Voluntary Report - public distribution

**Date:** 10/28/2004

**GAIN Report Number:** AS4035

AS4035

**Australia**

**Organic Products**

**Market Brief**

**2004**

**Approved by:**

![](media/image1.wmf)Andrew C. Burst

U.S. Embassy

**Prepared by:**

Australian Centre for Retail Studies

**Report Highlights:**

The organic food industry in Australia is growing at a relatively rapid
rate with no sign of slowing. The value of Australia's organic
production increased ten-fold between 1990 and 2000 and reports of
double-digit growth are currently forecast. While the level of
production is growing, a significant amount of product is imported to
meet rising demand. Opportunities for U.S. exporters to bring organic
processed or dried products into Australia are significant. The
Australian organic retail market is forecast to grow by 20 to 25 percent
annually, while domestic production growth is forecast at 10 to 15
percent a year. This creates an opportunity for U.S. and other
exporters. At present, the Australian organic market is valued at an
estimated A\$250 million.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Canberra \[AS1\]

\[AS\]

This report was drafted by:

Australian Centre for Retail Studies

Monash University

Melbourne, Australia

<http://www.buseco.monash.edu.au/centres/acrs>

![](media/image2.png){width="3.4791666666666665in" height="3.75in"}

Table of Contents

[SECTION I: SUMMARY 4](#section-i-summary)

[The Australian Organic Food Industry
4](#the-australian-organic-food-industry)

[SECTION II: CONSUMPTION AND MARKET SECTORS
7](#section-ii-consumption-and-market-sectors)

[Consumption 7](#consumption)

[Market Sectors 9](#market-sectors)

[Retail Foods 9](#retail-foods)

[Food Service 13](#food-service)

[SECTION III: REGULATIONS AND POLICY
14](#section-iii-regulations-and-policy)

[Australia Quarantine Inspection Service
14](#australia-quarantine-inspection-service)

[Certification 14](#certification)

[Labeling 15](#labeling)

[Customs and Tariffs 16](#customs-and-tariffs)

[GST 17](#gst)

[SECTION IV: PROMOTIONAL ACTIVITIES
18](#section-iv-promotional-activities)

[Trade Shows & Conferences 18](#trade-shows-conferences)

[SECTION V: POST CONTACT AND FURTHER INFORMATION
19](#section-v-post-contact-and-further-information)

[Post Contact (FAS/USDA) 19](#post-contact-fasusda)

[Regulations and Policy 19](#regulations-and-policy)

[Importers & Distributors of U.S. Organic Products in Australia
19](#importers-distributors-of-u.s.-organic-products-in-australia)

[Australian Organic Certifying Bodies
19](#australian-organic-certifying-bodies)

[Industry Information 21](#industry-information)

# SECTION I: SUMMARY

Australia comprises a land area of about three million square miles, and
has a population of around 20 million. The area of Australia is almost
equivalent to that of the 48 contiguous states of the United States,
about 50 percent larger than Europe (excluding the former USSR) and 32
times greater than the United Kingdom.

Most Australians live near the ocean along the eastern side of the
country. The most populated cities are Sydney in the state of New South
Wales, and Melbourne in the state of Victoria. The population of the
state of Queensland is increasing at a rapid rate, quickly becoming
another major destination for businesses and residents.

**Table 1: Demographic & Economic Indicators**

+------------------------------------------------+---------------------+
| **Population (millions)**                      | 20.0                |
|                                                |                     |
| **By State**                                   | 7.0                 |
|                                                |                     |
| New South Wales                                | 5.0                 |
|                                                |                     |
| Victoria                                       | 4.0                 |
|                                                |                     |
| Queensland                                     | 2.0                 |
|                                                |                     |
| South Australia                                | 2.0                 |
|                                                |                     |
| Western Australia                              | 0.4                 |
|                                                |                     |
| Tasmania                                       | 0.2                 |
|                                                |                     |
| Northern Territory                             | 0.3                 |
|                                                |                     |
| Australian Capital Territory                   |                     |
+------------------------------------------------+---------------------+
| **Consumer Food Imports From all Countries**   | \$2,294             |
|                                                |                     |
| Value (US\$mil)                                | 10%                 |
|                                                |                     |
| U.S. Market Share                              |                     |
+------------------------------------------------+---------------------+
| **Per Capita GDP** (US\$, 2003)                | \$25,353            |
+------------------------------------------------+---------------------+
| **Per Capita Food Expenditure** (US\$, 2003)   | \$1,674             |
+------------------------------------------------+---------------------+
| **Exchange Rate** (October 26, 2004)           | US\$1.00 = A\$1.33  |
+------------------------------------------------+---------------------+

## The Australian Organic Food Industry

The organic food industry in Australia is growing at a relatively rapid
rate with no sign of slowing. In Australia, the value of organic
production increased ten-fold between 1990 and 2000[^1] and reports of
double-digit growth are currently forecast. The number of Australian
farmers registering for organic certification has risen by 10 percent
each year for the past four years, while average production volume has
increased by 15 to 30 percent annually. There are an estimated 2,100
farms that are organic registered, indicating that 1.5 percent of all
farmers are certified organic growers. There are approximately
1,700-2,000 other specialist businesses, including wholesalers,
processors, retailers and exporters, participating in the Australian
organic industry. The land area certified organic or biodynamic in
Australia now covers 18.5 million acres (about 7.5 million hectares).

