Consumer product regulation

Australian federal, state and territory legislation imposes many controls over the composition, design and labelling of consumer products.

Last updated: October 2018

Introduction

Australian federal, state and territory legislation imposes many controls over the composition, design and labelling of consumer products. Regulatory authorities often conduct random inspections and sampling to determine whether products comply with mandatory requirements designed to minimise the risk of injury. An investigation can also be initiated by a complaint from a consumer or competitor. Failure by a manufacturer, supplier or importer to comply with these controls can incur penalties under relevant legislation. Also, entry into Australia may be refused for non-compliant imported goods. Consumers may take legal action for damages suffered as a result of non-compliance. Therefore, companies dealing in consumer goods should have an effective compliance program, ensuring that all risks associated with their products are identified and effectively managed.

Complexity of laws

Australian jurisdictions can vary in how they regulate certain products. Identifying what laws apply to each product can be difficult. Additional labelling requirements are imposed on certain imported goods. There is also more general legislation such as the Australian Consumer Law (ACL) and other consumer protection legislation. Industry guidelines and codes of practice may also be relevant.

Further difficulty may arise if products cannot be easily classified under legislation. For example, cosmetic and medicinal products with a similar composition, but arguably different functions, can attract different regulatory requirements. In such cases, the presentation, proposed use of and claims made in marketing the product help determine its classification.

Australian standards

Australian standards are generally voluntary and not binding unless adopted by law. However, many have been adopted by legislation, making compliance mandatory. These standards can require goods to comply with particular performance characteristics, composition, methods of manufacture, processing, construction and packaging. Alternatively, they can specify the type of information to be given to consumers.

Around 2,500 Australian standards are currently referenced in legislation. In some cases, independent certification of compliance with a standard is also required. For example, under electrical safety laws, common household appliances such as toasters and heaters must comply with the relevant Australian standards, hold a certificate of approval and be marked to show that approval.

Australian standards are also used as the basis of mandatory consumer product standards under the ACL. The Federal Government has the power to make all or part of a voluntary standard mandatory.

Products held to mandatory standards include bicycles (performance and safety requirements), children’s nightwear (design and fabric specifications and labelling requirements) and sunglasses (performance and safety requirements).

Failure to comply with a mandatory standard is an offence. Failure to comply with a standard, whether voluntary or mandatory, may also be evidence of negligence and that the product is defective or not fit for purpose.

Hazardous goods

Products containing ingredients with the potential to harm people or the environment because of their chemical properties are subject to strict legislative control in Australia. This includes household cleaning products and medicines containing poisonous substances. A range of legislation imposes restrictions on the storage, handling, transportation, packaging, labelling and advertising of these goods.

Many of the labelling and packaging requirements for poisons are set out in the Standard for the Uniform Scheduling of Medicines and Poisons and are adopted in various degrees by legislation. They require the inclusion of information such as usage instructions, cautions and safety directions. Special packaging is sometimes required, as in the case of child-resistant safety closures.

Dangerous goods legislation also contains requirements for the transportation, labelling and construction of packaging of goods that are explosive, poisonous, flammable or corrosive.

Registration of certain goods

Registration requirements often apply in Australia to manufacturers of goods or to the goods themselves. For example, therapeutic goods can only be manufactured by a licensed manufacturer. They must also be included on the Australian Register of Therapeutic Goods as either listed or registered goods, prior to sale. Strict standards also exist in relation to their manufacture, composition, handling, labelling and advertising.

Therapeutic goods may be assessed for safety and efficacy, depending on the level of risk and the claims made about the product. Sponsors of therapeutic goods must possess the relevant level of evidence to support claims made on packaging and in advertising. The legislation also provides a procedure for approving advertisements of certain therapeutic goods.

Other consumer goods that require registration include chemical products that kill pests, such as herbicides and pesticides, fertilisers, and certain pool chemicals. Anyone wishing to supply such products must apply through the Australian Pesticides and Veterinary Medicines Authority. There are also standards for the labelling of these products.

Food

Australia’s states and territories have food legislation to regulate the composition, packaging, advertising and labelling of food and the hygiene of food premises and equipment.

The Australia New Zealand Food Standards Code (the Code), which prescribes labelling requirements for all food, has been adopted by all states and territories. Some statements are prohibited, while others – such as health and nutrition claims – are regulated and may only be used in specific circumstances. These restrictions are becoming increasingly tight due to relatively frequent changes to the Code.

A general prohibition also applies to the addition of substances to food, such as additives, vitamins and minerals, and certain botanicals, unless specifically permitted. The Code also sets out prescribed standards for particular foods. For example, novel and genetically modified food must undergo rigorous safety assessments before it can be made available for sale.

Trade measurement

State- and territory-based trade measurement legislation also imposes certain labelling requirements (currently being harmonised) for packaged foods and other packaged consumer products. The requirements of the legislation apply to all goods packed and imported for sale in Australia, unless specifically exempted from the marking requirements. The legislation also includes offences in relation to the short measure of packaged goods.

Advertising claims

The ACL contains a general prohibition on misleading or deceptive conduct in trade or commerce. It also prohibits certain false representations: for example, that goods are of a particular standard, quality, value, grade, composition, style or model, or have a particular history or previous use.

Labelling and advertising claims on products are susceptible to challenge under these provisions and must be capable of substantiation. Australian regulators also have the power to issue notices requiring evidence for claims and infringement notice penalties. In assessing whether claims are misleading, courts will consider whether the express and implied representations are correct and whether the overall impression is accurate.

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