Food manufacturers that wish to make certain claims on food labels and in advertisements have just six months left to make changes to their product labels and advertising to ensure they meet the criteria set out in the health claims standard (the standard) of the Food Standards Code.
What does the standard do?
The standard, which regulates health and nutrition-content claims on food labels and advertisements, will become mandatory on January 18, 2016.
Although the standard commenced in 2013, suppliers have had a three-year transitional period in which to comply with the standard or with the pre-existing transitional health claims standard 1.1A.2 (but not both). From January 18, the standard will become mandatory and the previous standard will no longer apply.
What are the changes in the standard?
The standard drastically changes the food labelling and advertising regulatory system. Under the transitional standard 1.1A.2, there are general prohibitions in place on labelling or advertising foods using the word ‘health’, or specifying weight-loss properties, or making therapeutic or prophylactic action claims, or medical-advice claims.
The only health claim permitted under the transitional standard is that increased folate consumption in at least the month before and three months following conception may reduce the risk of fetal neural tube defects, in respect of specific foods.
The changes under the standard will include a whole raft of new permitted claims – subject to them meeting certain criteria set out in the new standard. These include:
- A broad definition of health claim. A health claim means an express or implied claim that states, suggests or implies that a food or a property of food has, or may have, an effect on the human body. This can include an effect on physical performance, mental performance, functional performance, biochemical or physiological processes or outcomes, growth and development.
- Standards and requirements that must be met when making nutrition content claims. Claims such as ‘low in fat’, ‘diet’, ‘no added sugar’ and ‘good source of calcium’ must meet specific criteria listed in the standard before such claims can be made.
- Standards and requirements that must be met when making health claims. Health claims may be general-level health claims (eg, ‘calcium is good for bones and teeth’) or high-level health claims, which are those that refer to a serious disease or a biomarker of a serious disease (eg, ‘diets high in calcium may reduce the risk of osteoporosis in people aged 65 years and over’). More than 200 pre-approved food-health relationships are covered in the new standard, which suppliers must comply with and, if claims are not included in the standard, suppliers are required to self-substantiate and hold records in relation to the claims. Suppliers making high-level health claims must make only those claims set out in the standard. There are currently 13 pre-approved food-health relationships for high-level health claims in the new standard.
- Introducing a nutrient-profiling scoring criterion (NPSC). All foods and beverages with health claims must meet the NPSC score specified in the standard. For example, health claims will not be permitted on foods with scores exceeding the permitted NPSC score, which can mean foods high in saturated fat, sugar or salt. ‘Bonus points’ are provided for fruit and vegetable, protein and fibre content.
- Independent endorser bodies and endorsement requirements for food and health claims. Suppliers may make endorsing statements on their food products only if these are made with the permission of an endorsing body. An endorsing body, meaning a not-for-profit entity that has a nutrition or health-related purpose or function, must be independent and free from influence by the supplier of the food. This will mean, for example, that suppliers must not pay or provide donations to such a body, or have any other financial interest in the endorsing body. All endorsement documentation must be kept for up to two years after a product is last sold, advertised or available for sale
Penalties
Companies can face fines of up to $275,000 and individuals up to $55,000 for breaches of the Food Standards Code. Companies may also be subject to the penalties under the Competition and Consumer Act 2010, including for making false or misleading representations, with penalties of up to $1.1 million for companies and up to $220,000 for individuals, as well as companies being subjected to court-enforceable undertakings, high legal costs, corrective advertising and rebranding and public-warning notices. Consumers who have suffered loss or damage as a result of such conduct may also be entitled to damages.
What should suppliers do?
Suppliers should begin preparing now for the standard and check that any claims made on their packaging and in their advertising meet the criteria set out in the standard. However, suppliers should note that all products, including those ‘stock-in-trade’, must comply with the standard – not just new products.
Kathryn Edghill
Lead Partner
Kathryn is the lead partner of the firm’s Australian Competition Law practice, with more than 25 years’ experience specialising in competition law with particular emphasis on the anti-competitive conduct, consumer protection and franchising provisions of the Competition and Consumer Act.
Amy Cowper
Senior Associate
Amy is a Senior Associate in the firm’s Competition and Regulatory Law practice group and provides extensive advice in relation to competition and consumer law and food and therapeutic goods compliance.
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