Country of origin branding – the issues and how to leverage this important asset

Presentation by Ian Harrison, Chief Executive, Australian Made Campaign

Food Regulations and Labelling Standards Conference

2 December 2013

Outline of presentation

A few comments about the Australian Made, Australian Grown (AMAG) logo, the campaign behind it (Australian Made Campaign Ltd or AMCL) and the logo’s use in Asia

Why is country of origin branding important

What are the current issues in food labelling and how can the system be simplified

The AMAG logo in brief

Certification trade mark created by the federal Govt in 1986:

legally enforceable set of rules govern its use

products must be registered with AMCL to use it.

Assigned to Australian Made Campaign Ltd (AMCL) in 1999

not-for-profit, public company set up for that purpose by the business community through the ACCI

not a branch of Government.

Ownership of logo transferred to AMCL in 2002

binding management deed in place with federal Government

→ the federal Government is the beneficial owner of the AMAG logo.

Campaign is funded by licence fees

1/10th of 1% of sales of ($300$25K pa, + gst)

not funded by Government

GLOBAL BRAND

DOMESTIC BRAND

Australian Made, Australian Grown logo family

? ?

Campaign growing

500

700

900

1100

1300

1500

1700

1900

02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13

Total licensees

Strong corporate support – Campaign Partners

Logo recognised and trusted

98% 94% 98%

86% 85% 88%

0%

25%

50%

75%

100%

2006 2009 2012

Recognition Trust

(Roy Morgan Research)

Key marketing messages

The AMAG logo is the solution for shoppers looking for genuine Australian products and produce.

When shoppers see the logo, they can buy with confidence

clean, green, healthy, fresh, etc

high standards, good value, fitness for purpose, readable instructions, warranties, etc.

Buying Aussie products puts $s back into the local economy

jobs, training opportunities, wealth, etc.

Focus is on where the is product made/grown/processed, not on who owns the shares in the company

Ownership important, but can be distraction from CoO.

Domestic Marketing Campaign

TV, radio, print and outdoor advertising to shoppers.

extensive PR.

trade shows and expos. comprehensive website and social media strategy:

developing our online community into a marketplace for shoppers and licensees.

enormous support from major retailers.

Export promotions

Ongoing program since 2004.

Jointly funded by federal Govt, 2004-2010.

Research promotions research

USA, Canada, Dubai, HK, Bangkok, China, Singapore and UK

worked closely with Austrade (incl secondment)

selected retail & trade promotions continuing.

Extensive research clearly establishes the success of the logo as Australia’s global product symbol.

Arab Health, Dubai January 2012

Seoul Food Expo, South Korea, 2013

Big 5, Dubai November 2009

PARKnSHOP Hong Kong, Feb/March 2010

Expo 2012 Yeosu, Korea

Australian Pavilion

World Expo, Shanghai China, 2010 - retail bags for Australian pavilion,

Asia Fruit Logistica – Hong Kong , Sept 2012

Winter Fancy Foods, San Francisco 2010 (G’Day USA)

NTUC FairPrice Singapore, September 2013

Overseas registration of the logo

Registered CTM in USA & China, registered TM in South Korea and pending CTM in Singapore.

Establishes formal presence of the logo in each country.

Provides legal framework in each jurisdiction for protection of the logo and therefore the products carrying it.

Plans for further 7 Asian countries.

Australia has a very strong nation brand

generally a positive in market places everywhere for a product or service to be recognised as ‘Australian’

and this can generate a much-needed premium for Australia’s exporters and import-competitors alike.

In an environment where increased costs and a high $AUD have seriously undermined the competitiveness of many Australian products, country of origin is an asset we should be driving much, much harder.

The alternative? - the loss of more processing and manufacturing capacity.

Country of origin branding is important

The challenge always is how to best let shoppers know the product is ‘Australian’

The kangaroo works:

Trust issue with ‘Australiana’ labelling.

The AMAG logo is seen as official.

With Australia’s strong nation brand, it is a powerful global marketing tool as well as a CTM.

Turning now to the current issues in food labelling and how the system can be simplified going forward

Quick overview of current requirements

Australian Consumer Law (ACL) sets out definitions and requirements for claims such as ‘Made in Australia’, ‘Grown in Australia’ and ‘Product of Australia’.

The ACL is policed by the Australian Competition and Consumer Commission (ACCC). The ACCC has in the past published guidelines on CoO claims in general, and a range of specific industries including food and beverage.

The ACL does not require any product to carry a CoO claim, but if it does, it must be truthful.

Overview of current requirements (contd)

The Food Standards Code (FSC) requires a CoO claim on all packaged foods and unpackaged seafood, fruit, vegetables and most, but not all (?), meats

includes fresh, frozen, cooked, pickled, cured, dried and smoked product.

The FSC relies on the CoO definitions of the ACL.

Food Standards Australia & New Zealand is responsible for the FSC, but not for enforcement

this rests with a range of national, state, territory and local government bodies.

Too many players?

