Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

I rise to associate myself with Senator Faulkner's remarks and to talk about an issue that is very important to the grocery manufacturing industry in Australia. The proposed legislation on food labelling threatens to halt further innovation in our manufacturing industry. It also threatens the livelihoods of many Australians who are employed in the food manufacturing sector in regional and rural areas of Australia.

These new proposed changes to food labelling laws can be viewed as unnecessary window-dressing that only serves to confuse consumers and hurt manufacturers in Australia and as a move that is not supported globally. The Neal Blewett chaired Review of Food Labelling Law and Policy's report entitled Labelling logic recommends that a multiple traffic light labelling system be introduced on all Australian products. If implemented, this mandatory labelling system would threaten Australian jobs, manufacturing and innovation. It would confuse and even mislead consumers for no likely improvement in healthy food consumption.

A report by Food Standards Australia New Zealand, FSANZ, says that the recommendations in sections 51, 52 and 53 of the report on traffic light labelling go too far and would impact adversely on a number of industries in Australia. The recommendations suggest that a system of labelling be put in place which is complex and confusing and which uses symbolic 'stop' and 'go' traffic lights. Sections 20 and 21 of the report recommend that any company listing health benefits on its labelling be prevented from doing so. For instance, if a healthier, low-GI sugar were produced, the company that produced it could not say that the sugar was a healthier option for consumers than a regular brand of sugar. If a company could not inform the consumer of its brand's healthier options, the consumer could choose to buy a much unhealthier option. This in turn would mean that an effective incentive for manufacturing to develop more healthy and more innovative products would be lost as demand for such products died off. This could cause thousands of jobs to go as producers no longer found the need to expand and grow with the market. In fact, the figures supplied by the Australian Food and Grocery Council suggest that, if the proposed new mandatory traffic light labelling system were to be introduced, probably half of the 290,000 employees in regional and rural Australia in SPC, Golden Circle, the tomato canning industry and other areas would be threatened.

The manufacturing of food, beverages and groceries is Australia's fastest-moving consumer goods sector; it is Australia's largest and most important manufacturing industry. The food and grocery manufacturing industry is a vital contributor to the wealth and health of our nation. It represents 28 per cent of our total manufacturing turnover. This sector is comparable in size to the Australian mining sector and is more than four times larger than the automotive parts sector. The industry's products are in more than 24 million meals consumed by 22 million Australians every day of every week of every year. The food and grocery manufacturing sector employs more than 288,000 people, which represents about three per cent of all employed people in Australia, and it pays $13 billion a year in salaries and wages.

This growing and sustainable industry is made up of 38,000 businesses and accounts for $44 billion of the nation's international trade. The industry's total sales and service income in 2007-08 was $102 billion, and, with value added, that figure increases by nearly $27 billion. The industry spends about $3.8 billion a year on capital investment and over $500 million a year on research and development. At a time when manufacturing in every sector is faltering in Australia and jobs in rural areas especially are going, recommendations such as traffic light systems only work to further threaten Australian jobs and confuse consumers.

SPC and Heinz have already started shedding jobs. If this labelling goes ahead, there will be more casualties. Under the traffic light system, products as diverse as low-GI sugar, tinned pears, tinned pineapple, fruit juice, chocolate and low-fat margarine will be required to impose bright traffic light symbols

Consumers could also be faced with a confusing situation where a product contains red lights, green lights and amber lights and if that is not confusing, I do not know what is. Faced with this confusing symbolism, the consumer may just opt to buy another brand that does not hold the traffic light system and gives clear information, such as a table, for instance.

So the system, far from helping, actually takes products that have been carefully developed to produce a much more healthy result from the consumer and reduces their marketability by creating a labelling system which is not only misdirected but also, in some cases, misleading, confusing and wrong. There is a real danger that the traffic light system, if placed on products, will cause the development of new and healthier types of products to stall. Not only that, but R&D funding for such products could be made nonexistent due to the perception that the products are unhealthy and not worthy of development.

