Nutrition Australia

Jo Rogers Memorial Oration

‘Our Food – a Consumer Perspective’

Friday 3 May 2002
Deakin University – Toorak Campus
Suzanne Russell AM

Thank you for inviting me to present the 2002 Jo Rogers Memorial Oration. I am honoured to be linked with Jo in this way. My memories of her go back to the days, some twenty years ago, when she and I were members of the federal Food Standards Committee of the National Health & Medical Research Council. It was a body, as were all those associated with the NM&MRC, with a vast agenda, and complex and slow moving processes. Straight-talking, no-nonsense Jo Rogers was a breath of fresh air in that process, and industry, government and consumer representatives all acknowledged her integrity and her expertise. Those who worked with Jo had confidence in her opinions and we trusted her advice.

It is those two words – confidence and trust – that I would like to apply to the topic ‘Our Food – a Consumer Perspective. Consumer confidence and consumer trust became key phrases in the mission statements of many businesses during the 1990’s. A corollary of this, customer loyalty, emerged as a major focus for industry, and we saw the manufacturing and retailing industries attending conferences, seminars, workshops, possibly even a summit or two, on ‘winning consumer confidence’, ‘customer loyalty – the key to success’ and other variations on the theme. Customer loyalty schemes emerged as a favoured marketing tool and the comparative costs of keeping an old customer versus gaining a new customer demonstrated the value of building trust and confidence with your market.

Who do consumers trust? At a Society of Consumer Affairs Professionals in Business, Australia (SOCAP) Conference in October of last year, Brian Sweeney of Sweeney Research presented a chart ranking consumer trust, based on a 10 point rating scale survey of business and community sectors. It is worth noting that ‘big retailer chains’ and ‘food manufacturers’ rank fourth and sixth respectively in the twenty-two sectors. It is also opportune to remind ourselves how quickly our confidence can be undermined – this was obviously prepared prior to 13 September 2001, otherwise airlines, given the Ansett collapse, would not be sitting in fifth place.

Sweeney Research carried out a consumer service focussed survey for SOCAP during 2001. They surveyed a range of consumer products and services businesses regarding views on the importance of customer service and consumer affairs issues. While 94% of respondents agreed that ‘today’s customers are more demanding’, only 80% agreed with the statement that ‘by offering a high level of customer service we can differentiate ourselves from the competition’.

When it came to ‘Understanding of and Looking After the Customer’ – it was interesting to see that 84% indicated that their company ‘attaches a great deal of importance to complaints resolution’, but only 72% stated that ‘customer satisfaction results are being more widely distributed through our organisation’. Does this mean that, whilst business recognises consumers are becoming more demanding, meeting that demand is not always seen as a market driver, nor is bringing all staff into the picture of understanding consumer satisfaction. I am sure we have all had the experience of a company where senior executives pore over the complaint statistics, but no one at the front counter or the check-out, the point at which customer service is delivered, ever gets to hear the results.

Time Manager International (TMI) Australia released its National Complaints Culture Survey 2001 in November last year, the results of surveying 33 Australian businesses. The 3096 respondents were employees of those businesses and it was explained that as they came from all levels within each business and were responding as employees in contact with consumers and as consumers of other businesses, they are regarded as presenting valid consumer views. This survey confirmed that customers are more demanding – 50% of the respondents expect that companies should be able to resolve their complaint on the same day it was made. Respondents considered that customer aggression and rage are increasing and that customer service staff have inadequate skills to cope with irate customers. Given the Sweeney research it is worth noting that only 11% of the TMI respondents believe the companies they deal with welcome their complaints and see them as an opportunity to improve. Only 25% of the TMI respondents gave a positive rating to the training they received in handling complaints. One sign of the times is that the use of email and the internet for registering complaints has risen by 300%.

This survey is carried out annually and the report concluded that organisations are handling complaints marginally worse that last year. According to Ralph Simpfendorfer, Managing Director of TMI ‘Companies may say they believe in good customer service and effective complaints handling, but do they encourage and make it easy for their customers to complain. We shouldn’t be afraid to complain and companies should be prepared to listen – the best ones do and their products and services are usually better as a result. Sadly it seems there’s still a long way to go before consumers are taken seriously in Australia’.

TMI is part of a global organisation and the Australian results form part of an international survey. Highlights of this survey indicate that 96% of Australians tell others of a good experience with a company, compared to an international average of 91%, and 94% of us pass on a bad experience compared to 88% internationally.

