Leading industry groups, Australian Organic Limited (AOL), and ACO Certification Limited have spoken out at a public hearing for the federal food and beverage manufacturing inquiry. They claim that the industry is being held back by Australia’s labelling laws.
AOL and ACO were accompanied by representatives from brands including Barambah Organics, Nerada Tea, Kehoe’s Kitchen, Trumps Organics, Inglewood Farms and Hive+Wellness Australia.
Australia is the only nation of the 38 Organisation for Economic Co-operation and Development (OECD) member countries without a legislated definition of the word organic.
AOL chief executive officer, Niki Ford, said this has opened doors to misleading claims on labelling from some operators, undercut those who go through the rigorous certification process, and created costly red tape for certified producers exporting products.
“There is no definition around what can be claimed as organic. If you look at the ACCC website, one definition is for organic, and one is for certified organic,” she began.
“That’s the challenge. Even if you have one organic ingredient, or a very small percentage, you can put organic on your packaging.
“We have had many conversations with the ACCC, and presented a table of products physically in front of them, but legally there’s no ability to change it because being certified is not mandated in the domestic market.
“From a consumer perspective there is a lot of confusion and a lot of deceptive labelling. Our last research with consumers suggests that 33 per cent have been misled by products claiming to be organic, but have as little as one organic ingredient in them,” said Ford.
AOL’s research suggests that because of these misleading products, the majority of consumers begin to view the industry as a whole as dubious, with 67 per cent of respondents stating they would have an issue with buying organic again.
“You can see the compounding effect that one single product can have on a whole sector. We are out of step globally and for us as an industry it’s the greatest issue we face in creating a profitable and productive organic sector,” said Ford.
Export challenges
Ford said that if Australia had a domestic mandate, it would unlock export markets – as trading partners would be open to granting equivalency to Australian-certified products. Currently, exporters must seek certification in each market.
Representatives from organic fermented foods producer, Kehoe’s Kitchen, and bee product producer, Hive+Wellness, said the unnecessary pressure of regulations was turning growers away from becoming certified organic producers.
They stated that it is particularly difficult with compounding ingredients, and having to apply for and receive organic certification from international trading partners, such as Japan, Korea and the United States.
Nerada Tea CEO, Stewart Le Bon, said the ambiguity around the definition of organic doesn’t just create confusion among consumers, it affects company’s investment decisions.
“We have 1100 acres in far north Queensland as a tea plantation and a third of that is undergoing transition to organic,” he said.
“We are a small player competing with multinationals who can make claims on packaging which are not certified organic. Our margins are very, very low and it’s very hard to compete.
“Ambiguity in an industry causes confusion to the people having to make informed decisions, such as, do we continue to go down the path of organic transition at the plantation?”
Ford told the Committee that companies are having to withdraw from overseas markets, when faced with costs that can run into the millions of dollars.
“There are people in our sector who have multiple, full-time employees in their business just to manage how many certifications they have,” said Ford.
“It's extraordinary to think that you are employing people to manage red tape rather than things that could drive growth.”