Overview of current requirements

An unqualified ‘Made in Australia’ or ‘Australian Made’ claim requires that the product be ‘substantially transformed’ in Australia, with 50% or more of the cost of producing or manufacturing the product being incurred in Australia. The ACCC guidelines which provided more information about what may or may not be considered ‘substantial transformation’ have now been withdrawn. The guidelines needed review, but not withdrawal

examples of change needed - bacon, crumbed fish, roasted coffee beans, blended fruit juices, etc

Overview of current requirements

‘Qualified claims’ such as ‘Made in Australia from local and imported ingredients’ are allowed, but not covered anywhere in the legislation. No administrative mechanism to allow a business to obtain a definitive answer as to whether it may safely claim that a product is ‘made in Australia’

may hesitate to make a CoO claim for fear of prosecution.

Food labelling reform needs to go further

A country of origin label is required for most foods but not for some, eg required for beef but not for kangaroo

inconsistent and confusing.

The rules for ‘Australian made’ include ‘substantial transformation’, which is unclear and subject to interpretation.

No access to a definitive answer as to whether a product meets the ‘Australian Made’ criteria.

Food Standard in CoO labelling was revised in July this year, but still does not cover all unpackaged foods.

The ACCC has withdrawn its guidelines for food.

Exclusions - ‘substantial transformation’ of foods

In 2011, AMCL amended the rules for using the logo with an ‘Australian Made’ claim on food products to specifically exclude a number of processes from meeting the ‘substantial transformation’ test.

Further amendments to the Code are currently before the ACCC, including additions to this list of exclusions. The full list of processes currently nominated by AMCL as not meeting the ‘substantial transformation’ test for using the Australian Made logo on food products is:

Exclusions - ‘substantial transformation’ of foods

• packaging or bottling (new) • size reduction – cutting, dicing, grating, mincing, etc. (new) • reconstituting – e.g. of fruit juice concentrate (new) • freezing, canning or simple preserving processes associated with packaging • mixing or blending of food ingredients, where the resulting product is not

substantially different to the separate ingredients • juicing – extraction of juice from fruit • homogenisation • pasteurisation (new) • seasoning • marinating • coating – as in crumbing prawns or battering fish fillets • pickling (new) • dehydrating/drying (new) • fermentation – e.g. in the production of wine, cider or salami (new) • curing – the treatment of meat with curing salts, as in ham or bacon • roasting or toasting – e.g. of coffee beans, nuts or seeds.

What needs to happen next

Mandatory country of origin labelling should be required on all food products.

And, for the benefit of both businesses and consumers, the rules should be consistent, clear and as simple as possible with:

one set of rules for all States and Territories one set of rules for all types of products (food and otherwise) rules to apply equally to all types of food products

What needs to happen next

Clear and unambiguous regulations governing CoO claims for food products should be set out in a specific consumer product information standard under the ACL.

Regulations should be considerably tighter than the current guidelines in the area of what processes are considered to constitute substantial transformation

the AMAG Logo Code of Practice could be used as a starting point.

Manufacturers should be able to apply to an official body to obtain a ruling on whether their product meets the criteria for a particular country of origin claim.

What needs to happen next

The ACL should be amended to include specific provisions on the use and wording of qualified claims.

These should include a prohibition on the use of the words ‘Made in ...’ or equivalent, where the product does not meet the unqualified ‘Made in ...” test

‘processed in’, ‘blended in’, etc., but not ‘made in’.

What needs to happen next

Australia does not have an official symbol that its businesses can use to signify genuine Aussie products

the AMAG logo is obviously the de-facto occupier of this space.

Australia should have such a symbol and it should be the AMAG logo

nothing wrong with a bit of consistency e.g. Canadian maple leaf

New political climate – hopeful for action on a number of fronts, including food labelling.

The Australian community working together to promote its products and produce to the world

What constitutes ‘Australian made’?

Product must meet 2 tests:

Product needs to have been substantially transformed (not simple assembly or packaging) in Australia AND

50% or more of the cost of production must have been carried out in Australia.

Both tests must be met

‘Australian Grown’

All the significant ingredients grown in Australia

Not exported and re-imported

All the significant processes undertaken in Aust

‘Product of Australia’

All the significant ingredients grown in Australia

All the significant processes undertaken in Aust

‘Australian Grown ......’ qualified claim

≥50% of cost of production in Australia

≥ 90% of total ingoing weight grown in Australia

≥ 50% of total ingoing weight must be the specified goods (eg apples & pears)

100% of specified ingredients (apples & pears) grown in Australia

Specified ingredients (apples & pears) not exported and re-imported

APPLES & PEARS

‘Australian Seafood’

Must be a seafood product

All of the products significant ingredients are grown/harvested in Australia

All, or nearly all, of the processing has been carried out in Australia

‘Australian’

Must meet all the criteria of at least one of the preceding claims

Only for use on goods sold outside Australia

Must not give a misleading impression as to the origins of the major ingredients or components of the product