The Australian organic market is estimated at A\$250 million according
to the Biological Farmers Association of Australia. Approximately A\$40
million in organic products are exported from Australia to other
nations. Ultimate consumption of organic products is estimated at about
0.3% of the current A\$72 billion Australian domestic market for food
products.[^2]

Coles, one of Australia's two largest supermarket chains, was the first
chain to introduce their own range of certified organic products, which
includes juice, milk, oats, pasta, biscuits, soup and yogurt. There are
now over 150 organic items sold in 686 Coles supermarkets nationally.
Woolworths, the other leading chain, also stocks a wide range of organic
items on their shelves.

While the level of organic production is growing in Australia, a
significant amount of product is imported to meet demand. Primary
imports include juice, pasta, grains, rice, sauces, jams, and syrups.
Australian certifying and government bodies are encouraging consumers to
purchase certified organic products.

The main challenge for U.S. exporters wanting to enter the Australian
organic market is regulations surrounding the quarantine of fresh
produce. Fresh produce, regardless of whether it is organic or
non-organic, is fumigated or otherwise treated to protect Australia
against incoming insects or other pests and diseases. These treatment
requirements may disqualify imports for organic certification. However,
the opportunities for U.S. exporters to bring organic processed or dried
products into Australia are increasing. A recent survey by the
Australian Consumers' Association found that 14 of the 25 processed
foods in a basket of supermarket goods had an organic equivalent.

Currently, the use of the term organic is not subject to certification
requirements in the domestic market. However, the widespread use of
'organic' for uncertified products has created customer confusion.
Organic industry bodies are raising consumer awareness by publicizing
the requirements for organic certification and are encouraging retailers
to only use certified products. It is therefore recommended that U.S.
exporters have their organic products certified so that they are not
disadvantaged when entering this market.

+------------------------------------+---------------------------------+
| **Advantages**                     | **Challenges**                  |
+------------------------------------+---------------------------------+
| Consumers are concerned about      | > Many organic consumers value  |
| chemicals and additives in food.   | > local food production and     |
| Many recognize that organic foods  | > distribution systems that     |
| offer a better health              | > supply minimally processed    |
| alternative.[^3]                   | > and packaged foods.           |
+------------------------------------+---------------------------------+
| U.S. companies are reliable        | > Australian organic producers  |
| suppliers of high quality,         | > have the capability of        |
| innovative organic products.       | > expanding due to the          |
|                                    | > availability of suitable      |
|                                    | > land. Over 250 farms are      |
|                                    | > converting to biodynamic      |
|                                    | > practices each year.          |
+------------------------------------+---------------------------------+
| A study by Agriculture Western     | Fresh organic produce faces the |
| Australia indicated wine, wheat,   | same quarantine regulations as  |
| sugar and canola as having         | non-organic. This means that    |
| excellent opportunities in the     | many products would have to     |
| organic market. Other              | undergo mandatory treatments    |
| opportunities include: herbs,      | that could mean that they would |
| oats, rice and safflower.          | no longer meet organic          |
|                                    | certification standards.        |
+------------------------------------+---------------------------------+
| Opportunities have also been       | There is a consensus amongst    |
| identified for baby foods and      | consumers that organic food     |
| semi-processed inputs.             | products are more expensive     |
|                                    | than non-organic foods, making  |
|                                    | them less accessible for some   |
|                                    | families.[^4]                   |
+------------------------------------+---------------------------------+
| At present, there are no laws      | The Rural Industry Research     |
| regarding labeling requirements    | Development Corporation has a   |
| for organic foods in the           | five year Organic Produce       |
| Australian domestic market.        | Research Plan, dedicated to     |
|                                    | assist traditional farmers      |
|                                    | develop a viable organic        |
|                                    | industry through increasing     |
|                                    | adoption of sustainable organic |
|                                    | farming systems.                |
+------------------------------------+---------------------------------+
| Organic associations in Australia  |                                 |
| are increasing customer awareness  |                                 |
| regarding organic certification,   |                                 |
| which has built consumer demand    |                                 |
| for more organic certified         |                                 |
| products. If U.S. products are     |                                 |
| certified by one of the four       |                                 |
| approved U.S. organic certifying   |                                 |
| bodies, certification in Australia |                                 |
| should not be difficult.           |                                 |
+------------------------------------+---------------------------------+
| With the planned implementation of |                                 |
| the Australia-U.S. Free Trade      |                                 |
| Agreement, any tariffs currently   |                                 |
| imposed on U.S. food products      |                                 |
| would drop to zero.                |                                 |
+------------------------------------+---------------------------------+

# SECTION II: CONSUMPTION AND MARKET SECTORS

## Consumption

The Organic Food and Farming report, released by Biological Farmers of
Australia in 2003, revealed that while demand for organic foods grew
20-30 percent in 2002/2003, domestic production only increased 10-15
percent. Increased consumer demand is being fuelled by the improved
availability of organic food in the marketplace.

Consumption of organic products currently accounts for only 0.3 percent
of the Australian domestic food market. Australian consumers rationalize
their switch to organic consumption as a health choice and because of
concerns for the environment. While stating this, Australians do not
concern themselves as much with the quality of their traditional food,
as they do not face the same food quality issues that consumers in some
other countries face.

A 2001 study of 1,200 Australian consumers[^5] explored the ways in
which they perceived organic food. Over 40 percent of respondents to the
survey claimed to have consumed at least some organic foods over the
preceding 12 months[^6]. As indicated in Figure 1, only a small
proportion of these people ate more than a little organic food. However,
with 59 percent of people eating small amounts of organic food, the
survey found that understanding the motivations of this group is of
potentially great importance in charting the future of the organic
industry.

