This outbreak is a reminder that there are problems with Australia’s food supply. After the offending ingredient had been identified and products were recalled, consumers claimed that they did not know that the berries were coming from China.
The berry products were labeled in compliance with consumer education and current labeling laws. Prime Minister dismissed the initial calls for change despite the recall showing inadequate labeling. He claimed that the move would be detrimental to business, increase the price of food, and make it difficult for companies.
Abbott changed that this morning when he asked Barnaby MacFarlane and Ian MacFarlane from the Agriculture Ministry to present a proposal in March to the cabinet. MacFarlane warned that consumers might have to pay for the changes.
The current system of food labeling is flawed: It does not reveal the origins of food. The company can state that a product was made in Australia as long as at least half of the manufacturing costs were incurred in Australia.
Consider the production of a jar jam. The total cost includes the price of the hole, the lid, and the jar. The jar could be responsible for half of the production costs, allowing jam ingredients to be imported while still being able to claim that the jam was made in Australia.
The report of 2011 on Australia’s effective food-labeling systems described the challenges to improving transparency. The report identified country-of-origin labeling as a contentious issue and made recommendations:
For foods that make some Australian claims, it is recommended to develop a framework for labeling the country of origin based on the weight of the components and ingredients (excluding the water) in the food.
Christine Milne, leader of the Greens party, took up this recommendation. Just before the berry scare, she presented a bill that would improve transparency in country-of-origin labeling. It requires three labels to cover the place where a product was grown, manufactured, and packaged.
In January 2012, Choice, a consumer organization, launched a Campaign about Country-of-Origin labeling after a survey revealed that 86% of respondents thought such labels were unclear.
Choice proposes three tiers of a system that specifies “products of” (fruits and vegetables) and “manufactured” (packaged). This would include foods that multiple companies produce. It isn’t easy to separate individual ingredients. The choice will test the exact wording with consumers.
Include the origin of imported ingredients in the “ingredients list” as a simple and practical solution. Ingredient lists are required by law to appear on all products. Ingredients are listed by volume from the most to the least.
Peanut butter is a good example. The list of ingredients includes roasted peanuts (the first ingredient), vegetable oil, salt, and sugar. If the labeling laws required the listing of the country of origin of imported components, then the list could say roasted nuts (China), vegetable oil (Chile), Sugar (Philippines), and Salt.
The default position would be that ingredients sourced locally would not need to be stated as being made in Australia. Only imported ingredients would have to declare the country of origin.
It’s about Time
The Australian Food and Grocery Council has been outraged by Milne’s bill. This is the leading food, beverage, and grocery manufacturing organization. Food manufacturers have responded to the announcement by the prime minister. The food manufacturers say that changing the labeling system would be an unreasonable burden for them.
It is not the same as adding a system of increased reporting and testing. Risk assessments and testing are important, but label changes will give consumers more confidence.
Quality-control procedures and Australian food laws support the fact that food companies can track each ingredient’s exact origin. The only thing consumers ask for is that the companies tell them what they know.
The change in Australia’s country of origin labeling system will give consumers the power to make informed choices on the free market. It will also eliminate the information asymmetry that keeps consumers in the dark.