As we saw from the Rating of Trust chart, big retailer chains and food manufacturers gained a score of around six out of ten, understandable if we relate the figure to food purchases. As food consumers we buy millions of items each year and only a small proportion are returned with complaint. Food manufacturers have been notoriously generous over the years with their response to complaints, to the point where it was realised that some companies were unintentionally encouraging bogus complaints. For the most part, customer service is alive and well in the food industry.

As a consumer advocate, my concern is much more with the products, their effect on our health and safety, and the quality of the information provided to enable us to make informed choices. It would be fair to say that the food industry has had considerable influence on the regulations governing the food market, probably more than most other industries have over their own markets. My ‘baptism of fire’ began in the mid 1970’s, when as a home economist, at home with four small children, I became involved in the early days of the consumer movement. I began calling publicly for ingredient labelling on pre-packaged food, date marking and other outrageous requests such as the name and address of the manufacturer of a product. I received threatening phone calls. I was asked to speak at food industry conferences and then screamed at by members of the audience. For some, their worst fears were realised when I was appointed to the federal Food Standards Committee in 1976.

I was one of the new appointees to a reformed Food Standards Committee. Prior to this, food standards were drawn up by industry, then virtually rubber stamped by a large and industry dominated committee. The new and smaller committee consisted of several highly qualified food scientists together with one industry representative and one consumer representative, myself. We were supported by an experienced and committed, but totally under resourced, government secretariat.

There was a culture change, however the technical information about raw food products and food processing still had to be provided by industry. Australia had limited independent research and analytical resources, contact with international bodies was slow and the advice often not relevant to Australian conditions. As I mentioned earlier, the agenda was vast and the members of the committee sat around the table, examining and debating every word of every one of dozens of food standards at each of its meetings. A draft standard would then move slowly through the NH&MRC hierarchy of committees, on occasions being rejected at a higher level and sent back, thus adding at least another six months to the process. Several years after this our requests for nutrition expertise were heeded and Jo Rogers was a very welcome addition to the committee.

The process had to change – standards took years to finalise, sometimes they were technically inaccurate due to the limited sources of information. There was no mechanism to urgently recall unsafe products. Industry lobbied for, and gained, more seats at the table, and the public wanted increased consultation. The Food Standards Council emerged, but now dozens of people, all representing different interests, sat around the table at each meeting, still debating every word of every standard.

All agreed that this was not the way forward, and with pressure, particularly from the then Federal Bureau of Consumer Affairs, the National Food Authority was established in 1991, with the States and the ACT entering into an agreement to work towards uniform food legislation. This was the first body with its own resources dedicated to developing food standards and there was considerable lobbying carried out by consumer and public health organisations to ensure that the objectives of the organisation reflected public health and safety interests. A step forward, but there were more battles to come. In 1995 the legislation was amended when New Zealand came on board and the body became ANZFA. The Treaty between Australia and New Zealand allowed for harmonisation of food standards. Up until this time the National Food Authority objectives stated that it must have regard to promoting consistency between domestic and international food standards ‘providing it does not lower the Australian standard’. These latter words were deleted from the objectives when the agreement was signed with New Zealand, an action which still has repercussions today.

The Food Regulation Review in 1998 (known as the Blair Report) provided further cause for concern with, initially, recommendations to include an trade–based clause as an overarching objective for ANZFA. The Report also recommended giving a lower priority to the ‘provision of adequate information to enable consumers to make informed choices’ clause. Both recommendations were successfully fought in the ‘corridors of power’, and here I give credit to the staff of the Australian Consumers’ Association.

Other ramifications of the Blair Report are being put into place during this year. As part of reorganisation of food standards and food policy development the role and composition of the Ministerial Council (formerly the A NZ Food Standards Council) has been altered from Health Ministers only, to a system of ‘lead minister’ representation from each of the nine state, federal and New Zealand jurisdictions. ‘Lead minister’ means that one minister holds the vote for each jurisdiction, and is advised by or joined by ministers from other portfolios in decisions made by Council. Whilst at present Health Ministers in each jurisdiction are taking the ‘lead minister’ seat, the way is now open for Ministers from other portfolios, such as trade and agriculture, to take this role. This move is not welcomed by consumer and community organisations as being in the interests of public health and safety and the consumers’ ‘right to know’.

