Is your business True Blue?

Date: Sep 02, 2009
Document Type: Newsletter

"Made in Australia". "Product of Australia". "Australian Made". Does your business make these claims, and more importantly, can your business legally make these claims?

The law

Rules for country of origin representations have been in effect since 1998, covering labelling, packaging, logos and advertising. Section 53 of the Trade Practices Act prohibits businesses from making false and misleading representations about the place of origin. Many small businesses are being caught out " do not let your business be one of the statistics by knowing what you can correctly and legally claim.

"Made in Australia"

To claim your product is "Made in Australia", "Australian Made" or "Manufactured in Australia", it must be substantially transformed in Australia and at least fifty per cent of the costs must be carried out in Australia.

Substantially transformed

As defined in the Act, a product is substantially transformed if it has fundamentally changed in its form, appearance or nature so that it is a new and different product than what it was originally.

Simple processing, such as repackaging or assembly, of imported goods do not qualify for the "Made in Australia" claim.

Costs carried out in Australia

These are production costs, which are set out in three broad categories: materials, labour and overheads. Labour and overheads costs only count where they can be reasonably allocated to the final goods.

Future regulations

Though no regulations exist yet, Government can regulate that unsophisticated processes cannot qualify as substantial transformation or that certain costs are not allowed from being counted towards production costs.

"Product of Australia"

Claims such as "Product of Australia" and "Produced in Australia" are more rigorous than "Made in Australia." Each significant component of the product must originate in Australia, and all (or virtually all) of the production processes must take place in Australia.

Other claims

These include claims that imply a lesser connection with the country, for example "Built in Australia" or "Assembled in Australia". There are no specific provisions in the Act and individual claims are assessed on merit.

Local and imported contents

The percentage of local to imported content in a product should be considered. For example, if there is more imported than local content the label should read "Made in Australia from imported and local ingredients". If the local content is greater than imported content, the label should read "Made in Australia from local and imported ingredients".

Legal action

Individual cases can run the risk of legal action by the Australia Competition and Consumer Commission (ACCC), a competitor or any other interested party if the claim cannot be substantiated.

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