RURAL AND REGIONAL COMMITTEE FINAL REPORT Impact of … · 2013-03-20 · RURAL AND REGIONAL...

RURAL AND REGIONAL COMMITTEE

FINAL REPORT

Inquiry into the Impact of Food Safety Regulation on Farms and Other Businesses

ORDERED TO BE PRINTED

March 2013

By authority

Government Printer for the State of Victoria

Parliamentary Paper

No. 223 Session 2010‐13

Copyright © 2013 Rural and Regional Committee.

All rights reserved.

Cover design by Geronimo Creative Services Pty Ltd, Melbourne.

Printed in Victoria, Australia, by Tenderprint Australia Pty Ltd.

National Library of Australia Cataloguing‐in‐Publication entry Author: Victoria, Parliament. Rural and Regional Committee

Title: Final Report: Inquiry into the Impact of Food Safety Regulation on Farms and Other Businesses

ISBN: 978‐0‐9757058‐7‐2 (paperback)

978‐0‐9873325‐2‐3 (electronic document)

Notes:

Subjects Food law and legislation‐‐Victoria.

Food industry and trade‐‐Government policy‐‐Victoria.

Food processing industry‐‐Government policy‐‐Victoria.

Food supply‐‐Quality control

Dewey Number 344.94504232

This Report is available from the Committee’s website at: www.parliament.vic.gov.au/rrc

Parliament of Victoria

Rural and Regional Committee


ISBN 978‐0‐9757058‐7‐2 (hard copy)

ISBN 978‐0‐9873325‐2‐3 (electronic copy)

Rural and Regional Committee i

Contents

Members and Staff ...................................................................................... v

Terms of Reference ................................................................................... vii

Chairman’s Foreword ................................................................................. ix

Executive Summary .................................................................................... xi

Recommendations ................................................................................... xix

Chapter one: Why regulate? ....................................................................... 1

1.6 The Committee’s approach .............................................................................................. 2

1.10 Why regulate? ................................................................................................................ 3

1.22 The cost of regulating ..................................................................................................... 5

1.33 Imported products and domestic production – myth versus reality ............................. 7

1.49 Other issues .................................................................................................................. 10

Chapter two: How we regulate ................................................................. 13

2.14 Risk‐based approach .................................................................................................... 15

2.32 Outcomes‐based system .............................................................................................. 18

2.46 Consistent outcomes, inconsistent approach .............................................................. 20

2.68 The role of government and the role of regulators ..................................................... 25

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Chapter three: Australia’s food safety framework ................................... 29

3.8 Primary Production and Processing Standards .............................................................. 31

3.15 Food safety regulation in Victoria ................................................................................ 32

3.22 Dairy ............................................................................................................................. 33

3.38 Dairy Food Safety Victoria ............................................................................................ 35

3.45 Meat and poultry ......................................................................................................... 37

3.55 Seafood ......................................................................................................................... 38

3.67 PrimeSafe ..................................................................................................................... 39

3.75 Victorian Committee of Food Regulators .................................................................... 40

3.88 Measure the effectiveness of regulation ..................................................................... 43

Chapter four: How the auditing process works ........................................ 49

4.4 Food safety programs .................................................................................................... 50

4.8 Private sector standards ................................................................................................. 51

4.11 Food safety audits ........................................................................................................ 51

4.17 Food safety auditor approval ....................................................................................... 52

4.20 Auditing process – costs and requirements ................................................................. 53

4.38 Auditing process – private sector demands ................................................................. 56

4.70 Electronic records ......................................................................................................... 64

4.77 Inconsistencies in the auditing process ....................................................................... 65

4.87 Poultry .......................................................................................................................... 67

Chapter five: A local approach .................................................................. 73

5.6 Fear of retribution .......................................................................................................... 74

5.14 A role for local government ......................................................................................... 76

5.28 Capacity ........................................................................................................................ 78

5.51 Non‐compliance issues ................................................................................................. 84

5.79 Earned recognition ....................................................................................................... 89

5.83 New Zealand ................................................................................................................. 90

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Chapter six: Seafood ................................................................................. 93

6.2 History ............................................................................................................................ 93