**Figure 1: Over the last year, what proportion of food you ate was
certified**

**organic?**[^7]

![](media/image3.wmf)

The survey also examined the motivations behind consumers' choice of
organic food. The respondents were asked to rate the importance of
factors believed to motivate food choice, with 1 as not at all
important, to 5 as extremely important. The results were also
differentiated between organic and non-organic users.

**Figure 2: Motivating factors behind food choice**[^8]

![](media/image4.wmf)

Figure 2 indicates there are no differences between these two groups of
consumers in areas such as convenience, sensory appeal, price, and
familiarity and religion factors. For those factors for which
differences were evident, it is notable that a similar trend was found
between organic and non-organic consumers in terms of the relative
importance of each of these factors. Natural content and animal welfare
rate highest for both groups, followed by environmental protection and
weight control. Organic consumers, however, did appear more motivated by
each individual factor and may, on this basis, be more likely to
prioritize these concerns over those such as price and convenience.

When the same factors were examined in relation to the level of organic
consumption, increasing interest in weight control and fitness were
shown not to have a significant correlation with increasing levels of
organic consumption.

Australian consumers' attitudes to food-related issues are also likely
to influence food consumption. Specific dimensions of these food-related
issues include:

-   Risks from industrialized foods---chemical residues, genetically
    modified organisms, irradiation, artificial ingredients,
    antibiotics.

-   Healthiness of organic foods---lower residues, safer, healthier to
    eat.

-   Quality of organic food---taste, shelf life, appearance.

-   Concern over biotechnology---going too far, against laws of nature,
    risky, labeling requirements, incompatible with organics.

-   Buy more organic food if it was available---if it could be found, if
    it was available as convenience, packaged and pre-prepared food.

**Figure 3: Attributes to food-related issues**[^9]

![](media/image5.wmf)

As with the motivating factors behind food choice, levels of concern
over food-related issues follow similar patters for organic and
non-organic consumers but with organic consumers expressing stronger
levels of concern for each individual issue. Increasing concern was also
correlated with increasing organic consumption (albeit weakly).

From the survey, the relatively small increases in motivation towards
the factors and issues identified above may be sufficient to
dramatically increase organic consumption at the national level. Given
the small number of people who consume more than a little organic food,
this may be exactly the process responsible for the significant
increases in demand the industry is currently experiencing.

Australia is very different to many other parts of the world.
Australians do not share the same concerns about the quality of their
food and water in the way some consumers do. They believe their produce
is "clean and green" and food scares have not made them think
otherwise.[^10]

## Market Sectors

### Retail Foods

The Australian organic retail market is forecast to grow by 20 to 25
percent annually, while domestic production growth is forecast at 10 to
15 percent a year. This creates an opportunity for U.S. and other
exporters. At present, the Australian organic market is estimated to be
valued at A\$250 million.

Organics may now be a relatively small niche in food commodity markets
and agricultural enterprises, but consumers are demanding more safe
foods, sustainable production and a sense of control over their food
supply. This is particularly true for affluent and educated consumers.

**[Market Entry]{.underline}**

It is highly recommended that organic foodstuffs be certified by either
an Australian or international accredited body (accepted by Australia)
due to the enhanced awareness and demand by Australian consumers for
certified products.

The most typical form of entry into Australia for U.S. exporters is to
work with an agent or existing distributor of organic foodstuffs.
Australian organic distributors currently assisting U.S. exporters
include Kadac Pty Ltd, Nature's Fare, Complete Health Products and
Spiral Foods. These companies can act as wholesalers and distributors of
products to the retail and foodservice sectors. Further information is
given in regards to contacts in Section V.

**[Distribution]{.underline}**

Other distribution options exist for U.S. exporters. Typical
distribution options for organic products are:

-   Direct sales to individual consumers, or groups of consumers via
    pick ups from farms, or the Internet;

-   Direct agreement with specialized retailer or restaurant;

-   Selling through groups or cooperatives;

-   Sell to certified processors;

-   Engage processor for contract/service processing, and market product
    yourself.

Supply chain management or building relationships with suppliers is
vital to the organic industry as it ensures the integrity of all inputs,
transport and handling, processing and final product. Supply chains, or
other types of networks, also assist in information sharing and problem
solving, and can be both vertical and horizontal. There are a number of
existing alliances in the organic industry that have been very
successful at producing and marketing their products on a product or
regional basis. The main retail channels for distributing organic
products for retail sale include: supermarkets, health food stores,
specialist organic food stores and markets.

The two main supermarket retailers in Australia are Woolworths and Coles
Myer. Woolworths has the largest market share in the supermarket sector,
estimated at 42 percent. Coles Myer has two supermarket brands, Coles
and Bi-Lo, and together their share of the market is approximately 30
percent. Foodland Associated Limited (FAL), Aldi and independent grocers
fill the remainder of the supermarket share.

Coles, one of Australia's largest supermarket chains, was the first to
introduce their own range of Certified Organic Products, which includes
juice, milk, oats, pasta, biscuits, soup and yogurt. There are now over
150 organic items sold in 686 Coles Supermarkets nationally, which
include Coles' products as well as other branded products. Woolworth\'s,
Australia\'s largest chain, has been carrying biodynamic milk in
selected stores for several years and has added organics to the fresh
produce department. Woolworths is also stocking a number of organic 'dry
goods' lines, including flour, grains and pasta. Generally, the
supermarkets have been responding to consumer demand rather than
proactively promoting organics, in part due to problems obtaining
consistent supply at the national level. Currently, demand for organic
products exceeds domestic production and imports such as juice, cereals,
polenta, olive oil, and baby food are filling the gap. There is
substantial room in the Australian market for U.S. exporters to supply
organic products, especially processed products.

