As a business owner it is important that you take proper care with the packaging of your goods and any claims you make as to the country of origin of the goods. Labeling is tightly regulated by the Australian Competition and Consumer Commission (“ACCC”). If your goods are incorrectly labeled your business can face serious consequences for making false or misleading claims as to the origin of the goods.
The ACCC has recently released a set of guidelines to assist business owners make the correct choice when stating the country of origin of their goods on the packaging.
Under Australian Consumer Law (“ACL”) a business can make a claim regarding the country of origin of a good on its packaging and in advertising and promotional materials, so long as this claim is not false, misleading or deceptive.
Section 29 of the ACL prohibits false or misleading representations being made about goods, with section 33 prohibiting misleading conduct as to the nature of goods. The legislation attaches harsh penalties to a beach of either of these sections when it comes to your goods.
Therefore if you are labeling your goods with their country of origin, or stating this in any advertising or promotional materials then you must have a reasonable basis for making this claim and sufficient evidence to back up the claim. It is not just labeling your goods as ‘Australian Made’ or ‘Products of Australia’ that can land your business in hot water, as the Act applies equally to a claim about the product coming from any other country. It is essential that you have evidence to back up any claim about the origin of your goods.
Extra care must be taken in the packaging and labeling of products to ensure compliance with the Act where the goods are the end product of a result of materials, processes or ingredients from several countries.
As well as this the goods do not have to specifically state they are the product of a particular country in order to breach the ACL, as silence is not a defence to a breach. This means that using a pictorial representation in order to link your goods to a particular country without specifically stating it can also be a breach of the law.
For instance using Australian symbols, such as animals, plants or architecture on a good that is not a product of Australia will fall foul of the ACL.
As a business owner selling goods in Australia it is essential that you ensure you meet your obligations under ACL as to the sale of these products to avoid facing any penalties.
Penalties under the ACL include facing civil action, criminal offences for unfair practices, infringement notices of $102,000 for ASX listed corporations, or $10,200 for bodies corporate, as well as enforceable undertakings, where action is commenced by the ACCC. While if action is commenced by a competitor or consumer your business can face a pecuniary penalty of up to $1.1 million for corporations or $220,000 for individuals.