The flow-on effect of implications of this could be devastating to local manufacturing. Once R&D stalls, products are lost, along with jobs and the share of the international export market, a result that does not bear thinking about, especially at a time when other manufacturing industries, such as the steel industry, are losing jobs to overseas markets and industries. For the most part, the Australian Grocery Council has made it clear that it supports the review's classification of food labelling, but traffic lights go too far and are unnecessary to educate the public on the sorts of food they are consuming. We have to ask: why are we penalising Australian companies for trying to produce more innovative and healthy products? This is an illogical recommendation given that no country in the world has introduced a mandatory multiple traffic light labelling system. As recently as June 2010 the European Union rejected a traffic light system.

An example of a product that will be hit hard by the new regulations is sugar. Queensland's largest agricultural crop and one of Australia's most important rural industries will be at risk if traffic light labelling is introduced. Sugar is a vital part of Queensland's and Australia's economy and supports over 4,000 growers. Under the report's recommendation, a mandatory traffic light, front-of-pack labelling system will be required on all sugar products, including low-GI sugar and lower calorie white and raw sugar blends, as well as products containing natural producing sugars. Fructose will be required to impose bright traffic light symbols. It is quite ridiculous that a two-kilo packet of sugar will contain a bright red label because the product contains sugar.

The traffic light system only shows in symbolic terms what health benefit or risk a product possesses, and this means that the interpretation of the labelling is, most of the time, left up to the consumer's own judgment and not actual factual information.

Mr Acting Deputy President, time will not permit me to finish the rest of my speech. Seeing that this is basically a non-political speech, I wonder whether the senator at the table will have the good grace to let me have leave to incorporate the remainder in Hansard.

Jacinta Collins (Victoria, Australian Labor Party, Parliamentary Secretary for School Education and Workplace Relations) Share this | Link to this | Hansard source

Let me have a look at it first.

Leave granted.

The remainder of the speech read as follows—

And so the proposed health traffic light system warning will only confuse and misinform the public. Consumers will not be able to differentiate between one product or the other at a time when the Australian sugar industry is creating more innovative and healthier products for Australian and overseas consumers. And as I have previously pointed out, no other country in the world is taking up this new form of labelling. Instead most go for a very clearly laid out table form of labelling. The Daily Intake Guide (DIG) is the labelling system preferred by the European Union. DIG front-of-pack labels outline the amount of energy, fat, saturated fat, sugar and salt in a standard portion of the food and how that translates to average daily intake.

Furthermore, public health issues are multi-factorial and complex. It is unrealistic to expect that these can be addressed through reforms to food labelling alone. For food labelling to be effective it must be part of a package of initiatives that addresses all the factors. And we must also consider the cost of changing these labelling laws, which will be substantial, and effect industry profoundly.

The use of the food labelling system to support public health initiatives will inevitably increase the regulatory burden and its related costs on industry and consumers. It is essential that if industry and consumers are to meet this burden that it will result in substantiated and sustainable benefits. And yet , many of the recommendations proposed by the report are not supported by evidence that this will be the outcome. The proposals might 'feel good', but it has not been established that any noticeable beneficial outcomes will be achieved.

Public health policy is rightly directed towards encouraging consumers to eat less energy-dense foods. However, ironically if traffic light labelling goes ahead an opportunity will be lost for products such as sugar to evolve into products that provide consumers with general level health benefits that support this goal if the nutritional profile eligibility criteria as proposed are implemented. We already know that that there is an increase in sales of CSR's 'Better for You' sugar variants such as LoGiCaneTM and SMARTTM. This is evidence that consumers want such products and that the market is growing.

The inability to make beneficial health claims will remove the incentive and purpose for the sugar industry to invest in research and development to provide improved products which the community desires. Such products provide a national benefit that will enable Australian grown sugar to be differentiated from competitor sugar abroad and at home.

This legislation is not only harmful but in view of the rest of the world's reluctance to put into place the same initiatives, and the fact that there is no real evidence to show these new systems and laws will be any more effective, why would we do it? Why would we stop manufacturers taking the initiative to develop better products that are healthier for the consumer, and why then would we stop them from informing the consumer so that the full benefit and potential of these newly created products could be realised?

The whole concept of the traffic light system seems to be moving Australia further and further in the direction of a nanny state, where we are told what to buy, what to eat. In an Australia that is suffering the effects of the high dollar and competitive overseas market place, we can ill afford to bring in these recommendations. They are not fair, they are not logical, and in the long run they will only hurt manufacturers and, ironically, the people the laws are supposed to protect—that is the consumers.