6.14 Fees .............................................................................................................................. 95

6.30 Seafood processors .................................................................................................... 101

6.38 Value for money ......................................................................................................... 102

6.63 Yabbies ....................................................................................................................... 107

6.88 Aquaculture ................................................................................................................ 111

Chapter seven: Maintaining industry reputation .................................... 113

7.11 Specialty cheese ......................................................................................................... 115

7.30 Maturing on wood ...................................................................................................... 120

7.34 Raw milk ..................................................................................................................... 121

7.45 Small versus large ....................................................................................................... 123

7.58 Wholesale ................................................................................................................... 125

7.72 Single on‐farm audits ................................................................................................. 128

7.79 Dairy audits for other requirements .......................................................................... 129

Chapter eight: Horticulture ..................................................................... 133

8.21 Other jurisdictions ...................................................................................................... 138

8.24 Seed sprouts ............................................................................................................... 139

8.35 Animal feed ................................................................................................................ 141

Chapter nine: Improving regulation ........................................................ 145

9.13 Best practice legislation ............................................................................................. 147

9.19 Message for government ........................................................................................... 149

9.26 An education and advisory role ................................................................................. 150

9.57 Earned recognition ..................................................................................................... 157

9.82 Performance reporting ............................................................................................... 161

9.98 Overcoming barriers to effective performance reporting ......................................... 164

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Appendices ............................................................................................. 167

Appendix one: References ................................................................................................. 167

Appendix two: Submissions ............................................................................................... 171

Appendix three: Public consultation program – witnesses ............................................... 173

Appendix four: Audit terms and definitions ...................................................................... 179

Appendix five: Definition of ‘food’ ..................................................................................... 181

Appendix six: Foodborne disease rates ............................................................................. 183

Rural and Regional Committee v

Members and Staff

MEMBERS

Mr Paul Weller MP, Member for Rodney (Chairman)

Mr Geoff Howard MP, Member for Ballarat East (Deputy Chair)

Mr Damian Drum MLC, Northern Victoria Region

Mr Andrew Katos MP, Member for South Barwon

Mr Ian Trezise MP, Member for Geelong

STAFF

Ms Lilian Topic, Executive Officer

Mr Patrick O’Brien, Research Officer

Ms Laura Ollington, Office Manager

CONTACT

Parliament House

East Melbourne VIC 3002

Telephone: +61 (0)3 8682 2884

Email: [email protected]

Website: www.parliament.vic.gov.au/rrc


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Rural and Regional Committee vii

Terms of Reference 57

th Parliament

Received from the Legislative Assembly on 05 June 2012 Inquiry into the Impact of Food Safety Regulation

on Farms and Other Businesses That, under s33 of the Parliamentary Committees Act 2003, an inquiry into the impact of food safety regulation on farms and other businesses regulated under the Dairy Act 2000, the Meat Industry Act 1993, and the Seafood Act 2003 be referred to the Rural and Regional Committee for consideration and report no later than 30 March 2013, and the Committee is asked to:

(1) explore the cost competitiveness to regulated businesses of food safety laws administered by PrimeSafe and Dairy Food Safety Victoria (DFSV);

(2) have a particular focus on small business;

(3) investigate and assess:

(a) the extent and appropriateness of regulatory burden impact of national primary production and processing standards on regulated businesses in Victoria;

(b) the comparison of alternative methods to assess compliance with required standards and food safety outcomes;

(c) incentives for improved performance to reduce regulatory burden such as ‘earned recognition’ systems;

(d) how regulators can support businesses to understand and achieve compliance with regulations;

(e) how regulators can promote business continuity and improved compliance where non‐compliance with regulations is identified;

(f) non‐regulatory methods for achieving required food safety outcomes;

(g) the comparison of requirements under legislation administered by PrimeSafe and DFSV with existing regulatory requirements under the Food Act 1984 for businesses with equivalent food safety risks;

(h) the comparison of requirements under legislation administered by PrimeSafe and DFSV with regulatory requirements administered by the Australian Quarantine Inspection Service for exports;

(i) the application of food safety regulations to farm‐gate sales of unprocessed and on‐farm processed produce, given the desire for some agricultural producers to innovate and value‐add on farm;

(4) consider the findings of other relevant reviews and evidence from other systems implemented either in Australia or internationally; and

(5) have regard to public health outcomes, the costs of implementation for business and government, and the facilitation of market access and exports.


viii Rural and Regional Committee

Rural and Regional Committee ix

Chairman’s Foreword

Every Victorian expects the food on their plate to be safe.

