Q. When can a ‘made in' label be used on a product?
A. Under the Trade Practices Act 1974 (TPA) compliance regime, a business can safely use an unqualified ‘made in' claim, such as ‘Made in Australia', where the product under question meets both of the following criteria:
- substantial transformation in the country represented; and
- 50 per cent or more of production costs are incurred in the country represented.
If a product passes both of these tests, the manufacturer (or distributor or retailer) may make a claim that the product has been ‘made in' the country of representation, safe in the knowledge that this claim cannot attract liability under the provisions of the Trade Practices Act 1974 that prohibit false, misleading or deceptive origin representations.
Q. What is ‘substantial transformation'?
A. Substantial transformation in a country is defined as "goods undergoing a fundamental change in that country in form, appearance or nature such that the goods existing after the change are new and different goods from those existing before the change".
While processes that may amount to substantial transformation are numerous, they might include:
- the processing of imported and Australian ingredients into a finished food product, for example the production of a cake from imported spices, fruit and flour and Australian sugar;
- the cutting and sewing of cloth to make a shirt; or
- the production of plastic or foam forms from imported polymer stock, such as powder or beads.
The process of substantial transformation does not, of itself, enable goods to meet the ‘made in' defence. The requirement for 50 per cent or more of the costs of production to be incurred in the claimed country of origin must also be met.
Q. What can be included as a cost of production?
A. Costs that are eligible to be included in the cost of production are prescribed by the Trade Practices Act 1974 and include:
- expenditure on materials incurred by the producer/manufacturer in the production or manufacture of the good;
- expenditure on labour incurred by the producer/manufacturer, that relates to the production or manufacture of the good and can reasonably be allocated to the production or manufacture of the good; and
- expenditure on overheads incurred by the producer/manufacturer, that relates to the production or manufacture of the good and can reasonably be allocated to the production or manufacture of the good.
Q. Can a product that has been packaged in Australia from imported ingredients qualify for the ‘Made in Australia' defence?
A. No. A product that is simply packaged in Australia from imported ingredients would not meet the substantial transformation and probably the 50 per cent local production cost requirements that underpin the ‘Made in Australia' defence.
Q. What if my product doesn't meet the criteria for unqualified ‘made in' claims?
A. Failing to meet the criteria for unqualified ‘made in' claims does not prevent you from including country of origin information on your product. What it does mean, however, is that extra care should be taken to ensure that any origin information included on the product is not misleading or deceptive.
If you are unable to make an unequivocal claim (e.g. ‘Made in Australia' or 'Made in Italy'), you may wish to consider using alternative terminology, such as ‘Assembled in Australia', or making a qualified claim. Qualified claims provide more information than unqualified ‘made in' claims and represent one way of ensuring that consumers are not misled or deceived by the origin information included on your product. Qualified claims for country of origin could include ‘Made in Australia from Australian and imported components' or ‘Made in Italy from Australian wool'.
Q.When can the ‘product/produce of' claim be used?
A. The TPA labelling requirements reinforce the premium nature of ‘product/produce of' claims over ‘made in' claims, with the ‘product/produce of' descriptor being reserved for goods with essentially 100 percent local content.
A business can safely use an unqualified ‘product/produce of' claim on a good where:
- all of the significant ingredients or components of the good come from the country represented; and
- virtually all of the production/manufacturing processes associated with the good occur within the country represented.
Q. Is it compulsory to include country of origin information on all products?
A. No. The Trade Practices Act 1974 does not include any mandatory requirement that products offered for sale carry a country of origin label. Origin labelling is, therefore, voluntary in many instances and businesses can choose whether to include information about the product's origin.
However, any origin claim, representation, implication or impression that is made by any labelling or promotional material must be accurate and not misleading or deceptive or likely to mislead or deceive.
It should also be noted that mandatory origin labelling requirements do exist for some products. For example certain classes of imported goods, including all imported products already packaged for retail sale, are required by legislation to carry country of origin labels. Mandatory origin labelling requirements apply to a wide variety of other products including food, whether imported or of Australian origin.
Q. Whilst I usually source my raw materials from local suppliers, occasionally this is not possible and I am forced to import components/ingredients. What effect will this have on my origin claims?
A. If you know, or should reasonably have known, ahead of time that a significant component or ingredient will be imported, you should consider this when making an origin claim. The importation of a significant component or ingredient may prevent a previously eligible product from satisfying the defence for an unqualified ‘Made in Australia' claim, and will certainly preclude the use of a ‘Product of Australia' label.
