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Introduction
1.2 Conduct of the Review
1.3 Description of the imported food sector
1.4 The Imported Food Inspection Program
1.5 The future of food safety regulation in Australia
1.1 Origins of the Review
In 1993, a review, headed by Professor Frederick G Hilmer, reported on how best to ensure that there were no unnecessary restraints on competition in Australia. In April 1995, the Council of Australian Governments (COAG) agreed to implement a package of measures designed to extend pro-competitive policies, a key element being the Commonwealth's Competition Policy Reform Act 1995. The objectives of the Act are to help to dismantle private and regulatory barriers to competition, and to encourage competition throughout the whole economy. It also aims to provide the domestic policy arrangements needed to realise the opportunities arising from Australia's external trade policies and developments in the international economy.
As a result of the agreement by COAG, the Commonwealth Government has instituted a comprehensive examination of its legislation to ensure that National Competition Policy (NCP) is being followed. This Review is part of that process. The Commonwealth schedule of reviews approved by Cabinet on 4 June 1996 listed the Imported Food Control Act 1992 for review in 1997-98.
The principle behind competition policy, as stated in the Hilmer Report, is that it "seeks to facilitate effective competition to promote efficiency and economic growth while accommodating situations where competition does not achieve efficiency or conflicts with other social objectives" (Hilmer et al. 1993, p. xvi ). This Review focuses on those parts of the Imported Food Control Act which restrict competition, or which result in costs or benefits for business. The terms of reference for the Review and membership of the Review Committee are shown in Appendices A and B, respectively.
1.2 Conduct of the Review
The Review formally commenced in March 1998, and there have been regular Review Committee meetings through its course. Advertisements were placed in the national press in early May, inviting submissions on the operation of the Imported Food Control Act 1992. Invitations to make a submission were also sent to over eighty stakeholders, including industry, consumers, Australian government instrumentalities and governments of countries with significant food exports to Australia.
In accordance with the terms of reference, the Review examined the effect of the legislation on competition. This also involved the examination of those administrative aspects which are closely tied to the legislation. In a number of cases, the Committee preferred administrative alternatives to legislative change where they were simpler, more effective and more timely than legislative change. This aspect was also provided for in the terms of reference.
The Review received 28 written submissions from a broad cross-section of the food importing and processing industry, government departments and consumer representatives (see Appendix C). In addition, the Review Committee visited Sydney, Melbourne, Brisbane and Canberra, consulting with food importers and customs brokers, peak industry and consumer organisations, relevant government instrumentalities and health experts. The Review Committee undertook industry site visits and held discussions with policy and operational staff of the Australian Quarantine and Inspection Service (AQIS) responsible for the Imported Food Inspection Program (IFIP). For details of those with whom the Review consulted, see Appendix D.
Detailed research was conducted into the cost aspects of imported food, both for costs and benefits, and economic and health experts were consulted to ensure that the Review Committee's deliberations had a sound basis.
A Draft Report was prepared from the material gathered, and nearly 200 copies were distributed to stakeholders for comment. Nineteen comments have been received, and these have been considered in detail including discussions with those providing comments with numerous viewpoints being incorporated into the final Report.
1.3 Description of the imported food sector
The total value of food and beverage imports, encompassing processed foods and raw commodities, in 1997-98 was $3.6 billion, accounting for just over 10 percent of the Australian food market (ABS 1998a,b). Most food is imported for final household consumption, with about a quarter of food imports being used as ingredients for food processing in Australia.
The main food import categories are fish and seafood products ($691 million), coffee, tea, cocoa and spices ($651 million) and vegetables and fruit ($623 million) (ABS 1998a). Figure 1.1 shows imports of foods by category for the past three financial years. The increase in 1997-98 in dollar terms in the major categories should be seen against fluctuating exchange rates and Australia's own food export performance.
Figure 1.2 shows the value of Australian food exports and imports since 1986-87, in constant 1989-90 prices. Over this period, both imports and exports have trended upwards. However, the ratio of exports to imports has remained fairly constant, with food export values being just over four times greater than import values.
The main sources of Australia's food and beverage imports by value are shown in Figure 1.3. The biggest single food exporters to Australia are New Zealand, the United States, Thailand, and the United Kingdom. The main types of foods imported into Australia from these countries are shown in Table 1.1.
Figure 1.1 Australian food imports by food category (by value)
Source: ABS (1998a)
Figure 1.2 Australian food imports and exports constant 1989-90 prices
Source: ABS (1998a)
1997-98
Source: ABS (1998a)
Table 1.1 Australia's major import sources, and the major products from those sources (by value)
| Country |
Product |
|---|---|
|
New Zealand Thailand United Kingdom |
Fish fillets Cheese Fruit and vegetables Food preparations, including sauces Alcohol (spirits) Food preparations Coffee extracts Fruit and vegetables Nuts Seafood Alcohol (spirits) |
Imported foods generally range from gourmet specialties and complete retail packs of ready-to-eat food to basic ingredients for cooking and processing. They can be relatively safe or have a high degree of risk attached to them. The companies which import them range from large, sophisticated importers and large manufacturing firms to small family-based operations.
There are no government controls on who may import food and beverages, and commercial barriers to becoming an importer are relatively low. Not surprisingly, therefore, there are many participants. AQIS databases list some 25 000 companies or persons as importers of food, but the overwhelming majority of these would be infrequent or once only importers. As to regular food importers, their size and range of operations varies greatly, from small family-based enterprises selling in one State only to large companies operating with a national focus.
