COLUMN – Country of origin gets an Australian twist

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There is no doubt that while company name, logo and tag line on products are closely followed by consumers worldwide, the name of the nation from where a product emerges still holds a central place in human psyche, writes Manonithya Ramasamy.

In other words, though global conglomerates have become synonymous with their products, the name of the originating country of the ingredients has for long determined the stature of products in the market place. Loyalty, trust and popularity of the products have been strongly dictated by the country of origin, like Belgian chocolates, German engineering, Italian and French cheese and wine, Japanese electronic products, Swiss watches, Egyptian cotton, Arabian dates, Colombian coffee, Indian Darjeeling Tea etc. However, globalisation in the recent past, has changed how goods are sourced and prepared to be sold to consumers.

A change in nature of global trade wherein the ingredients are outsourced from various parts of the world coupled with the increase in consumer awareness and demands of the consumers are contributing to the gain in attention to the name of the country. The ‘origin’ still holds a significant importance in marketability of the product.

Concept – COO:The country of origin (COO) denotes a place or a region from where the final product has been manufactured, produced, or harvested.

COO and Countries: In addition to consumers’ information, the COO occupies a significant position for the countries in terms of global trade. The countries pay attention to COO in order to facilitate or impose trade related restrictions like application of preferential and non-preferential tariffs, quotas, antidumping duties, non-tariff measures, etc. Thus, the COO is a crucial element in both exportation and importation of products.

COO and FBOs: For any trade in agricultural and food products, the Food Business Operators (FBOs) are required to attach the certificate of origin along with other documents like commercial Invoice and other supplements, customs import declaration, labelling and marking, bill of lading, etc. The FBOs rely on certificate of origin to derive any available preferential tariff from the importing country. Other than tariff benefits, the FBOs may benefit from the swiftness in customs clearance depending upon the mutual arrangements between the trading partners.

COO and Regulatory Framework: The concept is executed at multiple levels through various channels. At a multilateral level, it begins at the World Trade Organization (WTO) via the mechanism of rules of origin, customs union,trade agreements and finds its position in the national legislations through the Consumer Protection Acts, horizontal and vertical labelling standards/measures/regulations.

COO and Consumers: Labelling holds the most prominent position in terms of source of information for consumers on any traded products. The terms- “MADE IN ….”, “PACKED IN …..” provides information in the labelling section. The consumers identify the social, political, economic and cultural aspects of the country in addition to the brand name of the products.

Thus, any changes in the requirement of country of origin has implications for all the concerned stakeholders ranging from countries, food business operators, traders, to the consumers.

The Australian Plan: Given this existing scenario, Australia’s amendment on the country of origin labelling information is expected to yield a swirl effect in trading and marketing of food products. The legislation is titled as ‘Competition and Consumer Amendment (Country of Origin) Act 2017 under the Consumer Law. In case of imported food products, the Australian legislation has listed the labelling requirements by determining whether the food is grown, produced or made in another country/packaged in another country depending upon the categories of food.

In case of imported food products, the country of origin would be the exporting country. However, in presence of Australian ingredients, their levels by weight and chart may be provided in the label. For instance: Made in India from 100% Australian ingredients. The percentage may differ based on the level of Australian ingredients. Further, the main ingredients may also be listed by using the term – ‘WITH’ like Made in India from 25% Australian ingredients with China (name of the ingredient) and Japan (name of the ingredient). Such information is mandatory for food products other than seasonings, confectionery, biscuits and snack food, bottled water, soft drinks and sports drinks, tea and coffee, alcoholic beverages.

Possible Implications:

The implications of the Australian proposal are many. But significantly this could change the way countries now participate in global and regional value chains. Companies may now have to be far more transparent about places from where products are procured for producing the final product. This will also help establish some countries, which are, hitherto, unknown because they have minimal impact on a product. This would be very useful for small countries and companies that hope to make their presence felt in value chains.

(The columnist is a Research Analyst with ASL- a firm that on a day-to-day basis follows regulations and standards across the globe. She can be reached at manonithya@slg-india.com)

 

 

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