If the local shortage is related to seasonal availability, you may wish to convey this in your labelling. Clarify whether the fall in local availability is due to an irregular crop shortage or a regular replacement by imports in the local off-season.
Q. Can I use a logo or other graphic representations to depict country of origin information?
A. Yes. Graphic representations, such as logos, symbols and pictures can be used to represent country of origin information. The legislation covers any representation, whether it be on a product, packaging or related advertising material, that implies that a good has some association with a particular country. Examples of pictorial representations include the use of national flags, the Eiffel tower on French goods, symbols such as kangaroos, koalas and boomerangs on Australian goods, or the use of a maple leaf on Canadian products.
If you choose to use a graphic representation of origin, you must ensure that the flag or symbol used does not mislead or deceive consumers into thinking that a product has originated in a particular country when this is not the case. Any text or symbols that attempt to qualify pictorial representations should be sufficiently prominent to ensure that consumers are aware of them and understand their significance.
Q. Am I Permitted to claim that my product is "Grown in Australia" or "Harvested in Australia"?
A. Yes, you may make other kinds of country of origin claims not specifically protected by provisions of the Trade Practices Act 1974 provided they are not misleading or deceptive. For example, food grown in Australia could be labelled "Grown in Australia" or "Australian Grown".
Q.Can I use the green and gold ‘Australian Made' logo on my products?
A. Yes, provided you have a licence from the Australia Made Campaign Ltd to use the logo and your products comply with the requirements specified in the Code of Practice for use of the logo.
Further information about the use of the ‘Australian Made' logo may be obtained by contacting:
Q. Am I permitted to use ‘Australian owned' claims on my products?
A. Yes, provided such claims are not false or misleading. There are no legislative restrictions on Australian owned businesses in terms of promoting their local ownership to consumers. Australian owned businesses can, therefore, use ‘Australian owned' representations as a marketing tool in support of their products.
Moreover, where an Australian owned business is producing goods in Australia, both the local manufacture and the local ownership can be highlighted to consumers with representations such as ‘Australian owned and made'.
Q. Am I permitted to use regional claims, such as ‘Made in Tasmania'?
A. Yes, provided such claims are not false or misleading. The defences established by the Trade Practices Act 1974 (TPA) apply only to country of origin representations. They have no bearing on regional claims (such as ‘Made in Tasmania' or ‘Product of Queensland'), which continue to be governed by the general provisions of the TPA that deal with false and misleading conduct.
Q. Can foreign owned businesses that operate in Australia use ‘Made in Australia' claims?
A. Yes. Goods produced by foreign owned or multinational organisations in Australia can be labelled ‘Made in Australia' provided such a claim is not false or misleading. However, a foreign owned company operating in Australia may not include representations or images on their products that imply to consumers that the company is Australian owned.
Q. Do the origin labelling rules in the Trade Practices Act apply to products from other countries?
A. Yes. The Trade Practices Act legislative provisions for country of origin labelling apply to all products sold on the Australian market, regardless of whether those products were produced here or overseas.
Q. What are the penalties for making misleading claims?
A. A corporation that makes a false or misleading country of origin claim can attract a fine of up to $200,000 per offence under the Trade Practices Act 1974. Individuals may be fined up to $40,000 for a similar offence.
Q. Who is responsible for enforcing the laws?
A. The Australian Competition and Consumer Commission (ACCC)
Q. Who should I contact if I'm worried about my own country of origin claims, or if I think one of my competitors is breaking the law?
A. In either case, businesses should contact the Australian Competition and Consumer Commission (ACCC). The ACCC is happy to respond to telephone, written or facsimile inquiries, but cannot provide ‘legal advice'. Contact details for the ACCC may be obtained from the Commission's web site at www.accc.gov.au [External site].
Q. Do I have to say that my product has imported components or ingredients?
A. Under the Trade Practices Act you are not required to make a country of origin statement, unless not to do so would be misleading or deceptive. So you do not have to state the source of your components or ingredients unless you make a country of origin claim. Remember that certain classes of goods (eg food, medicines) are required to be marked with their country of origin under other legislation.
Q. Where can I get more information?
A. Further information about country of origin labelling may be obtained from the Australian Competition and Consumer Commission.
February 2008