As a farmer and producer I know everyone in the food production chain wants the same thing.

Victoria’s food safety framework is designed to protect all of us by ensuring the safe production and processing of the food we eat. Strict controls exist on what food businesses can and cannot do, in order to prevent the sort of disease outbreaks and poor food quality we unfortunately hear so much about from overseas.

Two examples point to the fact that our food safety legislation is serving us well: firstly, our levels of foodborne illness are low; and secondly, Victoria has an international reputation for producing safe food of the highest quality that is second to none.

This doesn’t mean that there aren’t risks because there always will be, as we learnt recently in the Victorian dairy sector. Protection of the public is paramount.

On the other hand in Victoria figures show that the food sector makes up around 15 per cent of our economy. For that reason it is important for government to design food safety regulation that does not impose any unnecessary burden on business. Regulation should never stifle innovation or business development. What we are after is a good balance.

On the whole the evidence presented to the Committee throughout this Inquiry was positive. The national food standards, as implemented by Victoria’s two food safety regulators PrimeSafe and Dairy Food Safety Victoria, generally strike that balance between protecting public safety while allowing businesses to innovate.

Much of this positive evidence is down to the regulators themselves, who are extremely knowledgeable and take a highly professional approach to their work. Industry representatives we heard from appreciate that.

We also heard that there are improvements to be made. Parts of the food sector that present a low risk to food safety are currently regulated when they should not be. This is the case with the handling of live seafood, for example. Disputes occur between the industry and the regulator, PrimeSafe, when industry perceives that other jurisdictions have a competitive advantage. This has occurred because the national standard on seafood has


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been implemented inconsistently in jurisdictions across Australia – an issue we deal with in our Report.

The Rural and Regional Committee of course focuses on regional communities and businesses. In the case of this Inquiry, the Committee learnt that small regional food businesses are more comfortable working with local government than with Melbourne‐based regulators and auditors. The existence of ‘local knowledge’ clearly helps local government enforce its regulatory requirements in a co‐operative way. Industry desire for a local approach is reflected in the recommendations in this report.

One issue that we cannot influence directly is that of private sector Quality Assurance requirements. The onerous nature of these requirements was raised often with the Committee. My colleagues and I understand that these requirements do contribute to the burden of regulation on industry. We believe that there should be recognition by the regulators when businesses comply with these; however it is up to industry leaders to discuss and negotiate these requirements directly.

The issues raised with the Committee are examined thoroughly in this Report with recommendations made as to how the Committee believes the problems can best be resolved.

During this Inquiry the Committee heard from over 100 witnesses, at nine public hearings, received 56 submissions, undertook consultations in South Australia and carried out ten site visits. I thank our witnesses and those who made submissions to the Committee’s Inquiry. In particular, I thank the business owners who welcomed us into their premises to learn first‐hand about the way in which they contribute to Victoria’s vibrant food economy. That practical knowledge was invaluable in shaping this Final Report.

I thank the members of the Committee for their hard work and commitment to finding solutions that will benefit all Victorians.

On behalf of my Committee colleagues I wish to thank our dedicated Secretariat staff, Lilian Topic, Patrick O’Brien and Laura Ollington, for their support during this Inquiry.

I believe this Report reflects the evidence we heard and provides practical recommendations on ways of improving our food safety framework.

I commend the Report to the Parliament.

Paul Weller MP

Chairman

March 2013

Rural and Regional Committee xi

Executive Summary

CHAPTER 1: WHY REGULATE?

Regulation of food production is necessary and welcome by the Victorian food production industry, from large manufacturers to small producers. In this context the Rural and Regional Committee heard many times of the importance of protecting both the quality of food produced and the reputation of Victoria’s food industry.

