Soaring organic market drives looming change to labelling laws

Organic sales rush fuels push for mandatory label and certification law

Agribusiness
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A third of organic product consumers believe they have been misled by labels on goods which were not legitimate

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Australia's $2.5 billion organic industry is increasingly confident its fight for mandatory truth in labelling laws banning the word "organic" on uncertified goods will score a victory in federal parliament next year.

With 56 per cent of Australian shoppers claiming they deliberately bought organic products last year, the pressure is on to get Canberra to tighten regulatory oversight of what is certified and promoted as chemical-free.

Federal legislation would require domestic food, cosmetic and clothing product labels to identify a minimum standard of organic accreditation, bringing the rules in line with long-established organic export requirements.

Recent research found almost a third of consumers buying organic products in 2020 believed they had previously been misled by labels on items which were not legitimate.

More proof needed

Peak industry body Australian Organic Limited also found lack of trust in labels claiming organic status was a real barrier to buying for 30pc of shoppers who frequently sought out organic goods.

Almost a quarter of consumers who did not buy organic also wanted greater surety that those products were true to their label.

Details of a government review into organic marketing and regulatory assurance standards are still under wraps, but Australian Organic chief executive officer Niki Ford said the industry's festering concern about the cost of inadequate labelling rules would "hopefully be resolved soon".

"We've had support across all political parties, but we need legislation to be written up and put to parliament," she said.

"Our goal is to see it passed next year."

New legislation will help set up equivalency relationships with overseas markets - Niki Ford, Australian Organic

A group of 16 organic industry producers, processors, marketers and consumer representatives have been working with the federal government to develop regulatory frameworks for domestic truth in labeling and certification.

Export markets win

The new laws will help organic exporters, too, because they are currently restrained from entering overseas markets by the lack of government enforced regulatory standards at home.

In many cases exporters must organise costly, specific certification approval for each of their export markets because there is no mandatory baseline standard within Australia.

"There are a lot of lost export opportunities because of the cost and effort involved, but new legislation will help set up equivalency relationships with overseas markets," Ms Ford said.

Niki Ford

Niki Ford

"Given global organic sales values leapt more than 13pc last year, with particularly high growth rates in our key markets such as North America - up 16pc - Australian exports could easily climb to represent half our marketplace."

That could equate to $2b in export sales by the end of the decade given Ms Ford's expectation of the Australian industry being worth about $4b in 2030.

At present one third of our organic production is exported, with the US, the world's biggest organic market, accounting for a third of those sales, including 95pc of our red meat.

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Within four years organic consumption in the US is tipped to be worth $32 billion - roughly equivalent to half the current value of Australia's entire farmgate output.

She said Asia-Pacific and Europe consumption growth of 12pc and 9pc respectively last year reinforced prospects of a bright future for exporters.

China currently buys 65pc of Australia's organic dairy exports and all our organic eggs exports, while Singapore takes 40pc of fresh produce exports.

About 40pc of organic wine exports go to Sweden.

Australia is in a unique position with a reputation for producing clean, reliable and trusted products in categories seeing most demand - Najib Lawand, Export Connect

Export Connect director, Najib Lawand, who has helped producers establish organic trade partnerships for 20 years, noted Australian products had a significant point of difference on global markets.

"Australia is in a unique position with a reputation for producing clean, reliable and trusted products in categories seeing most demand," he said.

"Globally, baby food, condiments and spreads, snack foods, fruit, vegetables and meat are the organic categories with the biggest growth - all commodities Australia produces well."

Supermarket support

Back at home, supermarkets account for a massive 90pc of domestic market sales, reflecting a big push by major retailers to cash in on rising consumer demand, taking a once-niche market mainstream.

Aldi, Coles and Woolworths captured 77pc of domestic organic sales last year according to Australian Organic's 2021 state of the market report.

Three quarters of organic products in Coles and Woolworths also carried the trademark bud logo, symbolising their industry-certified organic status.

"Supermarkets aren't just playing a big role in making organic produce available to everyday shoppers, they recognise there's real demand in a segment they want to be part of," Ms Ford said.

"Woolworths, for example, also has a $30m fund providing grants to help farmers upgrade their organic production or convert to organic to ensure more supplies are available to meet that demand."

Australia currently has more than 4200 organic operations according to the peak industry body, an increase of 38pc in the past 10 years.

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The story Soaring organic market drives looming change to labelling laws first appeared on Farm Online.

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