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Food Law Bulletin – October 2010

In this issue: In this edition, we look at the issue of the mandatory display of nutritional information on fast food; a new beef labelling system in NSW; misleading claims about extra virgin olive oil; colour as a trade mark on food labelling; and establishing a product's reputation for a successful trade mark opposition.

Food labelling developments

In brief: The Victorian and New South Wales governments have proposed new laws requiring fast-food outlets to display the nutritional information of their food products on menus and menu displays. Partner Richard Hamer and Law Graduate Georgina Dimopoulos outline these developments in the context of a review of food labelling law and policy and recent initiatives in the US and Europe.

How does it affect you?

  • Overseas developments, as well as recent proposals by the Victorian and NSW governments, suggest that Australia will follow the US in reforming nutritional content labelling laws to impose labelling requirements on fast-food chains.
  • Introduction of compulsory food labelling requirements for fast-food outlets may lead to greater incentives for, and competition among, fast-food companies to provide healthier options and to redesign food products.
  • The introduction of different requirements in two states, and these proposals outside the nationally consistent framework for food safety and labelling, is almost certain to result in increased costs of compliance for business and costs of enforcement for government authorities and undermine the longer-term attempts to bring consistency to this area.

The review of food labelling law and policy

The Australia and New Zealand Food Regulation Ministerial Council (the ministerial council) is presently undertaking a review of food labelling law and policy (the food labelling review). The matters for review include:

  • policy drivers affecting demands for food labelling;
  • the role of government in food labelling regulation and guiding principles for regulatory intervention; and
  • approaches for compliance with, and enforcement of, food labelling requirements.

According to the Issues Consultation Paper developed by the Review Panel, the focal point of the review is to address the tensions between 'fair and competitive trade' in the market, minimising the 'regulatory burden' for businesses, and ensuring that government food labelling objectives and consumer needs for informed decision-making are protected. The final report will be provided to the Ministerial Council in December 2010 and to the Council of Australian Governments (COAG) in early 2011.

Australian developments – introducing nutritional information for fast food
Victoria

The Victorian Government recently announced new food labelling requirements for businesses whose primary service is the provision of prepared food and drinks, and which have more than 50 outlets in Victoria or more than 200 outlets throughout Australia. These fast-food businesses must display the calorie content of their products on menus and menu displays at the point of sale. The first of its kind in Australia, the Victorian initiative is expected to commence in the second half of 2012, to provide businesses with sufficient time to implement the changes.

New South Wales

Similarly, the New South Wales Government has proposed the publication of kilojoule, saturated fat, trans-fats and salt content on menu boards at the point of sale of fast-food outlets. In its submission to the Food Labelling Review, prepared jointly by NSW Health and the NSW Food Authority, the NSW Government expressed support for food labelling initiatives in international jurisdictions, and recommended the expansion of nutritional labelling requirements to include fast-food chains with standard menu items. However, it acknowledged that this may not be practicable for individual restaurants with frequently changing menus.

The NSW Government has also proposed a colour-coded or 'traffic light' front-of-pack labelling system (red for unhealthy, green for healthy and orange for moderately healthy), as a simple means of signalling the nutritional value of food products. Despite their use in the UK, the European Parliament recently rejected the introduction of these compulsory 'traffic light' food labels, following intense opposition from the food and drink industry.

At the NSW Government's Fast Food Forum held on 18 August 2010, facilitated discussions were held between policy makers, health and consumer advocates and representatives of the fast food industry on food content and labelling and practical regulation of the disclosure of point-of-sale nutritional information. At the forum, a formal partnership between the Australian Food and Grocery Council and the Quick Service Restaurant industry was announced, to promote collaboration in addressing health, chronic disease, nutrition and consumer information issues in Australia.

Overseas developments – the way forward for Australia?
The United States and United Kingdom

As reported in the previous issue of the Food Law Bulletin, recent developments suggest that Australia will follow the US in reforming nutritional content labelling laws, which impose labelling requirements on chain stores and fast-food outlets. Following legislative reform under the Obama administration's new healthcare regime, fast-food chains in the US with 20 or more outlets must now prominently display the calorie content of foods beside each item on their menus and menu boards. This initiative was first introduced in New York in 2006 for fast-food chains with more than 15 outlets, and in California and Philadelphia in 2007. The UK introduced a similar requirement in 2009 on a pilot basis. More than 450 food outlets in the UK have agreed to display calorie information for most food and drink products served, and to print this information on menu boards and paper menus.