The nature and level of potential food safety hazards associated with imported foods also varies greatly. Until recently, to prevent those hazards eventuating, importers would seem to have relied, in the main, on the risk being managed by the overseas producers. This approach was supported by the fact that the principal markets for those producers tended to be the United States and Europe. With changes in both market expectations and the regulatory approach to delivering food safety, importers are now being forced to take a more planned approach to ensuring the safety of the food they import. In keeping with the lack of homogeneity in the industry, the capability of importers to respond to the changed environment varies significantly and is not always analogous with the size of the importer or their market share.
1.4 The Imported Food Inspection Program
1.4.1 Origins of the program
Since the 1950s, with major advances in food production technology, food markets have been developing on a global basis. Whilst this development provides consumers with a wide variety of food as well as some traditionally seasonal foods on a year round basis globalisation gives rise to new food safety concerns. Rapid and efficient transport systems can spread the vectors of food contamination and food-borne illness more widely than previously. Consequently, the increase in the international food trade has been accompanied by the implementation of food safety programs specifically aimed at imported food.
During the 1980s, some particularly serious incidents of food poisoning occurred overseas which highlighted the need to develop an imported food inspection program in Australia. Examples were:
- about 50 deaths in the United States from soft cheese contaminated with Listeria monocytogenes;
- many occurrences around the world of staphylococcal enterotoxin poisoning caused by contaminated canned mushrooms;
- deliberate adulteration of wine with di-ethylene glycol; and
- widespread radioactive contamination of food in the mid 1980s from the Chernobyl accident.
Recognising the lack of measures Australia had to prevent such incidents, a national Imported Food Inspection Program (IFIP) was introduced in 1990, focussing on food considered a public health risk. In 1992, through the Imported Food Control Act, IFIP was given specific legislative backing and expanded to cover all imported foods and beverages.
The task of developing and implementing the program was given to the Australian Quarantine and Inspection Service (AQIS), as the only national food inspection agency with trained inspection staff in all major ports around Australia. The body responsible for developing Australia's food standards, the Australia New Zealand Food Authority (ANZFA then the National Food Authority), was given the task of undertaking scientifically based risk assessment for the program.
1.4.2 Legislative basis for the program
The Imported Food Control Act and its associated Imported Food Control Regulations comprise the legislation that enables AQIS to monitor and inspect imported foods. The legislation provides that the requirements with which imports must comply are those contained in the Food Standards Code, which is developed by ANZFA (see Section 2.5).
The Act, which was given Royal Assent in 1992, specifies (among other things):
- the role of ANZFA in risk assessment;
- the Food Standards Code as the applicable national standard;
- the power of the Minister of the Department of Agriculture, Fisheries and Forestry to make Orders which, for example, specify foods considered risk categorised foods;
- the making of regulations and their coverage;
- control procedures relating to imported food;
- the certification and quality assurance arrangements that may be accepted in lieu of inspection;
- the treatment of failing food;
- enforcement provisions and decision review; and
- fees
1.5 The future of food safety regulation in Australia
Worldwide trade in processed foods is growing at more than twice the rate of trade in primary products and, by the turn of the century, trade in processed or value-added products is expected to account for 75 percent of global agricultural trade compared with around 50 percent in 1985. The future of food safety regulations needs to be examined in the context of this rapidly increasing trade, as well as changing food consumption patterns and technological developments in food processing.
Substantial changes have occurred in the types of food consumed by Australians over the past three decades. Now many Australians seek new food styles such as Mediterranean, South-East Asian and Indian food. Along with the acceptance of "new" cuisines, there has been a change in preparation methods and in the demand for "new" ingredients.
Australians now eat out regularly. The average Australian household spends about 27 percent of the total weekly expenditure on food and non-alcoholic beverages in the form of take-away or restaurant meals (ABS 1996). This trend has increased the demand for different foods and ingredients, including foods relatively underprepared or "fresh", compared to the traditional thoroughly cooked or salted foods. The emerging Australian lifestyle of "food on the run" and "food for high energy" has also created a demand for specialised foods such as sports drinks and sports foods (nutrition bars etc) and some selected confectionery. These demands are met in part by imported food and ingredients.
The emerging food patterns and consumer preferences do not come without problems. To meet the consumer demands, new preservation and processing techniques have emerged. These new techniques often rely on more than one control mechanism to deliver safe food to the consumer.
For example, meat products in the past were preserved mainly using high levels of salt. These days they may be preserved by a combination of low salt level, low sodium nitrite and phosphate levels, and, in some cases, marginally lower pH, combined with refrigeration during distribution and storage. Therefore, to ensure safety of a new-style meat product, several "hurdles" must be controlled during processing, instead of one (ie, salt level). End-product inspection and testing is consequently much less effective in verifying the safety of the product, and the assessment of process controls is more important, particularly for assuring food safety.
A great deal of activity within Australia and internationally has promoted the use of food safety management systems such as Hazard Analysis Critical Control Point (HACCP). The mandating of such systems for production of many Australian food export commodities and some domestic sections of the Australian food industry recognises that these systems are a more efficient and effective mechanism to ensure food safety.
Traditionally, end-product testing has been employed by IFIP. However, such testing has been questioned in view of the changed food consumption, processing and preservation techniques, and the changing Australian food regulatory environment. The emerging trends have increased the need to inject more scientific rigour into food safety measures and to consider food production and transportation as a system comprising several food safety hurdles.
These patterns have set the stage for Australia to review its approach to food standards and implementation of food safety practices in the production, processing, storage and transport of food. The above trends and changes also affect imported food and, therefore, should be considered in developing a modified imported food control system, which takes into account the importance of processing controls.