The Council, to be known as the Australia and New Zealand Food Regulation Ministerial Council (ANZFRMC), takes over responsibility for developing food policy, previously the domain of ANZFA. The Council has established three bodies to assist it, namely, the:

• Food Regulation Standing Committee (FRSC) comprising senior government officials from the Commonwealth, New Zealand, the States and the Territories;
• Development and Implementation Sub-Committee (DISC) comprising heads of relevant food inspection and enforcement agencies.
• Technical Advisory Group (TAG), a technical advisory body.

ANZFA will become the Food Standards Australia New Zealand (FSANZ) and will have its role restricted to setting food standards based on policy guidelines dictated by the Ministerial Council.

In the words of ANZFA, or FSANZ, as it will soon be known:

‘Food Standards Australia New Zealand (FSANZ) will not be required to consult on these policy guidelines, nor consider their regulatory impacts, but will automatically implement them in its work. ANZFA is working with the Standing Committee to help clarify the distinction between policy guidelines and technical standards matters. This is not necessarily a straightforward or easy process, but is required to ensure an efficient and effective system.’

The name change will occur when the amended Treaty between Australia and New Zealand is finalised, expected to be in mid 2002, however the processes are already in place. A ‘Health & Related Claims’ Consultation Paper has been issued by the Food Regulation Standing Committee for public comment. ANZFA’s review of Health Claims began in 1997, and I believe it is only through the concerted efforts of consumer and public health organisations that we have reached the current stage where ANZFA’s recommendation to the Ministers is to:

‘Maintain the prohibition of health claims but allow for substantiated claims as exemptions to the prohibition to be managed under a co-regulatory system with key features of education, monitoring and surveillance.’

The Consultation Paper takes us a step back to policy development, which must now go before the new Ministerial Council and then to FSANZ for implementation as a standard. Consumer and public health organisations have major concerns about the use of health claims on food and the opportunities to confuse consumers, to encourage eating patterns which may be unhealthy in the longer term and to offer individuals solutions to problems which, for them, may not even exist. Through ANZFA there has already been a lengthy process involving consumer consultation and the Food Regulation Standing Committee’s paper is based on the outcomes of this in presenting options and a recommendation to the Ministers. The recommended option is a compromise for community groups, but it is more restrictive than many in the food industry would like to see. With trade, agriculture and other Ministerial portfolios having the opportunity to become more involved in the decision, will we see an even less restrictive option endorsed.

Now that Ministers on the Ministerial Council may come from a range of portfolios, will health and safety be the priority in developing policy or will these aspects take a backseat to trade issues? In Victoria, the government has moved to a ‘whole of government’ approach, which means that all Ministers, via their departments, must be offered the opportunity to participate in the vote to be exercised by the Victorian ‘lead minister’ at the Ministerial Council level. At present the Minister for Health is the ‘lead minister’ and hopefully will continue in that role.

The last contentious decision on food at the Federal Ministerial Council level was the vote on the labelling of genetically modified foods – would the outcome have been as consumer friendly if a whole of government approach prevailed in each state? The issue of health claims is far more complex than the labelling of one aspect of a food – are the public able to express their views as clearly and as directly as in the GM debate? Will the media be prepared to crystallise and convey to the elected members of Parliament the more complex issues involved in health claims?

Let me now pose some further questions, leading on from this new process.

Who will decide what is policy development and what is standards setting?
No doubt it will be Ministers who decide if they wish to develop policy before a standard setting process takes place. Will they make that decision based on industry or consumer pressure, wait for public action or be influenced by economic factors, innovation, technological advances or international trade? To what extent will this prolong the development of a standard? In the previous system Ministers voted on a proposed standard, the implementation and technical detail were apparent - will Ministers vote differently if they are not sure how their policy will be interpreted?

How long will it take to develop a standard?
In theory the time scale should be shorter, but will there be delays while it is decided whether an issue is policy or standard, rather than focus on the actual substance of a standard? Will there be delays while policy needs to be clarified during the standards setting process. The Ministerial Council will have the authority to ask FSANZ to review standards which do not meet policy guidelines. Does this mean that a standard cannot be implemented until the Ministerial Council finds the standard acceptable? How often will the Ministerial Council meet?

Will the policy development consultation process allow equal access for all interests?
How will the process assure consumer that they will have the same access to the wider range of Ministers who will now be involved in decisions on food policy which directly affects food standards? We see reports of $1000 a head dinners for industry to meet and chat with Ministers in a social setting. Consumer and public health organisations have no chance of being able to afford this opportunity. To what extent will this influence the outcomes of policy decisions?