The Committee’s Final Report into the Impact of Food Safety Regulation on Farms and Other Businesses is aimed at four main groups:

Victoria’s food safety regulators (Dairy Food Safety Victoria and PrimeSafe) Government departments (Department of Primary Industries and Department of

Health) Statutory bodies (such as the Victorian Competition and Efficiency Commission and

the Victorian Auditor‐General’s Office) The food production industry (primary producers and processors).

The first four chapters outline theories underpinning food safety regulation and explain the food safety framework in Australia and Victoria. These chapters also discuss our approach to regulation and include an analysis of issues such as inconsistent application of federal regulation and duplication of regulatory and private sector demands.

Much of the substance of these chapters will be familiar to regulators, statutory bodies and government departments. Regardless, there remain points of interest in these chapters for everyone involved in the production of safe food in Victoria.

Food safety regulation exists first and foremost to protect public health. Historically there have been instances where consumers have died because of unsafe food either from poor production standards or lack of knowledge about proper handling practices. Although the market can and does drive food safety, there remains a vital role for regulation. Legislation can also be designed to achieve other outcomes desired by society, including market access and industry growth.


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The benefits of regulation must outweigh the costs. Measuring the costs, however, can be difficult. For example, it can be hard to distinguish processes a business would implement as part of normal practice from those implemented solely because they are mandated by legislation.

Food imported into Australia must meet the same general food safety standards outlined in the Australia New Zealand Food Standards Code as food produced in Australia. With the exception of some dairy products imported food is not required to meet the same Primary Production and Processing Standards as locally produced food. However, the Committee heard that supermarkets test both imported food and locally produced food to their standards.

CHAPTER 2: HOW WE REGULATE

Agricultural food safety covers the primary production and processing of raw agricultural products on farm, during transportation and in processing facilities. Government should consider all options, including codes of practice, standards and guidelines, and legislation when devising approaches to food safety.

A risk‐based approach to legislation aims to identify, measure and monitor risk, with a view to allocating resources where they are most needed and ensuring legislation is as effective as possible. Jurisdictions in Australia have committed to risk‐based regulation, including in Victoria where the concept is well understood by the food safety regulators, statutory bodies and government departments.

Jurisdictions in Australia have agreed to take an outcomes‐based approach to regulation, so as to encourage innovation while still maintaining the safe production of food. However, individual jurisdictions may favour a more prescriptive approach, which is by nature easier to regulate.

In Australia, food safety regulation is set at a national level and given effect by the states and territories. There is inconsistent application of the national standards across jurisdictions. The Committee heard that factors such as Australia’s size and climactic variation mean this inconsistency is at times unavoidable and indeed can be based on good scientific practices. However, the Committee heard that inconsistency can impede business development or lead to competitive advantages, particularly for businesses operating across borders.

Governments and regulators are both participants in our system of food safety regulation. The final decision on what to regulate remains with government, while regulators determine how legislation is implemented.

CHAPTER 3: AUSTRALIA’S FOOD SAFETY FRAMEWORK

Australia’s Food Standards Code, including the Primary Production and Processing Standards, is developed by Food Standards Australia and New Zealand (FSANZ). These national standards are given effect in the form of legislation at state level. In Victoria, the relevant acts are the Food Act 1984, Meat Industry Act 1993, Dairy Act 2000 and Seafood Safety Act 2003.

Primary Production and Processing Standards have been developed for:

Executive Summary

Rural and Regional Committee xiii

Seafood Poultry Meat products Dairy (including raw milk products) Eggs Seed sprouts (to commence July 2013).

It is expected that standards will also be developed for horticulture, grains, honey and meat (on‐farm) by FSANZ.

Food safety in Victoria is the responsibility of the Department of Primary Industries, the Department of Health and the two independent regulators, PrimeSafe (meat, poultry and seafood) and Dairy Food Safety Victoria (dairy farmers and manufacturers). These bodies contribute members to the Victorian Committee of Food Regulators, which was established in 2010 to strengthen existing arrangements between the food regulators and government.

Measuring the effectiveness of food safety regulation is problematic because:

Food safety is affected by many factors, including cross‐contamination caused by improper food handling in the home and in restaurants

Mild illnesses often remain unreported Detecting trends in data is difficult.

