Proposed change to seafood labelling a big problem for small businesses

- April 18, 2023 3 MIN READ
takeaway fish and chips in newspaper


A proposal to impose mandatory country-of-origin labelling rules for seafood would be a compliance nightmare for small businesses, writes Australian Small Business and Family Enterprise Ombudsman, Bruce Billson.

Like many Australians, our family enjoyed delicious Australian seafood for Easter. We are fortunate, wherever we live in this country, to have so many options – whether it is buying prawns to take home to cook on the barbie or ordering fish to eat in a restaurant or café.

But just as we rely on this abundance of seafood, we also rely on small and family businesses being open over the Easter period for our convenience and enjoyment.

Many hospitality businesses take pride in using local seafood and they promote this to enhance their competitiveness.

However, a proposal to impose a blanket requirement to have mandatory country-of-origin labelling rules for seafood would be a compliance nightmare for small businesses. The federal Department of Industry, Science and Resources is consulting on the proposed model.

Another regulatory burden for small business

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.

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.

Country-of-origin labelling for seafood in hospitality should be simple, useful and proportionate to the seller’s offering.

We think the entire scheme should be reconsidered given its high compliance costs; or failing that, to require only voluntary reporting where the seafood is a minor ingredient or a small proportion of the value of the offering.

seafood fish market

Under the current proposal, any seafood used in a dish will need to be listed on a menu as Australian, imported, or mixed. The proposal excludes ‘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.

For example, last week, I attended a farewell lunch for a wonderful colleague at a Thai restaurant. The owner puts his energy and focus towards delivering terrific meals that delight customers. He is busy running his business and had no idea about the changes being contemplated that will have a substantial compliance burden on his business.

Sometimes Australian seafood is sold out or not available, yet a small business may decide it does not want to disappoint customers so will temporarily source an imported product. Under the proposed changes, this will require the costly step of reprinting new menus for every change.

In other cases, small businesses may be unable to verify country-of-origin information from suppliers. They cannot reasonably be expected to investigate external supply chains to ensure the authenticity of a supplier’s claims about its products.

If the labelling requirement is enforced, we believe there must be an additional category of ‘variable’ which could be used on menus in cases where there could be frequent change.

This step would remove the excessive cost of reprinting menus and avoid inadvertently attributing an incorrect or misleading country-of-origin label.

Of course, there is nothing to stop a business highlighting the country-of-origin of their seafood, but imposing such a costly and cumbersome compliance burden is not a sensible approach.

This article was first published on Kochie’s Business Builders, read the original here.

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