Food manufacturers have just seven months left to get to grips with new food labelling laws regarding nutrition and health claims that can be made in Australia.
The Health Claims Standard in the Food Standards Code significantly expands the range of health, nutrition and related claims permitted on food labels and advertisements.
Organisations or individuals who don’t comply with the rules face stiff penalties. There are fines of up to $55,000 for an individual or up to $275,000 for a corporation which are found to be flouting the law.
Food businesses that wish to make health or nutrition claims on their food labels and in their advertising must comply with the Standard from 18 January 2016. There has been a three year voluntary transition period – but January will be crunch time when the Standard becomes mandatory.
The changes will require manufacturers and their marketing departments to carefully consider the claims they make on their food products and in their advertising.
The previous Standard only permitted health claims which stated that increased folate consumption in at least the month before and three months following conception may reduce the risk of foetal neural tube defects in relation to specific foods – this new Standard will open the door to a whole raft of new health and nutrition claims – subject to companies being able to meet criteria set out in the new Standard.
For example, companies that wish to make nutritional claims such as 'good source of calcium' will need to meet certain criteria set out in the Standard, and contain more than the amount of calcium specified in the Standard.
The changes will encourage food industry innovation – and provide more insight to consumers about the range of healthy food choices. At the same time the Standard should reduce the risk of misleading and deceptive claims about food.
When it comes to claims the new Food Standards Code distinguishes between general level health claims and high level health claims. To make any such claims companies will have to ensure they meet the strict criteria set out in the Standard.
So with seven months to go before the Standard becomes mandatory, what do businesses need to do now?
Review the new Standard and determine whether your current packaging, advertising and marketing materials are compliant with the new rules regarding nutrition and health claims. Also determine whether there is merit in making additional claims under the new standard. There are more than 200 pre-approved food-health relationships in the new Standard, and 13 pre-approved high-level health claims which food companies could make use of if their products meet the defined criteria. Do packaging and promotional materials need to be replaced to comply with the new rules, or take advantage of the pre-approved claims criteria?
Assess whether it would make more sense to discard old stock and replace it with new, or recall products and repackage them, expiry dates permitting. This applies to both products made in Australia or those sourced from overseas. This will require careful assessment of both economics and logistics associated with each alternative.
Make sure you know who is distributing and stocking your products. Conduct an audit of stocks in hand – from 18 January next year all products in non-compliant packaging will need to be removed or repackaged, similarly advertising and marketing materials need to be brought into line with the new Standard.
Alert advertising and marketing agencies to the new Food Standard and remind them of their compliance obligations with regard to any packaging or marketing materials. Review agreements with agencies, and ensure they are updated with alerts – require agencies to confirm receipt of these alerts in writing to ensure a proper audit trail is maintained.
Ensure that the product claims and associated packaging and marketing materials also comply with other legislation such as the Competition and Consumer Act, the National Measurement Act and Country of Origin Labelling laws which are under review at time of publish.
Also send alerts to product suppliers, retailers and distributors reminding them of the need to remove all old, non-compliant stock by 17 January 2016. Ensure distributors in particular fully understand the changes to the regulation, and the penalties for non-compliance. Again request written confirmation of compliance.
If you are using any endorsing bodies to approve or certify your product, ensure that you meet the set criteria in the Standard and have advised such organisations of your intention and have their authority and licence to use their trade mark for that product. This is an express requirement of the new Standard. Documents proving that approval must be retained for at least two years after the last product bearing that mark is sold, advertised, or available for sale.
Test product formulation to be sure that it complies with the new Standard and any claims being made about the product. This can be conducted by in house food technologists or outsourced to specialist service providers. Ensure proper record keeping of results. The Standard introduces a nutrient profiling scoring criterion (NPSC) which establishes the guardrails for any health or nutrition claims being made. Food technologists may need to assess the NPSC of products.
If you wish to use claims such as “low in fat”, “diet”, “no added sugar” you will need to ensure that the product composition meets or exceeds the criteria set out in the Standard.
Once your new compliant packaging and promotional material is prepared, distribute product as soon as possible. There is no need to wait until 18 January 2016 as there has been a three year transition period which has allowed early adopters to move ahead of that deadline.
Finally, establish a process to monitor and deal with any complaints about claims made on the new packaging.
Amy Cowper is a senior associate in the Sydney office of international law firm Bird & Bird.