Will the standards setting process be so technical that consumer views will be excluded?
Over the last few years ANZFA has had an effective consultation process, particularly in relation to food labelling and a promise has been made that this will continue in the new process. Given than the role of FSANZ will be implementation of policy only, the development of standards may be reduced to technical interpretation, leading to minimal or the exclusion of consumer views. The response to the meat pie tests reported in ‘Choice’ magazine in April 2002 demonstrates the gap between public expectations of the term ‘meat’ and the definition of ‘meat’ in a technical sense.

How will the development of FSANZ food standards sit with Australia’s commitment to international food standards?
Many of the amendments to food standards over the last few years have been based on federal government policy to align our standards with those of the international food standards body, Codex Alimentarius, to which Australia is a signatory. For a considerable number of the amendments, such as maximum residue levels and chemical and biological contaminants, Australia is able to make use of the results of international research which we could not afford to carry out ourselves. But in other cases we could be regarded as bringing our standard to the lowest common denominator and in some cases even proposing a lowering of international standards. Last week the Codex Task Force on Fruit and Vegetable Juices met in Rio de Janeiro. Australia is asking for a reduced level of concentrate in reconstituted orange juice on the basis that, if it stays at the proposed level, we will have to import more concentrate and that will affect our balance of payments. Australia also proposed to Codex that there should be an international standard permitting the fortification, for example, with calcium, of orange juice. Will the involvement of trade and agriculture ministers in food standards policy and our commitment to Codex standards mean that trade issues will dominate, to the detriment of consumers.

I should note here that FAO and WHO have decided to undertake an evaluation of the work of Codex Alimentarius, addressing ‘the global requirements for food standards for the protection of consumer health, development of international and domestic trade and related ethical considerations’ It is opportune for public health and consumer organisations to ensure that they make input to this review.

Given that some Australian standards and New Zealand standards differ, will the next stage of harmonisation mean the lowest common denominator?
There are areas where Australian and New Zealand governments have been unable to agree on the adoption of a food standard. Because the Treaty between the two countries allows free trade, products which would be prohibited from sale in Australia if they were manufactured here, or if they were imported from a country other than New Zealand, have been brought into Australia from New Zealand. In some cases importers have brought food products into New Zealand and then moved them to Australia. Under the free trade agreement they cannot be prohibited from sale, although they do not comply with Australian food standards.

When this happened with formulated caffeinated beverages or ‘energy drinks’, Australia’s response was to bring in a food standard specifically permitting these products to be manufactured and sold here, despite the concerns expressed regarding the effects on children of caffeine intake from these products. This situation will arise with other products, including those covered by the dietary supplements regulations, and we shall see if our standard is then set to meet the least onerous restrictions.

How will the benefits of involving inspection and enforcement agencies at a policy making level be realised in the marketplace?
Policies and standards are of no value unless they are enforced. The newly established Development and Implementation Sub-Committee, to be known as DISC, will have responsibility for ensuring consistency of enforcement of food regulations. A major criticism of food regulation is the enforcement, or lack thereof. If the Ministers are really serious about the effectiveness of the new system then we should expect that sufficient resources will be allocated to enforcement at the State and Local Government levels.

The public are yet to be convinced about the enforcement of food hygiene controls. The new food safety regulations provide a potentially effective framework, but public perceptions are reinforced when they read media reports such as that of a restaurant in Queen Street, Melbourne, being closed by the health authorities in April 2002. The owner was convicted, in October 2001, of offences under the food act, yet, six months later, it took public complaints to find food items with a use-by date of 1994, food stored in a toilet room, utensils in the backyard, food appearing to contain mould or insects and mouse droppings. We could ask why was the business not being monitored by the appropriate authorities, but we know exactly what the response would be – lack of resources. One of the major health challenges over the next few years will be to reduce the incidence of food poisoning in Australia – it is going to be a challenge and it is going to take resources.

My final question – will the new system make food and nutrition education a high priority and provide the necessary financial support?
Another major challenge in food regulation will be the introduction of health claims and nutrient claims to support the marketing of foods. I mentioned earlier the health claims recommendation to the Ministers, which allows for ‘substantiated claims’ with ‘key features of education, monitoring and surveillance’. The opportunity for misinterpretation and misunderstanding by consumers regarding health and nutrient claims will be a major problem if not addressed by appropriate education.