The growing interest in organic foods is also gathering momentum in the
"weekly market" or "farmers market" sector. For example, Vibrant
Markets, located in Sydney's northern suburb of Balgowlah, is
Australia's first certified organic market. Started in May 2004, the
market only sells certified organic produce.

Paddy's Organic Market, also in Sydney, requires stallholders to sell
only products certified by one of Australia's primary accredited
certification bodies -- ACO, Demeter, NASA, OHGA, OFC, or TOP. There are
more than 500 products on sale in this market[^11]. The organic fair in
Northey Street, Brisbane attracts growers from northern New South Wales,
the Lockyer Valley, the Granite Belt and the Sunshine Coast. Several
other markets around the country also feature organic produce and
foodstuffs.

**[Product Range]{.underline}**

For U.S. exporters, the product range is mostly restricted to processed
and dry organic foods due to mandatory fumigation on fresh produce.
However, the range of organic processed food items is increasing in
supermarkets and health stores. Coles Supermarkets and Woolworths now
place their organic products next to non-organic alternatives, instead
of positioning them in the health food section. The Australian Consumers
Association conducted a survey in 2004 and found 14 of the 25 processed
foods selected for their supermarket basket had an organic
equivalent[^12]. Foods ranged from chocolate to pasta to jam conserve.
Table 2 displays the organic and non-organic alternatives.

**Table 2: Organic vs Non-Organic processed food (in order of price
difference)**[^13]

  -------------- ---------- --------- -------------- ---------- --------- --------------
  **Processed    **Size**   **Price   **Organic      **Size**   **Price   **Price
  food from the             (A\$)**   equivalent**              (A\$)**   difference**
  CHOICE                                                                  
  shopping                                                                
  basket**                                                                

                                                                          **(per
                                                                          100g/100 mL,
                                                                          \$)**

  LINDT          100 g      3.00      GREEN &        100 g      6.10      3.10
  Excellence                          BLACK'S Milk                        
  Milk Chocolate                      Chocolate                           

  LIPTON Black   50 bags    2.70      NATURE'S CUPPA 50 bags    4.95      2.25
  Tea Teabags                         English                             
                                      Breakfast Tea                       

  HEINZ Baked    420 g      1.35      WHOLE EARTH    420 g      3.80      0.58
  Beans English                       Baked Beans in                      
  Recipe                              Tomato Sauce                        

  SCHWEPPES      250 mL     1.00      SANTA CRUZ     355 mL     3.00      0.45
  Lemonade (can)                      Lemonade (can)                      

  DOLMIO Chunky  370 g      2.10      SPIRAL FOODS   375 g      3.70      0.42
  Bolognese                           Pasta Sauce                         
  Pasta Sauce                         Funghi                              

  SUNRICE        1 kg       2.00      SUNRICE        750 g      3.30      0.24
  Premium Long                        Organic White                       
  Grain Rice                          Long Grain                          

  JUST JUICE     1 L        1.55      PUREHARVEST    1 L        3.70      0.22
  100% Apple                          100% Apple                          
  Juice                               Juice                               

  DAIRY FARMERS  1 L        1.55      PARMALAT Pure  1 L        2.10      0.06
  Full Cream                          Milk                                
  Milk                                                                    

  CSR Raw Sugar  1 kg       1.50      KRIEDEMANN     1 kg       2.00      0.05
                                      FARMS Raw                           
                                      Sugar                               

  JALNA Fat Free 500 g      2.80      JALNA Fat Free 500 g      3.00      0.04
  Natural Yogurt                      BioDynamic                          
                                      Yogurt                              

  SAN REMO       500 g      2.00      SAN REMO       500 g      2.20      0.04
  Spaghetti                           Organic                             
                                      Spaghetti                           

  UNCLE TOBYS    750 g      3.65      UNCLE TOBYS    750 g      3.80      0.02
  VitaBrits                           VitaBrits                           
                                      Organic                             

  COTTEE'S       250 g      2.50      COTTEE'S BE    250 g      2.50      0.00
  Strawberry                          ORGANIC                             
  Conserve                            Strawberry                          
                                      Conserve                            

  SUNRICE Rice   144 g      1.65      PUREHARVEST    150 g      1.65      0.00
  Cakes                               Rice Cakes                          
  -------------- ---------- --------- -------------- ---------- --------- --------------

The Australian organic market is relatively underdeveloped in terms of
value-added products. Processed products that can combine the attributes
of innovation, taste, health, and convenience will have stronger
opportunities.[^14] In particular, opportunities have been identified
for baby foods and semi-processed inputs for manufactured products.
Soups, yogurts and table spreads with convenient packaging options, and
which incorporate organic ingredients such as sunflower and flaxseed
oils to give Omega 3 nutrients are proving to be popular. Another
opportunity identified has been developing organic products for the
nutritious snacks market, worth A\$395 million through supermarkets
alone.[^15] Value-adding services such as after-purchase services could
also be further utilized to build customer awareness and loyalty.

The growing interest in juice and juice bars in Australia has heightened
interest in organic juices. Australian and international producers are
introducing organic juices into this category more frequently than in
past years.

