PATHWISE NPD 101: Permissions Pathways - Claims

‍When it really is better to ask for permission rather than forgiveness.

In this second instalment of our new New Product Development 101 series, the UC F&B team tackles all things claims and representations - the dos, don’ts, and damn-I-wish-I’d-thought-of-thats. 

If you’re keen to hear more on this topic, you’re welcome to join our Chief Counsel, Amelia Edwards, in a conversation about the food-medicine-cosmetics interface at the Naturally Good expo in Sydney on 6^th June 2023 (free to attend!) or reach out to set up time for a chat. 

Why are we here?

UC F&B specialises in creative solutions and knowing how to navigate those tricky in-between regulatory spaces. We enjoy helping all of our clients get their products successfully to market but we especially love working with businesses that are getting creative and trying new things. We’re about helping businesses that do get things done.

Part 1 of our Permissions Pathways discussion focused on working out when you can add an ingredient or substance to a food product. However, we know that a big reason businesses want to add something to a food product is to be able to talk about it or position your product in a certain market segment. Whether you just want to highlight how much good stuff or how little bad stuff is in your product, or you want to call out the positive effects your product or its ingredients have on the human body, you’re making a claim and you need permission to do so. You also need to be aware of the kinds of claims that are more likely to attract regulator or competitor attention, what kind of evidence you need to support a claim, and what risks arise from crossing the line. Ultimately, if you want to make claims you can’t make about food, then you need to consider if you’re actually selling a medicine - and what your pathway to market looks like from there. But never fear! The UC F&B team is here  to help you be PATHWISE and avoid the serious consequences of a misstep when navigating the food-medicine interface.

You can download our handy Permissions Pathway Flowchart here. 

A. THE FOOD-MEDICINE INTERFACE

What can be sold as or in food & beverages in Australia, and what you can or must say about food products, is regulated primarily by the Food Standards Australia New Zealand (FSANZ) Food Standards Code (FSC), as given force by state-based law and enforced by state-based regulators. However, products that are consumed orally may alternatively be regulated as medicines by the Therapeutic Goods Administration (TGA) if certain factors indicate that a consumer will apprehend that the product is meant to be consumed for a therapeutic purpose. 

Key factors in determining whether a product should be sold and regulated as a food or a medicine include formulation (covered in Part 1), form, and (represented) function. The TGA may consider a product to be presumed to be sold for a therapeutic purpose based on overall impression, which can arise from a combination of the words and imagery used on label or in supporting collateral, the product packaging and product form, and where and how the product is sold. Products in powder, pill, or capsule form may be subject to a TGA Determination that means they will be deemed to be medicines.

It is illegal to make a therapeutic claim about a product sold as food (see discussion below). While making a therapeutic claim will not in itself render the product a medicine, penalties and other consequences may apply, and it still contributes to the overall impression of the product’s purpose - which may be enough to force you across the line if no clear presumed-food exemption applies. Additionally, if the claim (therapeutic or otherwise) is not clear, correct, and evidenced, your business risks not only breaching the misleading and deceptive representation prohibitions under state food laws but also attracting the ire of the ACCC (who wield the big penalty sticks in this space). 

The ‘food-medicine interface’ in Australia, and your NPD path to market here, is dichotomous - a product can be either food or medicine, but not both. So why does it matter? In a nutshell (or capsule, perhaps), therapeutic goods aka medicines are viewed as automatically posing a higher potential risk to consumer health and safety than foods. For that reason, medicines are required to be listed or registered on the Australian Register of Therapeutic Goods, every claim you make about a complementary medicine must be on the ‘permissible’ list, all ingredients must be on the permissible list, and other safety-based hurdle requirements apply. If you pick the wrong path, it can be very difficult to pivot down the track.

‘Nutrition content claims’ and most permitted ‘health claims’ (see discussion below) generally don’t attract a risk of TGA oversight. However, though nutrition content claims are often viewed as the lowest-risk option, claims in this category include claims about the absence of allergens, so - if that is (or becomes, including through cross-contamination) incorrect - can lead to penalties for non-compliance and misleading/deceptive conduct but also consumer-level recalls and significant costs and damages exposure.

B. PERMISSION TO SPEAK FREELY

Making a claim about a substance that you do not have permission to add to a food or beverage is likely to draw competitor, regulator, and consumer attention to the non-compliance that might otherwise go unnoticed. So, if you want to make claims about a substance, you need to first have permission to add it or it needs to be naturally occurring in the food product (or its food ingredients) (see Part 1).

The rules governing making claims about food depend on the kinds of claims you are trying to make. In this section we’re talking about voluntary claims rather than warnings, advisory statements, or other forms of disclosure that may be required either by specific provision of the FSC or to mitigate legal risk of a claim for misleading/deceptive conduct or negligence. 

‘Claims’ include representations conveyed to a viewer in words, pictures, or other elements of a communication, both on your product label and in all other collateral (including POS, website, and socials). For the purposes of the ACL, a representation can also be misleading by omission (the things you don’t say).

Therapeutic, health, nutrition content claims, and other specific types of claims (including comparative claims) are all expressly regulated under the FSC, as detailed in the following sections of this explainer. Other types of claims you might want to make about food may be less strictly regulated, like claims about how the product tastes, was produced, or makes you feel emotionally, though the ACL will still apply. Sometimes the lines between expressly regulated and less strictly regulated claims can seem a bit blurry, and that’s doubly true when we think about what can be inferred or apprehended from our representations, not just the content of the representations (words, images) themselves. The diagram below illustrates how a range of claims on the presence of probiotics in a food product might be categorised.