The European Union – front-of-package food labelling

On 16 June 2010, members of the European Parliament voted to adopt front-of-package food labelling, in the form of guideline daily amounts (GDA). This labelling system is similar to the daily intake guide labelling system in Australia, which lists the energy, fat, sugar and salt content in a recommended serve of a food product and its proportion of average daily intake. The European Parliament has agreed that when the GDA rules are finalised, businesses should be given at least three years to implement the labelling requirements.

Implications for food labelling regulation in Australia

These international developments are significant for Australia in light of the current Food Labelling Review and the measures already proposed by the Victorian and NSW governments. The formulation of an industry Code of Practice for food labelling and promotion, the challenges and opportunities involved in establishing an effective food regulatory framework, and interactions between regulators and industry in the review of the food regulatory system, were key discussion topics at the Australian Food Safety Conference held in Melbourne from 7-9 September 2010.

Most fast-food outlets in Australia currently publish their nutritional information online or in detailed leaflets. The food labelling reforms are intended to support the policy objectives of protecting public health, reducing the incidence of lifestyle diseases such as obesity and diabetes, and improving informed consumer choice. Details of the proposed requirements will be developed in consultation with the fast-food sector and government food and health authorities, consistent with best practice techniques and informed by the operation of the US and UK models.

The introduction of compulsory food labelling requirements for fast-food chains in Australia is no doubt aimed at encouraging fast-food companies to provide healthier options and to redesign their food products with reduced calorie contents. However, whether or not that happens, the introduction of those requirements is likely to mean heightened enforcement costs at federal, state/territory and local government levels. It is also likely to mean an increase in compliance costs for fast-food businesses, particularly if they are expected to comply with differing requirements at a state or territory level.

New beef labelling system in NSW

In brief: New legislation introduced by the New South Wales Government aims to provide consumers with greater clarity and quality assurance when purchasing beef. Partner Richard Hamer and Law Graduate Georgina Dimopoulos report on the new labelling requirements and the public debate surrounding the introduction of the new beef labelling system.

How does it affect you?

  • NSW has introduced enforceable 'truth in labelling' requirements for beef sold to consumers, which impact upon both the accuracy of beef labelling and its quality grading.
  • More consistent and reliable descriptions of beef quality will enable consumers to make more informed choices when buying beef.
  • This is again an example of state-based developments outside the nationally consistent framework for food safety and labeling that is almost certain to result in increased costs of compliance for business and costs of enforcement for government authorities and undermine the longer-term attempts to bring consistency to this area.

A new scheme for beef labelling

NSW has become the first Australian jurisdiction to introduce enforceable 'truth in labelling' requirements for beef sold to consumers. The Food Amendment (Beef Labelling) Act 2009 (NSW) (the Act), which commenced operation on 31 August 2010, amends the Food Act 2003 (NSW) (the Food Act) to introduce beef labelling schemes, which regulate words and expressions used in labelling beef intended for sale or on sale, to indicate the type, quality or any other characteristic of the beef.

The changes require retailers who describe beef according to age to use the labels 'Yearling' (less than 18 months), 'Young' (18 months to 2.5 years), 'Intermediate' (2.5 years to 3 years), 'Mature' (3 to 3.5 years) or 'Economy' (more than 3.5 years of age). Claims regarding production or processing systems on beef labels must be accurate and able to be substantiated. Terms used under the old system, such as 'Prime', 'A Grade' and 'Grain Assisted', can no longer be used when describing beef.

The Act also prohibits misleading and deceptive conduct in relation to the advertising, packaging and labelling of beef. To avoid engaging in such conduct, a person conducting a food business must use AUS-MEAT language1 consistently, or comply with a voluntarily adopted beef labelling scheme. If beef is marketed as 'budget', it must also include the words 'low grade' or 'low quality'; and if marketed as 'manufacturing', it must be accompanied by the words 'suitable for mince only'. Similarly, a person is prohibited from promoting the sale of beef in a way that falsely describes the beef. Restaurants, take-away stores and similar food outlets, which sell beef that has been cooked and is intended for immediate consumption, are exempt from the Act's provisions regulating misleading and deceptive conduct and false descriptions of beef. 