Another area of potential growth is in the non-dairy alternatives
category. With the interest in soybean drinks increasing, an organic
alternative could be desirable. The non-dairy alternatives category
currently penetrates roughly 15 percent of the total food and beverage
market in consumption terms.[^16]

**[Pricing]{.underline}**

Price is a major concern consumers have in switching to organic food
products in Australia. A recent research study[^17] identified that many
consumers wanted to purchase more organic food products, but were
deterred by the price. Shoppers will pay up to 20 percent more, but over
this premium customers were found to drop off purchasing organic
products.[^18] Many multicultural groups in Australia stated in the
study that they would be more attracted to organic products if prices
were more comparable to non-organic products.

A survey by the Australian Consumers Association found processed organic
food in supermarkets cost an average of 65 percent more than
conventional products.[^19] Some organic products such as chocolate or
baked beans cost two to three times the amount of non-organic foods,
while other organic processed food products have little or no difference
in price (see Table 2). The average price of processed organic food has
declined recently and is likely to drop further to attract more
customers.

**[Import Reliance]{.underline}**

There is no reliable data available to gauge the percentage of the
organic food market that is derived from imports. Australia still relies
on a number of imported products to satisfy the needs of consumers.
Reasons for this include the three-year process it takes for a local
producer to certify themselves as an Australian organic grower and
economies of scale in the processed food sector.

Due to the smaller size of the Australian market, local manufacturers
struggle to achieve economies of scale in more unique products, such as
maple and other syrups, herbal remedies, pet foods, specific sauces and
health supplements.

One organic retailer attributed over 30 percent of in-store stock to be
imported from a variety of countries including the United States, Italy,
Japan and Switzerland. Imported products stocked at this store included:
pasta, noodles, sauces, jams, syrups, grains, seeds and health
supplements.

However, Australian retailers are under pressure from domestic
producers, wholesalers and certified bodies to buy locally sourced
products. The Rural Industry Research Development Corporation (RIRDC)
has implemented a five-year plan to promote and develop local organic
products. RIRDC's focus is on fresh produce, however, and this is an
area that U.S. exporters are unable to fully compete due to mandatory
fumigation. U.S. organic products at present can still compete
effectively in the 'dry goods' area of the market.

### Food Service

The presence of organic food restaurants in Australia is on the
increase. While growth is not as strong as the retail sector, many
vegetarian and natural food restaurants and cafes are offering organic
options, with some restaurants serving 100 percent organic dishes.

-   Organic Wholefoods, which started as a retail store in Melbourne in
    1990 now has two large stores, one in Brunswick complete with cafe
    and dance studio, the other in Fitzroy. A new store has recently
    been opened in the rural retreat of Daylesford.

-   Iku, established in the inner Sydney suburb of Glebe in the 1980s as
    one of Australia\'s first macrobiotic restaurants, has now expanded
    to six outlets and the owner reports a growing number of enquiries
    to franchise the concept.

-   Australia's first licensed certified organic café opened in Sydney's
    Surrey Hills in June 2004[^20]. Named Fringe Café, the menu is
    entirely organic. Most of the café's food is Australian, sourced
    from a variety of farmers and wine growers who identify a growing
    interest in organic foods as consumers become increasingly health
    conscious and environmentally aware.

-   South Australia has a number of organic cafes that incorporate
    organic retail into their outlets.[^21] Most of these cafes are
    situated in the CBD and inner suburbs.

# SECTION III: REGULATIONS AND POLICY

In addition to the information provided below, detailed guidance on
Australian food regulations is available in the Food and Agriculture
Import Regulations & Standards (FAIRS) report for Australia. This report
(number AS4023) is available for download at:
<http://www.fas.usda.gov/scriptsw/attacherep/default.asp>.

The Retail Sector Report (AS3050), Food Processing Sector Report
(AS4008) and the Exporter Guide (AS4027) may also assist with
understanding the regulations and policies for Australia. These reports
can also be accessed through the above Internet site.

## Australia Quarantine Inspection Service

The Australian Quarantine Inspection Service (AQIS) has legal
jurisdiction in relation to imported foods under the Imported Foods
Control Act. AQIS facilitates the development of quarantine conditions
applicable to any food import from any country. Any food imported into
Australia must first comply with quarantine requirements and then with
Australia's food safety requirements.

Quarantine import permits must be obtained for organic food products as
they would be for conventional products. Prior to importation, an
application to Import Quarantine Material must be lodged at either an
AQIS Regional Office or the Central Office in Canberra. Each import
permit application incurs an A\$80.00 application fee. For rapid
clearance, a copy of the permit should accompany the goods, either with
the person carrying the goods or in an envelope on the side of the
package. Goods will be released if all the conditions on the permit have
been met. Goods that are not accompanied by a permit will be held by
AQIS until presentation of a valid permit.

## Certification

Australian regulations and standards are quite advanced compared to
other countries in relation to organic food products. Australia has had
national standards for organic and biodynamic products in place since
1992, and is one of six countries on the third country list able to
export into the European Union as an approved organic producer.
Australian producers wishing to export organic products to other nations
must have organic certification from one of the AQIS approved certifying
bodies.

