Country of Origin Labelling for Seafood 31 JULY 2015 ROB FISH CHAIR NORTHERN TERRITORY SEAFOD COUNCIL

Background 2006 Country of origin labelling introduced for seafood through Food Standards Code (exemption granted for food service sector) CoOL for Seafood introduced throughout the supply chain in the Northern Territory through their fisheries legislation Review of food labelling recommends extending CoOL to all primary food products. Implemented at request from COAG Review does not remove exemption but is explicit in the requirement for government intervention for market failure Senate inquiry into CoOL for Seafood recommends removing the exemption Senate debate on separate independent Bill demonstrates multi party support for the principle if implementing CoOL for seafood. TODAY No firm position provided by either major party. Supported by crossbenchers and the Greens

OBJECTIVES for Food Standards In developing or varying a food standard, FSANZ is required to meet three primary objectives the protection of public health and safety; the provision of adequate information relating to food to enable consumers to make informed choices; and the prevention of misleading or deceptive conduct. In developing and varying standards, FSANZ must also have regard to: any written policy guidelines formulated by the Ministerial Council.

Political Support To date neither major party has responded to the Senate inquiry recommendation. Statement from relevant Ministers; “ There is a need to balance producer and consumer benefits with any additional regulatory burden (costs) on Industry” The recent Senate inquiry has already considered the costs and benefits and made a recommendation to remove the exemption.

What are the benefits?

Producer benefits Increased demand for Australian farmed and wild caught seafood, leading to increased prices and/or increased production. These benefits are dependant on being able to produce more product and the consumers willingness to pay more for Australian Seafood. *additional benefit in the NT has been far greater connect between consumers and industry.

Objections from food service sector and seafood importers Mandatory CoOL would not result in more Australian seafood being sold – the country has already reached its sustainable limit of fisheries production; Research indicates that whilst consumers may express concerns about issues related to country of origin, less than five per cent reflect those concerns in their actual purchasing decisions; Mandatory CoOL would increase administrative red tape and compliance costs for foodservice businesses; and CoOL must not be used as a surrogate for food safety or sustainability information – this is likely to mislead consumers.

Capacity CLAIM: Australia is at full production capacity for seafood “there is little, if any, latent capacity for Australian producers to meet any increase in demand that may result from the extension of CoOL.” This we now call the “Pinocchio effect”.

Willingness to pay more? Willingness to pay less??????????? CLAIM: Consumers are not willing to pay more for Australian Seafood and there is no evidence of “margin rip off”. Australians already pay a premium for what they believe is domestic product. Evidence of “margin rip off” is extensive.

Example menu Local Flathead Fillets……………………….$36 Fresh Barramundi Fillets…………………..$39 Chicken Breast…………………………………..$32 (fish dishes served with chips and salad, chicken with Roasted Asparagus, Fennel and Capsicum with a Champagne Buerre Blanc). If the barramundi is imported the margin rip off on a single serve at 180g could be over $7. Australia doesn’t import chicken, without CoOL for seafood, imported barramundi is taking market from both the Australian flathead producer and the Australian chicken farmer. To put this in context if the food service sector provides 1bn serves of imported seafood a year with a margin of $2-3 on each serve, we are seeing consumers being misled out of billions of dollars and domestic producers robbed of this important market.

Admin Costs CLAIM: Mandatory CoOl would limit flexibility of operators to source produce based on “price seasonality, quality, menu design and supplier relationship”. It would create the need to constantly change menus. This claim is evidenced by reference to a seafood restaurant and claims menu changes would reach $150,000 per annum. The menu provided includes Sydney rock oysters, Hervey Bay scallops, Local octopus, Moreton Bay Bugs, local Flathead, John Dory and Snapper. The only two significant seafood ingredients not labelled by origin are Barramundi and Prawns. It is claimed that “our seafood varies from day to day week to week season to season.” The reality however is that the vast majority of the seafood is labelled by origin therefore does not change.

Using Market Advantage CLAIM: CoOL must not be used as a surrogate for food safety or sustainability information – this is likely to mislead consumers CoOL cannot mislead consumers. Consumers are confident about the sustainability, health and safety and work conditions in Australian Fisheries and Aquaculture. Concept of “Halo” marketing fails Australian producers. Net result can only be a loss of market share of other Australian produced proteins such as beef and chicken to imported seafood. Imported seafood needs to invest in their own branding and consumer trust, not just claim that of domestic consumers.

KEY MESSAGES #1: CoOL results in an increased demand for Australian Seafood and Australian aquaculture and wild harvest fisheries are well placed to increase production to meet this demand. #2: Without mandatory CoOL, unlabelled seafood on the menu is assumed to be Australian. #3: Menus display a large premium for Australian seafood and consumers are misled when this large premium is charged on unlabelled, cheaper imported seafood. #4: The seafood industry has invested millions in providing CoOL and traceability information to the back door of every restaurant, a piece of chalk may be the only investment required to pass this information on. #5: Despite receiving CoOL, the food service sector is unwilling to pass CoOL information on for imported seafood, a clear failure of the voluntary system.

KEY MESSAGES #6: Not removing the exemption to the Food Service sector, results in Government supporting a deception worth billions to the consumer and Australian producers. #7: Current price margins are only available because consumers are willing to pay a premium for Australian seafood. #8: Mandatory CoOL ensures savings made using cheaper imported seafood, are passed on to consumers by lowering the price of some seafood, as demonstrated in the fresh fish sector. #9: Country of origin information prevents consumers from being misled and is a key value driver for seafood purchases. #10: Consumers can be confident that seafood labelled as Australian is from a world’s best practice managed fishery.