These new labelling requirements impact upon both the accuracy of beef labelling and the quality grading of beef. They will operate in conjunction with Meat Standards Australia (MSA), the existing beef quality grading system that labels meat products with a grade and recommended cooking method. A Domestic Retail Beef Register for the retail sector has also been established to describe all permissible beef labels. A consumer education campaign will be launched in January 2011 to assist consumers to understand the new beef labelling terms.

More informed consumer choice or higher costs for the beef industry?

More consistent and reliable descriptions of beef categories and quality will enable consumers to determine the most appropriate kind of beef for their requirements. In developing the beef labelling requirements, the NSW Government, through the NSW Food Authority, consulted with the beef industry and the retail sector. Consumer groups have queried the adequacy of the consultation process with consumers in formulating the beef labelling laws, and have expressed concern over the potential for compliance costs associated with the labelling requirements to increase the cost of beef for consumers. Multiple systems for beef labelling – the new labelling system and the MSA – may also generate confusion among consumers. Beef industry bodies such as the NSW Farmers' Association Cattle Committee and the Red Meat Advisory Council have largely welcomed the new requirements. However, some maintain that quality grading of beef should be the responsibility of industry, not government.

At the federal level, a 2009 Senate committee inquiry into beef marketing and labelling revealed concerns over consumer access to, and the adequacy and accuracy of information on, beef product labelling. Evidence to the committee on the issue of beef marketing focused particularly upon grading for beef quality. The committee recommended that the AUS-MEAT system that applies to exported meat be extended to all domestic processors in Australia. It expressed the view that government's role in regulating the labelling of beef products is to ensure that consumers are not misled; and that it should be left to industry to grade beef products for quality, and to label products in such a way as to provide best practice 'consumer-friendly' marketing information.

Extra virgin olive oil – or not?

In brief: Standards Australia is currently developing Australian quality and labelling standards for olive oil. This development may not only offer guidance to the ACCC and Australian courts when determining whether a particular olive oil classification claim is misleading, but may also see such claims come under increased scrutiny, as has been seen in the United States, where a class action lawsuit is underway against the manufacturers, distributors and retailers of well-known olive oil brands for allegedly misleading extra virgin classifications. Senior Associate Ric Morgan and Lawyer Jacqueline Goodall report.

How does it affect you?

  • There are no mandatory standards for olive oil in Australia. However, false or misleading statements that olive oil is 'extra virgin' still run the risk of prompting legal action.
  • Importers, distributors and retailers should obtain verification or independently verify that the oil they supply complies with recognised standards to ensure that the oil is extra virgin as claimed.
  • New Australian standards for olive oil being developed by Standards Australia, although voluntary, are expected to set guidelines for what the industry and consumers expect of oil labelled 'extra virgin'. The courts are likely to take the guidelines into account in determining whether statements that olive oil is 'extra virgin' are misleading and deceptive in contravention of the Trade Practices Act 1974 (Cth) (the TPA).

Background

The Australian Competition and Consumer Commission (ACCC) has previously taken action against distributors that have misled consumers with assertions that their product was extra virgin olive oil. In October 2009, after receiving information that a number of products sold in Australia as extra virgin olive oil may have been refined, adulterated with other oils (such as canola or rapeseed oil) or of poor quality, the ACCC commissioned testing of a selection of imported and locally produced oils against the International Olive Council's trade standard for olive oil (the IOC standard). Three samples were found not to be extra virgin olive oil as defined by the IOC standard. In a statement released at the time, the ACCC said it believed that by representing these products as extra virgin olive oil, each of the distributors were likely to have engaged in false and misleading conduct in contravention of the TPA. As part of the court-enforceable undertakings accepted by the ACCC, the distributors undertook to obtain from their supplier's a certificate of analysis or annual test reports demonstrating compliance with the IOC standards and/or independently verify the products' compliance.