The term organic is not subject to the same certification requirements
in the domestic market. Domestic products and imports are able to use
the term 'organic' without certification from a certifying body.
However, the widespread use of the term for uncertified products has
created customer confusion.[^22]

The Biological Farmers of Australia (BFA), in conjunction with other
Australian certifying bodies, are raising consumer awareness by
publicizing the requirements for organic certification. The Organic
Standard is a document that producers, processors, wholesalers and
retailers should refer to if they wish to trade in certified organic and
biodynamic products. The Organic Standard sets out certification
requirements for a range of products and discusses the regulations
regarding the marketing and handling of organic food. Australian cooking
celebrities have supported the Organic Standard and are assisting with
promoting the certification process. A copy of the standard and
information on how to get your products certified organic in Australia
is available on the Biological Farmers of Australia web site at:
<http://www.bfa.com.au/Pages/publications_standard.htm>.

Representatives from the Australian organic wholesale and retail trade
note that certification is a key influence on consumers' purchase
decisions. Many retailers prefer to stock only certified products.
Therefore, it is highly recommended that prior to entering the
Australian market, U.S. suppliers should certify their products through
Australian Certified Organic/Biological Farmers of Australia
(<http://www.australianorganic.com.au/>), and/or International Organic
Standard, administered by Quality Assurance International and IFOAM.
Currently there are four U.S. organic organizations that have
equivalency in Australia (California Certified Organic Farmers,
International Certification Services Inc., Organic Crop Improvement
Association International, and Quality Assurance International). Links
to these organizations are available through the Australian Certified
Organic web site listed above.

U.S. exporters wishing to market organic products in Australia are
advised to ensure that they have certification and follow the guidelines
established in the Australian organic standard. The following are the
main guidelines from the standard.[^23]

-   Importers intending to market certified organic products shall be
    certified by Australian Certified Organic or an equivalent
    certification organization approved by the Certification Office,
    headquarters of Australian Certified Organic.

-   Importers and others utilizing certified produce other than solely
    Australian Certified Organic certified produce shall maintain a
    register of all accredited certification agencies represented and
    certifying produce used as inputs or ingredients. Such a register
    shall be annually updated and shall conform exactly to the register
    maintained and monitored by the Certification Office. Such
    "certification transference" arrangements are assessed on a
    case-by-case basis -- with the exclusion of certification systems
    known to deviate unacceptably from this Standard. Onus is on the
    operator to ensure that all use of non-Australian Certified Organic
    certified materials conform to this requirement.

-   Importers shall also remain aware of requirements and regulations
    for the importation of goods and ensure that all such requirements
    do not affect the certified status of the imported products. For
    example, fresh products may require treatments (chemical &
    otherwise) that would cause them to no longer meet 'organic'
    specifications.

A list of Australian organic certifying bodies is supplied in Section V.

## Labeling

Importers must abide by Australian labeling requirements for packaged
food. [Food Standards Australia New
Zealand](http://www.foodstandards.gov.au/) (FSANZ) administers the Food
Standards Code, which is adopted by all Australian States and
Territories into their food legislation. The following basic guidelines
are provided to importers of packaged food in relation to labeling
requirements. The label must:

-   Show a food name or appropriate designation.

-   Show the name and address of the person associated with the sale of
    the food in Australia on the label for recall purposes. For imported
    products intended for the food service sector (i.e. non-retail
    packs), the name and address of the importer must appear on the
    package offered for sale by the importer. This may appear on the
    outer packaging that contains a number of inner packs. If the
    importer has knowledge of, or becomes aware that subsequent buyers
    are offering the inner packs at retail level, documentation must be
    available to trace the goods back to the importer.

-   Show the name of the country in which the food was made or produced.
    If the address of the manufacturer includes the name of the country
    then no additional country of origin labeling is required.

-   Show 'lot' identification. A 'lot' is a quantity of food prepared
    under the same general conditions, from a particular packing or
    preparation unit, during a particular period (normally less than 24
    hours). 'Use-by' or packing dates may satisfy this requirement. The
    lot identification may be marks or codes devised by the
    manufacturer. There are no prescriptions for type size or color
    contrast.

-   Show date indicating minimum durable life for packaged foods
    manufactured or produced in or imported into Australia that have a
    durable life of less than two years.

-   Conditions of storage, if special storage conditions are required to
    ensure that the minimum durable life or use-by date of the food is
    accurately stated.

-   Show the net weight of the food within the package. Shippers or
    outer cartons must show the net weight of individual packages as
    well as a count of packages within the shipper or outer carton.

-   State the ingredients of most foods on the label. An ingredient list
    must name the ingredients of the food in descending order based on
    the in-going proportion by weight. If water is an ingredient it may
    either be declared in its appropriate place in the list or be
    declared last as 'water added'.

-   Have all required words, statements or expressions written in
    English; be clear, easily read and permanent; easily seen by a
    person reading the label; and in a color of contrast to the
    background.

-   Show a nutrition panel, where a nutrition claim is made on the
    label.

Australian food law does not permit the use of health or therapeutic
claims on food labels or in advertising. Rather than reject foods for
import entry, AQIS will allow corrective action to labels to be taken
for significant breaches. Minor defects will generally be cleared on an
undertaking from the importer that the problem will be fixed. However,
repeated failures could result in a Holding Order being issued against
the offending supplier.

Full details of labeling requirements are set out in the Food Standards
Code (Standard A1), and can be obtained through the Food Standards
Australia New Zealand website,
[http://www.foodstandards.gov.au](http://www.foodstandards.gov.au/) and
guidance is available in the reports listed at the beginning of this
Section.

## Customs and Tariffs

All imported goods entering Australia must be cleared by Customs. A
customs import entry must be lodged for goods above the following
values:

-   Postal: A\$1000 per consignment

-   Non-postal: A\$250 per consignment.