Therapeutic Claim >> Health Claim >> Health Claim? >> Nutrition Claim* >> emotive claim

*do you think this is also an implied health claim?

Though it may be stating the obvious, making a claim about a substance that you do not have permission to add to a food or beverage is likely to draw competitor, regulator, and consumer attention to the non-compliance that might otherwise go unnoticed. So, if you want to make claims about a substance, you need to first have permission to add it, or it needs to be naturally occurring in the food. See Part 1 of this NPD series for more info on ingredients. 

1. ‘Presence of’ claims

E.g. “with amino acids”. “‘Presence of’ or ‘absence of’ claims are the most basic type of nutrition content claim and can be made in relation to nutrients that are naturally occurring, additives, or nutritive substances where there is not a specific rule in Schedule 4 of the FSC about the claim. This general rule is only overridden where a Chapter 2 product-specific standard prohibits the making of any nutrition content claim about the substance. If there are conditions in Schedule 4 about making claims about that nutrient/substance (including the general rule there about claiming the presence of vitamins and minerals), those conditions must be satisfied or the claim is non-compliant. 

2. Descriptive nutrition content claims

E.g. “High in Fibre”, “Gluten Free”. Nutrition content claims are claims about the presence of certain nutrients or substances in a food. These claims include both “x% free” and presence/absence claims as above as well as more precise quantitative or ‘descriptive’ statements such as ‘light’, ‘low in’ or ‘good source of’. A descriptive claim, as opposed to a ‘presence of’ claim, cannot be made about a food, substance, or component of food unless it is specifically permitted in Schedule 4 of the FSC. Again, if conditions on use of a claim are set out in Schedule 4, those need to be satisfied when you make the claim and at all future times while it remains on label or available to the public. 

3. Health claims

E.g. "Contributes to the normal function of the immune system". Health claims refer to a relationship between a food/nutrient and health, or an effect on the human body, rather than a statement of content only. Only permitted health claims may be made about food. This class of claims can be difficult to distinguish from therapeutic claims sometimes, so sticking closely to permitted wording is recommended to reduce non-compliance risk. However, just because a claim is permitted doesn’t mean that it is without risk - make sure the claim is correct and evidenced for your product.

“General level” health claims refer to effect on health. For example: calcium for healthy bones and teeth. “High level” health claims refer to a nutrient or substance in a food and its relationship to a serious disease or to a biomarker of a serious disease. For example: Diets high in calcium may reduce the risk of osteoporosis in people 65 years and over. Phytosterols may reduce blood cholesterol. High level health claims are more strictly regulated.

Other hurdle conditions apply to making health claims about food depending on the classification of the product, including the requirement that the product meet the Nutrient Profiling Score criteria.

4. Therapeutic claims

Therapeutic claims (relevantly, prevention or treatment of an ailment, illness, or imbalance) are prohibited and cannot be made about food in any circumstances. 

Listed medicines and devices can be labelled/sold with ‘indications’ or claims for therapeutic use, which may include health maintenance and health enhancement or certain indications for the prevention or treatment of non-serious, self-limiting conditions. Permitted claims for complementary medicines are those listed in the Permitted Indications Determination. 

C. PERMISSION DENIED?

The only pathway to obtaining permission to make descriptive (vs presence/absence) nutrition content claims or to change the conditions applicable to such a claim is via an application to amend Schedule 4 of the FSC. 

If a supplier wishes to make a general-level health claim about a food or component of food but no corresponding permitted health claim exists in Schedule 4, the supplier may file a self-substantiated notification with FSANZ detailing the food-health relationship on which the claim is based. It is the supplier’s responsibility to ensure that it holds sufficient reliable evidence to support the claim. The notification will not be individually assessed but is published on a public register. Once published, that supplier can make that claim without being deemed to be making a non-compliant health claim, but that protection does not extend to any other supplier. Further, publication of the notification does not provide in itself a defence against other breaches (making therapeutic claims, for example) or misleading and deceptive conduct allegations. 

If you want to make therapeutic claims about your product, then you need to explore the medicines pathway under TGA regulation (visit our UC Health page for more information about how we can support you on this journey).

Generally, the making of a non-permitted (and not correctly notified) health claim is deemed to be high risk conduct because it is easily discernible non-compliance and an area of regulatory and competitor focus that can attract both penalties for non-compliance and larger penalties for misleading and deceptive conduct if the claims are also not reasonable or sufficiently evidenced. While product recall is unlikely where the claim does not create a risk to public health and safety, trade withdrawals may be practically or expressly required to avoid regulatory intervention. Further costs, damages, and reputational damage are likely to flow from any competitor or regulator action for non-compliance.

WHERE TO FROM HERE? WE’RE HERE TO HELP.

Contact our UC F&B team at food@universalcounsel.com.au to discuss your packaging, claims, NPD permissions, and paths to market.

See our UC F&B unit page for more information on the F&B industry-specialised services we provide under this banner, including labelling and collateral review, non-compliance risk management, and end-to-end strategic NPD support.

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