ACCC Inquiry 2014

ACCC inquiry into the Wagyu industry

The Australian Competition and Consumer Commission (ACCC) advised the Australian Wagyu Association (AWA) in November 2014 that it intended to conduct an inquiry regarding representations concerning Wagyu beef produced and marketed in Australia.

The ACCC is responsible for ensuring compliance with the Australian Consumer Law (ACL). The ACL is a single national law which aims to protect consumers and ensure fair trading in Australia. Specifically, the ACL requires businesses to ensure any statements they make about their products are accurate and do not mislead or deceive consumers.

One of the ACCC’s current priorities is credence claims, particularly those with the potential to have a negative impact on competition in the marketplace or on small businesses. Credence claims are representations about a premium or special characteristic of a good or service and can relate to the ingredients, the source of the product, the production method used or any other factor which differentiates the product from other similar products.

False or misleading credence claims can adversely affect consumers, who are often willing to pay a premium for products that are claimed to have this premium or special characteristic. False or misleading claims can also harm competitors who often incur additional production costs in order to be able to legitimately make a premium claim.

Result of ACCC Inquiry

On 18 November 2015 the ACCC advised that investigation regarding the labelling of Wagyu beef produced and marketed in Australia by organisations within the Wagyu industry has been concluded and the ACCC will not be pursuing this matter any further at this time.

The competition watchdog has conducted a thorough investigation and commented as follows:

The ACCC considered this matter in relation to certain provisions of the Australian Consumer Law (ACL), specifically:

  • Section 18 – misleading or deceptive conduct
  • Section 29(1 )(a) – false or misleading representations that goods are of a particular standard, quality, value, grade, composition etc.
  • Section 33 – conduct that is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose or the quantity of any goods.

The ACCC has carefully considered the information obtained during its investigation and at this stage the information does not indicate clearly that a contravention of the above sections of the ACL has taken place. As a result, the ACCC is not pursuing this matter any further at this time.

The Australian Wagyu Association (AWA) assisted with the investigation and welcomed this announcement.  The Association will continue to support the truth in labelling principals so fundamental to Australian Consumer Law.

As the peak body for the Wagyu industry in Australia, AWA is an advocate for truth in labelling.

The AWA has developed Trade Descriptions to assist AWA members on how best to describe Wagyu and crossbred Wagyu cattle that contribute to breeding and Wagyu beef brands. The Trade Descriptions are based around the breed content of the live animal. These Trade Descriptions are also endorsed by the peak body for national industry standards in meat production and processing, AUS-MEAT, under its raising claims protocol.

The ACCC further commented:

… there is currently a Senate Rural and Regional Affairs and Transport References Committee inquiry into the effect of market consolidation on the red meat processing sector (the Inquiry). Some submissions to the Inquiry have raised concerns about the potential for the language and labelling used in the promotion of meat quality/grades to mislead or deceive consumers. In particular, submissions have expressed the need for a language review, and the need for heightened consumer awareness of the MSA grading system with regard to intramuscular fat, marbling, meat colour and tenderness. As these issues are relevant to the concerns raised with the ACCC concerning Wagyu labelling, the ACCC has taken the opportunity to bring these concerns to the Committee’s attention. We consider the Inquiry to be the most appropriate forum to consider this matter.

The AWA will continue to communicate with our members regarding the Senate Inquiry and how we may support appropriate labelling to be used in the promotion of meat quality and grades. We encourage all live cattle sectors of the Wagyu value chain to use the Wagyu Trade Descriptors to ensure integrity in this premium market.
The ACCC encourages all businesses to ensure that the overall impression created by their labelling is accurate and does not mislead consumers. If you have any concerns about potentially misleading labelling, you can contact the ACCC on 1300 302 502 or www.accc.gov.au

See the ACCC letter of advice for further details – click here.