A recent survey by the Australia consumer group CHOICE (released on 22 June 2010) found that half of the 28 brands of extra virgin olive oil sold in Australian supermarkets did not meet the IOC standard.

False or misleading statements that olive oil is 'extra virgin' run the risk of legal action by ACCC, as was seen in 2009.

New Australian standards

There are no quality and labelling standards in place in Australia for olive oil. However, new Australian standards are currently being developed by Standards Australia, in collaboration with the Australian Olive Oil Association. The standards are expected to:

  • cover extra virgin oils imported or produced in Australia;
  • set guidelines to provide for simpler and clearer labelling so as to avoid misleading and confusing terms; and
  • set benchmarks for the quality of olive oils purchased for health reasons.

The new standards will provide guidance for industry on these issues but compliance, at least initially, will only be voluntary.

US class action

On 2 August 2010, a class action lawsuit was filed in the Orange County Superior Court by Callahan & Blaine against the manufacturers, distributors and retailers of well-known olive oils sold in California, such as Bertoli, Filippo Berio, Newmans Own Organics, Pompeian and Safeway Select. The claim also names, as defendants, 10 major supermarket chains and retailers, including Target, Wal-Mart and Kmart. The plaintiffs claim that the defendants have been knowingly misleading and defrauding California consumers by claiming that their olive oil product met the standard of 'extra virgin' classification, thus entitling the defendants to charge a premium for their products, when in fact the products are of inferior quality, often blended with cheaper refined oils, such as hazelnut, or lower-quality olive oils.

The plaintiffs are basing their misrepresentation claims on the July 2010 report by the US David Olive Center at the University of California that found that 69 per cent of the imported oils and 10 per cent of California-produced olive oils included in the study failed to meet internationally accepted standards for extra virgin olive oil.

The United States Department of Agriculture has recently adopted the Standards for Grades of Olive Oil and Olive-Pomace Oil (effective on 25 October 2010) (the USDA standards). These grade standards, though issued under the authority of the Agricultural Marketing Act 1946 (US), are voluntary.

Under the USDA standards, the highest grade is 'U.S. Extra Virgin Olive Oil', which is oil obtained from the fruit of the olive tree (Olea europaea L.) solely by mechanical or other physical means under conditions, including thermal conditions, that do not lead to alterations in the oil, and that have not undergone any treatment other than washing, decantation, centrifugation, and filtration. No additives of any kind are permitted. The oil must also have among other things, excellent flavour and odour (median of defects equal to zero and median of fruitiness greater than zero) and a free fatty acid content, expressed as oleic acid, of not more than 0.8 grams per 100 grams.

Conclusion

Although voluntary, the new standards will provide the ACCC and Australian courts with clearer guidance as to what consumers would understand by the term 'extra virgin' and other common olive oil classifications when used to describe an olive oil.

The new standards may also see olive oil classifications, even if not mandatory, come under increased scrutiny not only by the ACCC, but by other businesses and consumers, as has been seen in the United States.

Mars claws back ownership of the colour 'Whiskas Purple'

In brief: The Federal Court has recently allowed Mars Australia Pty Ltd to register a particular shade of purple referred to as 'Whiskas Purple' as a trade mark for cat food and additives for cat food. The decision reflects the increasing trend of companies' use of colours as part of their brand identity being protected by trade mark registration. Partner Tim Golder and Lawyer Nadia Guadagno report.

How does it affect you?

  • Colours may be registered as a trade mark, but only where that colour has been used as a trade mark, ie to distinguish your goods from those of competitors.
  • While Mars is entitled to exclusive use of the colour 'Whiskas Purple' for cat food and additives for cat food as a trade mark, it does not prevent other cat food manufacturers using the colour in a non-trade mark sense, such as to indicate a particular variety of product. It also does not prevent use of the colour in any sense on products that are not related to cat food or cat food additives. 

Background

Mars Australia Pty Ltd applied to register the colour 'Whiskas Purple' as a trade mark for 'Foodstuffs for domestic pets and additives for such foodstuffs'. Mars commenced using the colour 'Whiskas Purple' as the predominant colour on the packaging of its Whiskas cat food products in Australia in April 2000 and the colour, according to the evidence, was created for Mars in Europe 'from scratch'.2

Mars' application was accepted for registration by the Trade Marks Office. The representation of the trade mark is depicted in Figure 1 below.

