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The small business ombudsman says proposed country-of-origin rules would be a nightmare in practice.
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Seafood labelling regime ‘huge burden’ on hospitality
04 April 2023
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Revised rules about country-of-origin labelling for seafood will be a nightmare for small hospitality businesses unless common sense prevails, says the small business ombudsman.
ASBFEO chief Bruce Billson said the proposed model would impose a significant cost and compliance burden on the hospitality industry and needed to be reconsidered.
“Country-of-origin labelling for seafood in hospitality should be simple, useful and proportionate to the seller’s offering,” Mr Billson said.
“While it is rightly intended to improve transparency for consumers and support Australian seafood producers, the proposal is onerous, costly and an unhelpful addition to the growing regulatory burden mounting on small and family businesses.”
The federal Department of Industry, Science and Resources is consulting on the proposed model for mandatory country-of-origin labelling for hospitality businesses.
Mr Billson called for the entire scheme to be reconsidered – given its high compliance costs – or failing that, to require only voluntary reporting where seafood is a minor ingredient or a small proportion of the value of the offering
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“An independent study, commissioned by the department and conducted in 2021 by Deloitte Access Economics, found that the business costs of compliance would outweigh the benefits to consumers,” Mr Billson said.
“Many hospitality businesses who take pride in using local seafood already promote this to enhance their competitiveness, but a blanket requirement is not a sensible answer.”
Under the current proposal, any seafood used in a dish would need to be listed on a menu as Australian, imported, or mixed. The proposal excluded “seafood by-products”, meaning anchovy paste will not require labelling, but anchovies on their own would.
“This will be onerous for hospitality businesses to navigate and maintain compliance,” Mr Billson said.
“When Australian seafood is sold out or not available, a small business may decide it does not want to disappoint customers so will temporarily source an imported product, yet this will require the costly step of reprinting new menus for every change.”
Mr Billson also said many small businesses did not have the resources or capability to verify information from suppliers.
“Small businesses cannot reasonably be expected to investigate external supply chains to ensure the authenticity of a supplier’s country-of-origin claims about its products,” he said.
He said if the labelling requirement was enforced there should be an additional category that could be used on menus in cases where there might be frequent change.
“Allowing businesses to use a fourth label of ‘variable’ would remove the excessive cost of reprinting menus and avoid inadvertently attributing an incorrect or misleading country-of-origin label in these instances,” he said. “Businesses with discerning customers would no doubt make sure that they can respond to any questions they may be asked.”
Mr Billson said checklists and assistance for small businesses needed to be easier to understand, with many in the hospitality industry speaking English as a second language.
The 2021 Census found that 56 per cent of food and beverage service small business owners spoke a language other than English at home.
“Many of our small businesses, particularly in the hospitality sector, are run by people who have moved to Australia from overseas and have made a wonderful contribution to the vibrancy of the community and vitality of the national economy,” Mr Billson said.
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