The organic movement in New Zealand is going strong. To date, food and beverage businesses have been operating within a relatively loose legal framework when representing their products as “organic”. Participation in private certification schemes has been voluntary, rendering consumer laws such as the Fair Trading Act 1986 somewhat limited in their ability to police the truthfulness and accuracy of such organic claims.
However, that may all be set to change with the introduction of the Organic Products Bill to Parliament in early March.
The Bill introduces national standards for the production of organic products which businesses would need to follow in order to be able to market and label products as organic. This will go a long way towards creating consistency and clarity for consumers. Relevant Ministries will be responsible for setting up organic product standards and for the administration, monitoring and enforcement of these regulations.
Under the proposed Bill, producers must apply for approval to describe products as organic products. The standards applicable to marketing a product as organic will carry a strict liability offence (i.e. it will be irrelevant whether the producer intended to or even knew it was in breach).
Retailers of final pre-packaged products marketed as organic and businesses providing a service to consumers using a pre-packaged product marketed as organic, will also need to ensure compliance with the relevant standards. Whilst such persons are not required to be approved under the proposed Bill, their retailing and use of non-compliant products (even if unintentional) could amount to misleading conduct or the making of a false representation in breach of the Fair Trading Act.
These businesses will need to put in place adequate contractual obligations with the organic producer to protect themselves. This will also raise interesting issues for parties involved in the supply chain of products which bear a trade mark or a label that incorporates the word “organic”.
A key purpose of the Bill is to facilitate international trade in organic products by controlling the import and export of products labelled as organic. Regulating the use of organic labels has been widely adopted overseas for some time now, with all but New Zealand and Australia adopting mandatory domestic standards. Failure to meet the relevant standards (or describing a product as organic without approval) in relation to export-only products will still be a strict liability offence.
The introduction of the Bill has been well supported and, some would say, overdue.
Public submissions on the Bill are open until 28 May 2020. If your business is likely to be affected, we recommend seeking advice early on in the process to reap the benefits of such legislation.
By Stephanie Hadley, Associate, James & Wells