There is no requirement for companies or individuals to hold an import
licence. However, importers may need to obtain permits to facilitate
clearance of organic food products. The minimum amount of documentation
required for Customs clearance comprises of a completed Customs Entry
Document, an airway bill (AWB) or bill of lading (BLAD), as well as
invoices and other documentation related to importing.

The Australian Customs Service application COMPILE is the means through
which brokers and/or importers lodge entries for commercial imported
goods (greater than A\$250 in value).

When a Customs entry triggers an AQIS profile, the broker or agent will
receive a notice or message indicating that the consignment has been
impeded for quarantine and that lodgment of a JEMS entry is required.
Where a broker or importer has a consignment that has been impeded by
AQIS they will be required to lodge a Quarantine Entry (QE) via the JEMS
system in COMPILE. The COMPILE /JEMS system allows brokers to pay the QE
and other AQIS service fees associated with the entry via Electronic
Funds Transfer (EFT). Brokers have the ability to pay multiple &
variable amounts (import clearance requirements).[^24]

Tariffs on food products entering Australia currently range between 0-5
percent. Under the Australia-U.S. Free Trade Agreement, when
implemented, these tariffs will all drop to zero.

## GST

Australia imposes a goods and services tax on most retail items. There
are a few exemptions to the GST, the principal ones being certain
foodstuffs, such as fresh produce. GST is applied at 10 percent of the
value of the taxable importation (VoTI).[^25]

# SECTION IV: PROMOTIONAL ACTIVITIES

## Trade Shows & Conferences

A number of trade shows and conferences for networking and promotional
activities exist in Australia. While many are Australia-specific, the
following activities may assist in promoting U.S. organic products.

-   [Fine Food]{.underline} is the largest food industry event in
    Australia. In 2004, over 700 exhibitors showcased their latest food,
    drink and equipment ideas from around the world. International
    organic products were displayed at the event, including products
    from New Zealand, Italy, Japan and the United States. The venue for
    the event alternates each year between the cities of Sydney and
    Melbourne. In 2005 the show will be held in Sydney, September 12-15.
    The show is attended by major buyers, agents and importers from
    around Australia and elsewhere in the region, and is regarded as one
    of the best opportunities for importers to introduce product to the
    Australian market. Organic products are featured in the "Natural
    Products" area of the show. More information regarding Fine Food can
    be found at
    [http://www.foodaustralia.com.au](http://www.finefoodaustralia.com.au/).
    If you were considering participation in Fine Food, the Office of
    the Agricultural Counselor at the U.S. Embassy in Australia would be
    interested to hear from you. Please contact us at the address
    provided in Section V.

-   The International Federation of Organic Agricultural Movement will
    be holding the [15^th^ Organic World Congress]{.underline} in
    Adelaide, September 19-23, 2005. With the theme of 'Shaping
    Sustainable Systems', the conference will feature debate and
    discussion on the important role that organic systems play in
    ensuring long-term sustainability. In conjunction with the
    conference, an organic world exhibition will be held to showcase and
    promote organic relationships, products and systems. Information for
    the World Organic Exhibition is available through the NASAA website.
    <http://www.nasaa.com.au/ifoam/>.

-   The Rural Industries Research and Development Corporation assists in
    coordinating the [National Organic Conference]{.underline}. The last
    conference was held in 2003 in Adelaide and is to be held every two
    years at different locations around Australia. This event will draw
    interest from a range of institutions and will assist the definition
    of the broadening role of organic agriculture in sustainable
    development. It will bring together members of the organic,
    scientific, business and consumer communities to explore
    sustainability issues for development. The presence of leading
    international and Australian organic industry decision-makers in the
    past reflects the importance of this event. Further information on
    the upcoming National Organic Conference can be found through the
    RIRDC website: [http://www.rirdc.gov.au](http://www.rirdc.gov.au/).

-   The [First International Biodynamic Wine Forum]{.underline} will be
    held November 19-21, 2004 in Beechworth Victoria. The 3-day forum
    brings together the world\'s leading Biodynamic vignerons from
    Europe, Australia and the United States. Further information
    regarding this forum can be found at the website:
    [http://www.biodynamicwineforum.com.au](http://www.biodynamicwineforum.com.au/).

# SECTION V: POST CONTACT AND FURTHER INFORMATION

## Post Contact (FAS/USDA)

Agricultural Counselor

Office of Agricultural Affairs

U.S. Embassy

Moonah Place

Yarralumla ACT 2600

Australia

Tel: +61 2 6214 5834

Fax: +61 2 6273 4323

Email: <AgCanberra@usda.gov>

## Regulations and Policy

Import Clearance

Australian Quarantine and Inspection Service,

GPO Box 858,

Canberra, ACT 2601

Australia

Tel: +61-2-6272 3746

Fax: +61-2-6272 5888

Web: [http://www.aqis.gov.au](http://www.aqis.gov.au/)

Email: <importweb@aqis.gov.au>

Standards Liaison Officer

FSANZ

P.O. Box 7186

Canberra BC ACT 2610

Australia

Web: [http://www.foodstandards.gov.au](http://www.foodstandards.gov.au/)

## Importers & Distributors of U.S. Organic Products in Australia

Please contact the Office of the Agricultural Counselor listed above for
an up-to-date list of Australian importers and distributors.

