Have you ever stopped and looked at a product that makes a claim to being Australian made, and then wondering if it was true? Most normal people would of probably stopped being curious after that point, but not us here at FindLaw. We view the world through legal tinted glasses, and began to speculate if there were laws that mandated whether or not a product can make such claims – and if so – what are they? The short answer to the question is: yes, there are indeed laws in the Australian Consumer Law (ACL) that do outline when a product can legitimately lay claim to being made or produced in Australia. So come with us, as we explore the laws of when a product can make a true blue claim to being Australian made.
The rules of country of origin representations
Part 5-3 of the ACL sets out the regime in determining whether a good or product which claims to be Australian, can make such an assertion, or whether the claims are actually false, misleading or deceptive.
The country of origin representations regime as outlined in the ACL, interact with ss 18 or 29(1)(a)(k) as well as 151(1)(a)(k). In order for a person not to contravene the country of origin representation provisions, there are certain general requirements that need to be met:
• the goods must have been substantially transformed in Australia
• 50% or more of the total cost of producing or manufacturing the goods occurred in Australia, and conform to the s 256 calculations under the ACL
• Australia was the country of origin for each significant ingredient or component
• all, or virtually all, of the processes involved with production or manufacturing happened in Australia.
How are the costs of Australian made goods calculated?
In order for representations of an Australian made product not to be considered as false, misleading or deceptive, ss 256 and 257 of the ACL sets out the manufacturing costs which are to be determined for a claim not to attract a breach. The general rule for a person to meet the Australian made claim for a good or product, is that 50% or more of the total costs must be attributable to the country in which the good or product has been manufactured.
Interestingly, the costs of shipping goods to Australia may also be included as part of the Australian cost component, along with any insurance and port clearance costs.
What is the difference between the terms, ‘Australian made’ and ‘product of Australia’?
Making a distinction between ‘Australian made’ and ‘product of Australia’ may seem like an exercise in semantics, however, there is an important difference in the application of the terms.
Anyone who wishes to apply the ‘product of Australia’ label to their goods or products, must be able to prove that all significant ingredients or components are sourced from Australia. In contrast, the threshold for making a claim is lower for a ‘made in Australia’ label if the overall costs associated with the product amount to 50% or more, which is attributable to Australia.
Although the focus of this piece relates to Australian goods and products, the requirements can be applied to any good or product making a specific claim to be from any other country. Who would have known that the requirements were so detailed and technical in the first place? Certainly not the writer of this piece.