In launching ANZFA’s Food Labelling poster in October 2001, Ian Lindenmayer, Managing Director of ANZFA, emphasised the importance of providing accurate and useful sources of information. ANZFA did an excellent job consulting with the community in developing the new food labelling standards, supported by the ANZFA commissioned ‘Food Labelling Survey’. We have come a long way since one food industry CEO shouted at me that it would only confuse consumers to have the ingredients listed on the label and he was loudly supported by the industry audience. Now that our food labels are well on the way to being more informative perhaps we should look at beverages, particularly the wine industry.

In an article in the Age, 9 April 2002, Jeni Port notes that ‘our producers are now quite accustomed to abiding by strict export standards when it comes to labelling, standards they are often not required to enforce in the domestic market’. In Australia there is no mandatory requirement for wine producers to indicate where their wines are sourced, as long as they put the winery name and address on the label, an address which can be far from where the grapes are grown and processed. The producer has to be far more area specific if exporting to Europe or America.

Australia has been asked to provide, for EU scrutiny, a list of terms such as reserve, classic, premium, old vine and an indication of what they mean. Here the terms are unregulated and mean nothing – we have ‘classic release’ $10 wines, and ‘premium reserve’ casks on the shelves in Australia, but they are not for export. The industry has refused, saying that ‘Australians have been successful largely because we’ve got the freedom to innovate and experiment.’ Can I suggest that we are seeing a re-run of the food industry arguments of a few years back?.

If consumers are to gain maximum advantage from product labels, from advertising and from a myriad of information and misinformation sources there must be an underpinning of education. Schools, governments, community organisations, research bodies, health professionals and the food industry all have a part to play in food and nutrition education. Research bodies have had cuts in independent funding. Reductions in public sector health funding means that an increasing proportion of dieticians are employed in and tied to the food industry. Community organisations such as Nutrition Australia and the Consumers’ Association have limited funds. The nutrition component of home economics subjects in schools is squeezed as the curriculum veers towards food technology and hospitality studies.

Recent reports on the increasing incidence of obesity, particularly among children, brings into sharp focus the need to assist individuals in differentiating between marketing strategies and personally useful information. Who can and will provide the resources to educate consumers about the links between food and health and who can the consumer trust?

The new Food Standards Code, to come into full effect in December 2002, and the implementation of a new system of developing food policy and setting food standards provides the opportunity to ask some of the big questions – increasing international trade is good for Australia, but will it be negated by the exponential increase in health care costs related to food related illness if we allow trade interests to overtake consumer interests? If there is a decline in the regulation of food, will individual consumers have sufficient food and nutrition education and information to make food choices which promote their own well-being? How can the new system best encourage a unified approach to nutrition education to support the Australian food and nutrition policies and regulations?

There is a need to build consumer trust and confidence in the way governments control, and industry responds, to the marketing and sale of foods. Regulators must acknowledge that the public does not identify risk in the same way as scientists and that public expectations must be taken into account when developing food standards. Nowhere was this more apparent than in the GM food labelling debate, where it had to get to the level of the Council of health ministers before the views of the public, the people expected to eat the foods, were given due deference. Public opinion will change over time, just as scientific evidence changes, but the changes will only come about as consumers gain confidence in the system. Consumers should be able to trust the food standards regulators to place health and safety as the priority and to incorporate consumer expectations into the food standards decision making process. We need to be shown that consumers can trust and have confidence in the new food regulation system.

References:

ANZFA (2001). Food Labelling Issues. NFO Donovan Research Report, ANZFA website

ANZFA (2001). Better labelling information for consumers. Food Standards News, October 2001

Australian Consumers Association (2002). Meat Pies? Well, sort of… Choice, April 2002

Cauchi, S. (2002). Eating their way to fat future. The Age, Tuesday 23 April 2002

Dewing, J. (2000). The Shopping Centre as a Community Infrastructure. Is it Health Promoting. Journal of the Home Economics Institute of Australia, 7 (4)

Johnson, L. (2002). Food Inspectors close high profile restaurant. The Age, Monday 1 April, 2002

Lindenmayer, I. (2001). Implementation of the Joint Food Standards Code – converting threats into opportunities. Third Annual Labelling Conference, Sydney

Munro, I. & Meester, M. (2000) Loyalty programs. Journal of the Home Economics Institute of Australia, 7 (4)

Port, J. (2002). Message on a Bottle. The Age, Tuesday 9 April 2002

Sweeney, B. (2001) Consumer Directions Research. Commissioned by Society of Consumer Affairs Professionals in Business Inc.

TMI (2001). National Complaints Culture Survey, Time Manager International Australia

TMI (2001). International Complaints Culture Survey, Time Manager International Australia