In Brief
"Made in Australia"
"Product of Australia"
Other ClaimsLogos
More Information
‘Made in Australia’, ‘Product of Australia’, ‘Australian Made’…………
Can your business correctly make these claims?
Many small businesses may not be aware that new rules for country of origin representations – which includes labelling, packaging, logos or advertising - came into effect on 13 August 1998 in the Trade Practices Amendment (Country of Origin Representations) Act 1998.
Section 53. (eb) of the Trade Practices Act prohibits businesses from making a false or misleading representation concerning the place of origin of goods. However, that Act has provisions that define a set of defences for goods that pass certain tests.
Country of Origin Claim
Provisions of Trade Practices Act, s53
'Made in …...''Australian Made'‘Manufactured in…...'
'Product of ……’‘Product of Australia’‘Produced in ……’
Other claims eg ‘Built in Australia’‘Assembled in Australia’
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To be able to claim ‘Made in Australia’, ‘Australian Made’, or ‘Manufactured in Australia’ your product must have been substantially transformed in Australia, and at least fifty percent of the cost of production, must have been carried out in Australia.
Substantial transformation is defined in the Act as "a fundamental change…….in form, appearance or nature such that goods existing after the change are new and different goods from those existing before the change."
In plain English this means that simple treatments or processing – such as repackaging or mere assembly – of imported goods are not likely to qualify for the ‘Made in Australia’ claim.
To calculate cost of production, the provisions of the Act set three broad categories of cost: materials, labour and overheads. Material costs are generally straightforward to calculate. But labour and overheads only count towards cost where they can be reasonably allocated to the final goods.
Under the new law, the Government can make regulations that unsophisticated processes can not qualify as substantial transformation or that certain costs become disallowed from being counted towards cost of production. Currently there are no such regulations.
To claim ‘Product of Australia’, ‘Produce of Australia’, ‘Produced in Australia’ the criteria is much more rigorous. Each significant component of the good must originate from Australia, and all, or virtually all, of the production processes must take place in Australia.
Other Claims
The legal position for other claims that implies a lesser connection with the country eg. ‘Built in…’ or ‘Assembled in....’ remains unchanged. However, where the imported content of a product than the local content, the label claim should read, for example, "Made in Australia from imported and local ingredients", or where the local content is greater, "Made in Australia from local and imported ingredients". These claims are assessed on their merits. They run the risk of legal action by the Australia Competition and Consumer Commission (ACCC), a competitor or any interested party if the claim can not be substantiated.
Logos
The new laws allow for a country of origin logo to be prescribed by regulation. A prescribed logo will signify that a certain percentage of costs (above 50 percent) of producing the goods occurred in a given country. No regulations have yet been made to prescribe any logos.