Figure 1: The representation of the 'Whiskas Purple' trade mark in Mars' application. Image reproduced from judgment of Federal Court in Mars Australia Pty Ltd (formerly Effem Foods Pty Ltd) v Société des Produits Nestlé SA [2010] FCA 639.

Nestlé opposed the registration, which was upheld by a delegate of the Registrar of Trade Marks (the delegate) on the basis that 'Whiskas Purple' was not at all inherently adapted to distinguish Mars' products and the application was accepted by the Hearing Officer on the basis of evidence or representations that were false in material particulars. Mars appealed to the Federal Court. The principal issues on appeal were:

  • whether the mark was capable of distinguishing Mars' pet food products from the goods of other persons (under s41 of the Trade Marks Act 1995 (Cth)); and
  • whether the application was accepted by the Hearing Officer on the basis of evidence or representations that were false in material particulars (under s62(b) of the Trade Marks Act).
Decision

Before the Federal Court hearing, the parties settled and proposed agreed orders that the appeal be allowed, the decision of the delegate be set aside and the trade mark proceed to registration with the amended specification 'cat food and additives for cat food'.

Given that there was no opposition to the registration by Nestlé or the Registrar of Trade Marks, Justice Bennett held that the decision of the delegate should be set aside and the application with the amended specification should proceed to registration; however, her Honour still considered both issues because both parties had called substantial evidence and the delegate had concluded that the registration had been accepted on the basis of representations that were false in material particulars.

Capacity to distinguish

Justice Bennett explained that the Trade Marks Act accepts, and the evidence established, that a colour can function as a trade mark. Mars had provided substantial evidence of its use and promotion of 'Whiskas Purple' in Australia, including its association with Whiskas, from about April 2000.3 The colour was carefully chosen to create a stronger brand identity for Whiskas and to create a shelf-blocking effect when displayed in supermarkets.4 Her Honour held that the evidence demonstrated that 'Whiskas Purple' did function as a trade mark by acting as a 'badge of origin by which consumers identified Mars' goods in contrast to the goods of other traders' for cat food and additives to cat food.5

While it was accepted that other traders had used a similar shade of purple to 'Whiskas Purple' on pet food packaging, such use has not been as a trade mark, but was mainly to distinguish a particular variety of product.6 Her Honour held that registration of 'Whiskas Purple' by Mars would not prevent such non-trade mark use of the colour.7

Acceptance on basis of false evidence or representations

Justice Bennett held that the ground of opposition under s62(b) of the Trade Marks Act 'requires a causal connection between the suggested false statement and the acceptance of the application.' 8 The delegate had concluded that a Mars officer had inadvertently declared untrue facts before the Hearing Officer (which were that, at the time Mars adopted 'Whiskas Purple', neither 'Whiskas Purple' nor any other shade of purple were used by any other cat food manufacturer in Australia) and these were in all probability material to the decision to accept the application; thus the delegate held the ground of opposition under s62(b) of the Trade Marks Act was made out. There was, however, other evidence before the Hearing Officer that purple was used on many petcare products, including cat food, for example as an indication of a variety, but not as the dominant colour. Given this, Justice Bennett held that it cannot be concluded that the Hearing Officer accepted the application on the basis of the representations in the Mars officer's declaration, even if they were false in a material particular.9 Thus the appeal in relation to this ground of opposition was allowed.

Trade mark opposition a fizzer

In brief: A recent decision by the Australian Trade Marks Office makes clear that trade mark owners cannot rely on the existence of a 'healthy business' to establish the reputation necessary for a successful opposition. Partner Tim Golder and Lawyer Michelle Freeman report.

How does it affect you?

  • It is essential for an opponent to trade mark registration under section 60 of the Trade Marks Act 1995 (Cth.) (the Act) to demonstrate that it has established a reputation in the trade sufficient that the second mark will deceive or mislead the market. It will not be enough that the marks in question are deceptively similar.
  • Early action to prevent the use of similar trade marks before they become established is likely to be essential in protecting established trade marks.

