AFGC: Palm oil labelling bill “unworkable”

Posted by Nicole Eckersley on 4th July 2011

Palm oil Bill unworkable and will cost industryA palm oil Bill – which compromises the nation’s food and grocery labelling system – is unworkable in its current form and must be referred to a House of Representatives Committee for further discussion and examination, the Australian Food and Grocery Council (AFGC) urged today.

The Australian Food and Grocery Council today called the recent Palm Oil labelling bill, passed in the Senate with amendments last week, “unworkable”, and called for a House of Representatives Committee to further discuss and examine the bill.

The bill was rejected by a Senate Committee, but passed in the senate by an unexpected alliance between the introducer of the bill, independent senator Nick Xenophon, the Greens and the Coalition.

The Bill calls for the mandatory labelling of palm oil within 12 months on all food and grocery products, both on the grounds of truth in labelling and in an attempt to allow consumers to avoid the ingredient, which has been implicated in the destruction of orangutan habitat in Malaysia and Indonesia.

The AFGC said the bill will “impose significant costs to industry, compromise good regulation and labelling and won’t help to save one orangutan.”

AFGC Chief Executive Kate Carnell said there are many reasons why the Truth in Labelling Bill must be referred to a committee for further discussion.

“The Bill only names palm oil as the required ingredient to be listed on a label. Very few products in Australia contain whole palm oil. Most products use derivatives of palm oil or palm kernel oil – which are not listed in the Bill,” she said.

“Food labelling is a State and Territory-based responsibility. As a result, States and Territories will have to pass legislation to require palm oil labelling. They have not been consulted at all on this issue and a Committee would allow States and Territories to have input into the Bill.”

“Enforcement of the Bill will be extremely difficult. How the ACCC will enforce the legislation remains unclear. The ACCC has not been consulted at all on this issue,” she added.

“Palm oil and its derivatives are unable to be verified by laboratory testing as the fatty acids and derivatives are not unique to palm oil. How will the ACCC enforce this?”

“The Bill potentially breaches the Australia / New Zealand Food Treaty, where Australia must not introduce any amendments to food law “without effective consultation” with New Zealand. NZ authorities have not been consulted,” Carnell said.

“Twelve months is not long enough for industry to comply. The standard amount of time given for label changes is 24 months. The cost of changing a single label is between $5000 to $15,000 per product stock keeping unit (SKU). As there are 60,000 products on supermarket shelves – with up to one third containing palm oil – this equates to hundreds of millions of dollars in extra costs.”

“The Bill undermines the current Council of Australian Governments’ (COAG) Blewett Labelling Review process, which is still underway.”

“As a result, industry is urging all MPs to seriously consider the ramifications of the Bill, and refer it to a House of Representatives Committee so that States and Territories, New Zealand authorities, the ACCC, FSANZ and other interested parties can have their say,” Carnell said.