Enforcing country-of-origin labels for all seafood served in Australian restaurants and cafes will tip the scales against small businesses, according to the Australian Small Business and Family Enterprise Ombudsman (ASBFEO).
Just days ahead of Easter, where Australia’s appetite for fish and seafood reaches a seasonal peak, ASBFEO has called on the federal government to reconsider its $1.6 million pledge to clarify the origin of fish, lobster, prawns, and other seafood plated up to local consumers.
Those concerns relate to a discussion paper released in December by the Department of Industry, Science, and Resources, in which the federal government proposes a mandatory country of origin (COoL) system to promote local produce and boost consumer awareness.
Under the proposal, hospitality providers will soon need to clearly indicate if their seafood is Australian, imported, or of mixed origin, with that information presented to customers on menus or other signage.
Announcing the plan in October last year, Minister for Agriculture, Fisheries and Forestry Murray Watt said new labeling will support local producers in Australia’s $3.6 billion seafood industry.
“I’ve seen firsthand the value of our fisheries industry, both as a job creator and an economic driver in regional Australia,” he said.
“As traceability and provenance become more important to consumers, we must support the efforts our local seafood industry is making to identify their products.”
The proposal earned early support from Seafood Industry Australia CEO Veronica Papacosta, who views the scheme as a natural extension of existing supply chain knowledge.
It would “allow consumers to make informed decisions about the seafood they buy in restaurants, cafes and take-away food stores across the country, and allow them to support our great Australian seafood producers,” she said in December.
“Right now, for food safety purposes, the supply chain of seafood is known in food service all the way to the kitchen door, however, the information is often not passed on.”
The discussion paper recognises that for all its proposed benefits, especially for primary producers, the scheme could come with compliance costs for hospitality businesses.
The “seafood CoOL will impact a range of businesses in the hospitality sector and that there may be some practical challenges involved,” it says.
“For example, menus may need to be updated depending on seasonal availability and some items may contain seafood from multiple origins.
“Labelling requirements will be as simple as possible to minimise the impact on businesses.”
Submissions to the Department of Industry, Science, and Resources regarding the plan are now closed.
However, the ASBFEO issued a public call-out on Monday, claiming compliance costs linked to the proposed schemes will be too high for small businesses.
As such, the federal government should reconsider its plans entirely, or offer a voluntary exemption where seafood is a minor ingredient.
“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,” said Ombudsman Bruce Billson.
The plan would challenge small businesses which vary suppliers due to cost or seasonal availability, the Ombudsman added.
“When Australian seafood is sold out or not available, a small business may decide it does not want to disappoint customers so will temporarily source an imported product, yet this will require the costly step of reprinting new menus for every change.”
The discussion paper states seafood byproducts, like prawn crackers or anchovy paste will not require COoL signage, however the Ombudsman maintained it will be “onerous for hospitality businesses to navigate and maintain compliance.”
The ASBFEO is not the only industry-facing group to question COoL plans.
Restaurants & Catering Australia flagged its concerns as early as October last year when it used its post-Federal Budget statement to say COoL rules would “place unnecessary financial and administrative burdens on small business with no discernible benefit for local seafood markets.”
“We will continue to monitor these matters as they arise and will advocate and fight on behalf of the industry,” former R&CA CEO Belinda Clarke said.
“Things are so tough for venues, we just don’t need any more red-tape and counterproductive policy that will lead to further business closures.”
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