Background

In a recent opposition by Swizzels Matlow against a proposed trade mark registration by Tiger Food Brands in Class 30 (confectionary products), Swizzels Matlow raised objections under several sections of the Act. The marks in question are depicted at figures 1 and 2 below.

Figure 1: Disputed mark. Image reproduced from judgment in Swizzels Matlow Ltd v Tiger Food Brands Intellectual Property Holding Company (Pty) Ltd [2010] ATMO 29.

   

Figure 2: Previously registered mark. Image reproduced from judgment in Swizzels Matlow Ltd v Tiger Food Brands Intellectual Property Holding Company (Pty) Ltd [2010] ATMO 29.

Requirements of section 60

The Commonwealth Registrar of Trade Mark's delegate considered that on the facts and evidence presented, the only ground applicable was under s60 of the Act. Section 60 has two limbs that must be satisfied by an opponent to a trade mark registration. The mark in question must be substantially identical with, or deceptively similar to, a previously registered mark that has acquired a reputation in Australia, and must also be likely to deceive or cause confusion because of the reputation of the first mark. With respect to the first limb, the delegate in this case applied the 'standard tests' to a consideration of the marks. She determined that a side-by-side examination revealed 'as many differences as similarities', and considered that as 'no impression of similarity [arose] between the trade marks, they are not substantially identical.'10 However, when the delegate applied the 'imperfect recollection' test,11 she was satisfied that deceptive similarity applied as the 'descriptive word' FIZZER(S) 'is likely to be the part of the trade mark which is retained in the memory of the confectionary buyer who is looking for an effervescent sweet'.12

However, although the delegate was convinced that the first limb was satisfied, the opponent's evidence with respect to reputation failed to persuade the delegate that the threshold of the second had been met. Declarations were submitted for Swizzels Matlow attesting to the longevity of Fizzers sales in Australia (since 1966), the product's market penetration in Australia (it is sold through large supermarket chains and various types of convenience stores), three years' sales figures and evidence as to advertising in a trade journal and the presence of branded packaging on store shelves for a period of many years.13 However, trade mark applicant Tiger Food Brands also led evidence that it had been using the disputed mark in Australia for a considerable period (since 1994), generating sales greater than those claimed by the opponent.14 The delegate stated that, as the parties had been trading concurrently in the same market since 1994, and as no evidence had been led by the opponent to show 'confusion to date', she was not satisfied that the s60 ground for opposition was established and ordered that the Tiger Food Brands mark should proceed to registration.

Lessons

Had Swizzels Matlow led evidence to persuade the delegate that consumer confusion had arisen between confectionary products Swizzels Fizzers and Beacon Fizzer, it would have likely been successful in this opposition. However, a failure to do so prevented such a finding, as the two products had been retailed through similar trade channels for a considerable period of time without apparent confusion. Owners of valued trade marks should if possible lead evidence of confusion where competitors are already using similar marks in the marketplace when seeking to protect their marks under s60.

The case also highlights the importance of taking prompt action to prevent the use of new and deceptively similar rival branding. By the time Swizzlers Matlow commenced its opposition, Tiger Foods Brands had already been trading under its Fizzer mark for a considerable period of time and Swizzlers Matlow's evidence even included a photograph depicting the two companies' products being sold side-by-side on a supermarket shelf. The fact that Swizzlers Matlow was unable to produce evidence of consumer confusion therefore carried considerable weight, as it could reasonably be expected that if no such confusion had occurred by that point, it was unlikely that it would in the future. Had Swizzlers Matlow taken action to prevent Tiger Food Brands from using its conflicting mark, when such use commenced, it may have had more chance of success.

Developments to watch

Draft production and processing standard for seed sprouts

The Australian New Zealand Sprouters' Association has approached FSANZ, seeking government intervention to ensure high levels of food safety in the seed sprouts industry and reduce the risk of food-borne illnesses associated with the consumption of seed sprouts. The Association has called for the development of regulatory measures for the sprout production industry.

FSANZ has estimated that a series of outbreaks of food-borne illnesses associated with seed sprout consumption cost the Australian community around $1.9 million in 2005 and 2006.

