Amidst an escalating debate about Country of Origin Labelling on food products in Australia, the most recent financial report from the local arm of global beer giant Heineken, which showed a drop in sales, suggests there are particular food and beverage products that Australians prefer to be imported.

Following on from health concerns about berry products imported from China, the Australian Federal Government is considering changing the rules for the way a product’s Country of Origin is defined and labelled. The move to change the labelling rules has been welcome by consumer group CHOICE and vegetable and potato growers’ representative body AusVeg, who have been pushing for such changes for some time.

Australians prefer imported premium product instead of made in Australia under license

Meanwhile, global beer giant Heineken’s joint venture with food and beverages group Lion has reported a drop in sales of 9.2 per cent to $65.8 million for the financial year ended 30 September 2014. Heineken Lion Australia reported a small increase in profits to $12.6 million, up from $12.2 million in the previous year.

Lion saw a drop in volume sales in its alcoholic beverages business more generally in the last financial year. Lion CEO, Stuart Irvine, said the drop in these volumes could be due to Australians drinking less alcohol overall. However, he said this was “positively coupled with a trend towards premiumisation, as consumers opt for quality over quantity and trade up to higher equity brands”.

Some commentators have suggested that despite Heineken’s status as a ‘premium beer’, the brand might be suffering from being considered a ‘local mainstream’ beer, because it is brewed in Australia.

The joint venture between Heineken and Lion brews Heineken beer at Lion’s Lidcome brewery in western Sydney.

Country of origin rule changes ‘may impact Australian producers’

Bryan Clark, the Australian Chamber of Commerce and Industry’s (ACCI) Director of Trade and International Affairs, said the Government needed to “think carefully” about whether it wants to deviate from the global standard, in which governments certify country of origin.

“The system of determining origin is often used by businesses and governments around the world to support statements about where things are made as well as to apply anti-dumping regimes, sanctions, compliance regimes for preferential trade agreements and import quota schemes,” Mr Clark said.

ACCI was instrumental in creating the ‘Australian Made, Australian Grown’ campaign, which aims to inform consumers of Australian products.

“Use of the iconic logo is backed by a strict compliance regime, yet stakeholders and governments continue to try to reinvent the wheel,” Mr Clark said. “Ministers and other members of parliament need to ensure that our international trade is supported by a strong system of certified origin that protects Australian producers and their claims about what is ‘Australian’ product,” he said.

Country of Origin Labelling debate

According to the ACCI, changing the product labelling rules relating to country of origin will “do nothing to improve consumer safety and could harm Australian producers”.

“While these proposals relate to the origin of products, they do nothing to address the adequacy of safety testing regimes, the real source of the problem,” said Kate Carnell AO, CEO of the ACCI. “The origin of goods is not a proxy for consumer safety,” she said.

“If we are not careful, we will end up with multiple, inconsistent systems for determining a product’s country of origin, leading to extra costs for business and consumers but no better outcome on product safety,” Ms Carnell said.

“Australia has wisely in the past sought to apply international standards and mutual recognition schemes, reducing costs for Australian businesses and consumers,” Ms Carnell said. “Any move to break away would be a mistake, creating additional compliance burdens in a kneejerk reaction to a food safety issue,” she said.

Ms Carnell said that in an era of global supply chains and inputs sourced from multiple places, “determining the country of origin is no easy thing”.

“Under the international rules, the key factor in determining where a product is made is where it undertakes its ‘last substantial transformation’,” Ms Carnell said. “This is the process by which Swiss chocolates can be called Swiss even though Switzerland has no cocoa trees,” she said.

Under these rules products with inputs from multiple places that are brought together in Australia are labelled as ‘Australian’ internationally.

“If we move away from this system, those very same products might not be labelled as ‘Australian’ in their home market,” Ms Carnell said.

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