## Australian Organic Certifying Bodies

Biological Farmers of Australia Co-operative Ltd

Head Office

P.O. Box 530

Chermside QLD 4032

Australia

Tel: +61 7 3350 5716

Fax: + 61 7 3350 5996

Email: <info@bfa.com.au>

Web: [http://www.bfa.com.au](http://www.bfa.com.au/)

Biodynamic Agriculture Australia (Demeter Label)

P.O. Box 54

Bellingen NSW 2454

Australia

> Tel: +61 2 6655 0566

Fax: +61 2 6655 0565

Email: <poss@midcoast.com.au>

The Organic Food Chain Pty Ltd

P.O. Box 2390

Toowoomba QLD 4350

Australia

Tel: +61 7 4637 2600

Fax: +61 7 4696 7689

Email: <ofc@organicfoodchain.com.au>

Web:
[http://www.organicfoodchain.com.au](http://www.organicfoodchain.com.au/)

National Association of Sustainable Agriculture Australia

P.O. Box 768

Stirling SA 5152

Australia

Tel: +61 8 8370 8455

Fax: +61 8 8370 8381

Email: <enquiries@nasaa.com.au>

Web: [www.nasaa.com.au](http://www.nasaa.com.au/)

Organic Growers of Australia Inc.

P.O. Box 6171

South Lismore NSW 2480

Australia

Tel: +61 2 6622 0100

Fax: +61 2 6622 0900

Email: <oga@nrg.com.au>

Tasmanian Organic-Dynamic Producers Co-operative

P.O. Box 434

Mowbray Heights TAS 7248

Australia

Tel: +61 3 6266 0330

Email: <ppdevries@bigpond.com>

Safe Food Queensland

P.O. Box 440

Spring Hill QLD 4004

Australia

Tel: +61 1800 300 815

Email: <info@safefood.qld.gov.au>

## Industry Information

Organic Federation of Australia

Suite 502, "Park Place"

3 Waverley Street

Bondi Junction NSW 2022

Australia

Tel: +61 2 9340 7808

Fax: +61 2 9340 7807

Email: <info@ofa.org.au>

Web: [http://www.ofa.org.au](http://www.ofa.org.au/)

The Organic Directory 2004/05

Heaven and Earth Systems

Tel: +61 2 9365 7668

Email: <catrionamac@optusnet.com.au>

-   Provides NSW contact details for organic farmers, processors,
    retailers, wholesalers and food specialists.

**Endnotes**

# 

[^1]: Lyons, K. (2001) "The culture and Politics of Organic Food: An
    Australian Perspective". *The Drawing Board: An Australian Review of
    Public Affairs*, 5 October.

[^2]: ABS (2004). "8751.0 -- Retail Trade -- March 2004".

[^3]: Weissenberg, P. and Migliorino, P. (2004) "We are what we eat",
    MuzInk Media and Events, Artarmon, Australia.

[^4]: Weissenberg. P. and Migliorino, P. (2004) Ibid., p.64.

[^5]: Lockie,S. Mummery, K., Lyons, K. Lawrence, G. (2001) "Who buys
    organics and who doesn't, and why? Insights from a national survey
    of Australian consumers?" Presented to the Inaugural National
    Organics Conference, Sydney, August 2001.

[^6]: Lockie et al., (2001) Ibid.

[^7]: Lockie et al., (2001), Ibid.

[^8]: Lockie et al. (2001), Ibid.

[^9]: Lockie et al. (2001), Ibid.

[^10]: Australian Organic Journal, Autumn 2003.

[^11]: Bennett, S. (2004). "Fresh Ideas", *The Daily Telegraph.* June
    30, p.50.

[^12]: Needham, K. (2004a) "Out of the health shops -- and on to the
    supermarket shelves." *Sydney Morning Herald*, 18 October. p.4.
    First Section.

[^13]: Australian Consumers Association (2004) "Organic goes
    mainstream", Choice Magazine, October 2004. Accessed from
    [http://www.choice.com.au](http://www.choice.com.au/) .

[^14]: Department of Primary Industries (2004) "Critical success factors
    for marketing organic food". Accessed from
    <http://www.dpi.qld.gov.au/business/1539.html> .

[^15]: Rudder, G. (2004) "Organics are on the brink of a boom" *Retail
    World*, August 16-27, p.30-31.

[^16]: Australian Organic Journal, Autumn 2003.

[^17]: Weissenberg, P. and Migliorino, P. (2004) "We are what we eat",
    MuzInk Media and Events, Artarmon, Australia

[^18]: Needham, K. (2004b) "Forget cheaper chicken, but other prices
    will fall". *Sydney Morning Herald*, 19 October, p.4, First section.

[^19]: Australian Consumers Association (2004), Ibid.

[^20]: Elliott, J. (2004) "First certified organic café opens".
    *Foodweek*, 4 June, 2004.

[^21]: Wood, P. (2004) "Organic Adelaide Healthy Eating." *The
    Advertiser*, 3 March. p.F04.

[^22]: Halpin, D. and Brueckner, M. (2004) "Australia and Oceania" in
    Willer H. and Yussefi, M. (eds) "The World of Organic Agriculture --
    statistics and emerging trends", IFOAM, Germany.

[^23]: Australian Certified Organic (2003) "National Organic Standard",
    Version 6, August 2003. Accessed from
    <http://www.bfa.com.au/Downloads/Documents/Organic_Standard_Version6_REVISIONS.pdf>

[^24]: http://www.affa.gov.au/content/publications.cfm?ObjectID=E989B4FD-CBFC-48AE-A898D59136795AEB

[^25]: Australian Customs Office (2004) "Customs Guide to Importing and
    Exporting". Accessed from
    [www.customs.gov.au](http://www.customs.gov.au/).