FSANZ has proposed a draft Production and Processing Standard for Seed Sprouts, which it predicts will see a 23-65 per cent reduction in the financial burden of illnesses associated with the consumption of seed sprouts, amounting to a saving of between $55,000 to $390,000 per year.

The draft standard only applies to sprout producers, as opposed to the entire seed sprout production chain.

Amending FSANZ Code to permit the use of Avantame

Ajinomoto Company Inc. has applied to FSANZ for approval to use a new intense sweetener, Avantame, in powdered table top sugar substitutes and a range of powdered beverages, including fruit drinks, milks and milk flavoured drinks, instant tea and coffee, and protein drinks.

Before any new food additives can be used in products sold in Australia they must be approved by FSANZ.

FSANZ has proposed an amendment to the FSANZ Code to permit the use of Advantame in specified foods at specified levels, and is seeking public submissions.

ACCC commences proceedings on 'free range' claims

On 23 September 2010, the ACCC commenced proceedings in the Federal Court of Australia in Perth against three Western Australian egg wholesalers, for alleged contraventions of sections 52, 53(a) and 55 of the Trade Practices Act 1974 (Cth). The ACCC alleges that the wholesalers prominently labelled and marked cartons of eggs with the words 'free range eggs' when in fact the eggs were not free range. A directions hearing has been listed for 25 October 2010. The ACCC is seeking declarations that the conduct contravened the relevant sections of the TPA, as well as injunctions, orders for costs against all parties, corrective notices and an order imposing a civil pecuniary penalty on one of the wholesalers.

Food Safety (Trans Fats) Bill 2010

A private Senators' Bill introduced into the Senate on 30 September 2010 by Greens Senator Rachel Siewert aims to reduce Australian consumers' exposure to synthetic trans fatty acids, which are used to increase the shelf life and texture of certain foods, including fast foods.

A number of other countries already regulate the use of trans fats, including Denmark and Switzerland, which have banned the use of trans fats in most of their foods. The United States requires manufactures to list trans fats on the 'nutritional facts' panel on foods and some dietary supplements.

In Australia, manufacturers are currently only required to declare the amount of trans fats in foods if a nutrition claim is made about cholesterol, polyunsaturated, monounsaturated fats; omega-3, omega-6 or omega-9 fatty acids.

The Food Safety (Trans Fats) Bill 2010 prohibits constitutional corporations and, in particular circumstances, individuals from manufacturing, distributing, offering for sale, selling or otherwise trading in food containing synthetic trans fatty acids. Debate on the Bill has been adjourned.

In light of the recent changes to the rules of Parliament, agreed as part of the negotiations with the independents, private members Bills are now given greater prominence and are guaranteed prompt debate. In addition, the tight numbers in Parliament mean that the Bills now also have a greater chance of being passed. The food industry will therefore be watching with interest to see how Senator Siewert's Bill is received.

The AUS-MEAT language is a national uniform description system based on objective carcass specifications developed by AUS-MEAT Limited, the industry body responsible for establishing and maintaining national industry standards for meat processing and production. It refers to 'any words, letters or symbols (other than the words beef, steak or veal or any words indicating a cooking method) that (whether alone, in combination or together with other words, letters or symbols) are used by the AUS-MEAT manual to designate or indicate beef as belonging to a particular type, quality, classification, category, cut or grade': Food Amendment (Beef Labelling) Act 2009, Schedule 1 section 23B(5).

Footnotes
  1. Mars Australia Pty Ltd (formerly Effem Foods Pty Ltd) v Société des Produits Nestlé SA [2010] FCA 639, [2] and [5].
  2. Ibid [25].
  3. Ibid [25].
  4. Ibid [27]-[28].
  5. Ibid [26].
  6. Ibid [26].
  7. Ibid [20].
  8. Ibid [20].
  9. Swizzels Matlow Ltd v Tiger Food Brands Intellectual Property Holding Company (Pty) Ltd [2010] ATMO 29 [22]. 
  10. Ibid [23].
  11. Ibid. [24].
  12. Ibid. [7]-[10].
  13. Ibid. [12].

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