now

There are a number of actions those producing plant-based 'meat' products can take. These include:

  • considering product design and branding strategy at an early stage, to avoid spending resources in circumstances where road blocks down the track will affect the supply and advertising of such products in Australia;
  • mitigating the risk of contravening the Code or the Competition and Consumer Act by:
    • obtaining all necessary approvals to sell food produced using gene technology; and
    • reviewing advertising materials and labelling, particularly those involving comparative claims; and
  • inserting quality control measures in supply agreements, to mitigate the risk of reputational damage that the actions of these third parties can cause.

Footnotes

  1. Standard 1.1.1–10(5) of the Code.

  2. Standard 1.5.2 –3 of the Code.

  3. Standard 1.5.2—2 of the Code.

  4. Standard 1.5.2—4 of the Code.

  5. Standard 1.2.7 and Schedule 4 of the Code.

  6. Standard 1.2.3 – 4 of the Code.