Major exporter Danone hardens stance on infant formula rules
Friday, 2 August 2024
Food giant Danone has said for the first time that it does want the Government to opt-out of a trans-Tasman standard on infant formula that it believes could cost exports and jobs, even if it means the country developing its own new standard.
Food Standards Australia and New Zealand (Fsanz) has developed a new standard for infant formula that would further limit statements manufacturers could make on their packaging, which Danone agues would hamper its ability to sell its formula in China.
A2 Milk, which is the other company that would be most directly affected by the changing rules on infant formula, declined to comment on its own position regarding an opt-out.
Danone has received advice to suggest it could still export infant formula to Australia under New Zealand rules, even if the two countries’ standards diverged.
Its Sydney-based director of legal compliance, Maria Venetoulis, warned last week that its French parent might close its New Zealand operations with the loss of 441 jobs and $1 billion in annual exports if the Government adopted the Fsanz standard.
While most parts of the Fsanz standard have proved uncontroversial, Danone had appealed to Food Minister Andrew Hoggard to call for a review of the labelling requirements at a meeting of New Zealand and Australian food ministers last week.
Hoggard did that, but was unsuccessful, leaving the Government with the option of either opting in or out of the standard in its entirety by a deadline looming on Monday.
He questioned earlier this week whether manufacturers would want to “throw the baby out with the water”, noting there would be complications in New Zealand charting its own course, in part because of the potential impact on exports to and via Australia.
A not insignificant amount of infant formula was exported to Australia and then transported in suitcases by Chinese tourists and students for resale in China on Alibaba, he said.
But Venetoulis said in a short statement that it saw an opt-out of the Fsanz standard as “the only viable way forward”.
That would allow the Government to introduce its own standard that “protected parent and caregiver access to important information and special medical formula”, she said.
“A separate New Zealand standard would send a clear message that the autonomy of New Zealand exports and consumers is front of mind.”
The Government could choose to retain the parts of the Fsanz standard that were “supported with evidence and aligned internationally”, she said.
Legal advice provided to Danone by law firm Kensington Swan suggested an Australian and New Zealand trade agreement meant New Zealand manufacturers could continue to export infant formula to Australia even if it didn’t conform to Fsanz labelling rules.
The Trans-Tasman Mutual Recognition Agreement to which it was referring stipulates that “a good that may be legally sold in any Australian state can be legally sold in New Zealand and vice versa”, it said.
However, Hoggard appeared to indicate to The Post on Monday that he would be averse to a step that could effectively undermine the intent of Australia’s own rules in Australia.
“I don’t want to undermine joint standards, because they provide a lot of benefits,” he said. “Keeping a good relationship with the Australian partners in the joint standard is important.”
Danone is the country’s largest exporter of infant formula and has so far been the only company that has been vocal in opposing the Fsanz standard.
A spokesperson for A2 Milk, which is understood to be the second-largest business in the infant formula export market, said it didn’t have any comment to make.
Many public health experts have supported further controls on the labelling of infant formula, fearing the emphasis placed by manufacturers on certain ingredients may have the effect of encouraging mothers to feed infants formula in preference to breast milk.