Sunday, March 4, 2012


One of the troubling questions that haunt international food trade is whether any country can impose unilateral laws which smacks of discrimination. The COOL policy now being implemented in some countries is an example where the retail shops are required to exhibit on the label the country of origin of any products sold by them. The "Country of Origin Law" (COOL), purported to be intended to serve the right of consumer to know fully about the nature of contents in a sealed food pack, is grossly discriminatory because it serves the selfish purpose of the government in the country of import to protect its own domestic industry against competition from imports. Interestingly the local retail industry itself is against such a policy because some of the products imported are far cheaper than the locally produced ones though quality wise both are comparable. Though the importing country governments feel that sheer patriotism would drive the consumers in hordes to buy locally made products, when it comes to buying many families consider price as the most sensitive factor in deciding on a purchase. If this is the reality it is unlikely that COOL will work in favor of domestically made food products. Here is a take on this interesting issue.

"COLES and Woolworth's are selling imported food without disclosing where it comes from, while still being able to boast it is "Made in Australia". The supermarket chains are using gaps in labeling laws that enable them to avoid disclosing where imports come from - despite laws stating that shoppers should be told the country of origin of their food. When the supermarkets were asked about examples of imported food sold under their private labels without showing the country of origin, Coles revealed two fruit juices for which the original source was undisclosed. Advertisement: Story continues below Woolworth's revealed Homebrand dried apricots, sultanas and dates were sourced from Turkey and 90 per cent of Homebrand orange juice concentrate was from Brazil. The labels describe the dried fruits only as "Packed in Australia from imported ingredients". A spokeswoman for Woolworth's agreed it was impossible for customers to determine the country of origin of these products "but we would also make the point that this labelling complies with what we are required to do". There is widespread disaffection with the labeling system, with Coles, the Australian Food and Grocery Council and Choice calling for a better approach. Only one in 100 Australians can explain what ''Made in Australia'' actually means under the complicated formula in the law, according to research by the labeling lobby group Australian Made, Australian Grown. "We believe it is so complicated and people are so confused about what this means that it tends to devalue the Made in Australia label," grocery council chief executive Kate Carnell said. In one Coles example, its Smartbuy three-litre apple and blackcurrant juice is sold under the label "Made in Australia from imported ingredients". To use "Made in Australia" without any further qualification, manufacturers must meet a test that shows both a substantial transformation and at least 50 per cent of the value of the good being created in Australia, including the packaging. This month, the federal government took no action on reforms to clarify country-of-origin labels proposed in the Blewett report into food labelling. Loopholes in the laws include food that is imported into New Zealand, repackaged and then sent to Australia, with no need for a label about where the food originally came from. In Australia, labelling foods with a country of origin is a legal requirement. But the loophole exists because of Australia's free trade agreement with NZ, which has a domestic policy of voluntary country-of-origin labels (except for wine). Coles and Woolworths say they label all NZ-sourced food to the higher Australian standards".

The fact food industry in Australia is exploiting the loopholes in the COOL policy speaks volumes about the likely negative impact it will have on food business in that country. Given the fact that Australia cannot provide fully the needed food for its citizens through domestic production calls for imports of some foods at least, it is imperative to go for imports. If the retailers stop importing these foods, there can be a shortage of these items, generating an upward price push for these products, harming the interests of domestic consumers. These discriminative policies ought to be frowned upon by WTO as they are hindrance for a truly free international trade. When industry world over are adopting extreme and highly stringent safety protocols under ISO, HACCP and other systems of  safety conformation, where is the need for the citizens to know from which country the food is imported? Does this information help the consumer to decide about the quality and safety of the product he is buying? No way! At best COOL is a protectionist policy that deserve to be condemned in no uncertain terms.


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