Regardless, evidence viewed by the Committee suggests that the food safety framework in Victoria is highly effective.

CHAPTER 4: HOW THE AUDITING PROCESS WORKS

Food safety programs – written documents outlining the ways in which a food business will identify and eliminate risks to food safety – form the core of Australia’s food safety framework. They are required for businesses at all stages of the food production chain. Food safety programs are audited at frequencies determined by the regulators, either by third party approved auditors or the regulators themselves. The cost of auditing includes auditors fees which for regional Victoria includes travel time as well as time spent preparing for and responding to the audits.

An increased use of electronic records would ease the auditing burden.

Inconsistencies in the auditing process can occur as a result of the practice of individual auditors not auditing a business on more than three occasions. On the other hand this practice exists to prevent potential conflicts of interest between auditors and businesses.

Primary producers must also meet private sector Quality Assurance standards. Claims of industry being ‘over‐regulated’ are frequently referring to the burden of meeting these private sector standards, in particular the duplication that occurs when supplying multiple customers each with their own Quality Assurance program. It is the responsibility of the private sector to reduce this duplication. In Victoria, the poultry industry offers a pertinent case study of ‘over‐regulation’.

The Committee determined that private sector standards, however high, should not replace regulated standards. However, it also learnt that the food safety regulators in Victoria agree with the principle of recognising private sector standards where it is safe to do so.


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The Committee has recommended:

That the Minister for Agriculture and Food Security work with PrimeSafe to accredit more regional‐based auditors in Victoria and introduce a transparent process outlining the requirements for becoming an approved PrimeSafe auditor

That the Minister for Agriculture and Food Security work with PrimeSafe and Dairy Food Safety Victoria to recognise private sector food safety standards where it is safe to do so

That the Minister for Agriculture and Food Security, the Department of Primary Industries and the Department of Health work with Dairy Food Safety Victoria and PrimeSafe to promote the increased use of electronic records for food safety audits.

CHAPTER 5: A LOCAL APPROACH

Although the overwhelming majority of evidence received by the Committee regarding the food safety system in Victoria and its regulators was positive, pockets of frustration exist. These most commonly occur where regulators operate in areas where there is not a ‘natural fit’; that is, where legislation requires regulators to engage with small businesses who either should not be regulated or who would be better served being monitored by local councils.

The Committee believes that responsibility for monitoring all retail food businesses, including butchers, should be returned to local government. This is because:

There is an inconsistency in local government auditing all food in supermarkets but not retail butchers, seafood or poultry businesses

Small rural businesses are generally more comfortable dealing with local government than Melbourne‐based regulators and auditors

Local government is well placed to understand the needs of regional businesses.

Evidence received by the Committee suggests that local councils, which currently monitor supermarkets, have both the capacity and skill required to take on this responsibility.

This chapter includes a discussion of the repercussions of non‐compliance in the food industry.


That the Minister for Agriculture and Food Security consider transferring responsibility for registering and auditing all food retail businesses to local government, including butchers, fresh seafood and poultry retailers. However, further advice should be sought by government in relation to retail businesses that also process food, for example smallgoods.

CHAPTER 6: SEAFOOD

The seafood industry was brought under the Seafood Safety Act 2003 as enforced by PrimeSafe in 2003. Prior to this retail and seafood processing businesses were regulated for food safety purposes under the Food Act 1984 with local councils responsible for enforcement. The wildcatch and aquaculture sectors were not regulated for food safety purposes.

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Rural and Regional Committee xv

Although the seafood industry was consulted during this process, the Committee has observed that portions of the industry felt that the consultation was not comprehensive. Remnants of this frustration remain today and are apparent in many of the disputes between industry and PrimeSafe.

Industry complaints about PrimeSafe’s fee structure revolve around:

The level of fees in Victoria in relation to those paid by other states Whether the fees accurately reflect risk For processors, why fees are not based solely on the amount processed.

Evidence presented to the Committee suggests that, unlike in Victoria, other states do not operate a full cost‐recovery model, nor do they regulate the whole of the supply chain.

Live seafood presents very little risk to food safety, with the risk starting at the processing stage. Regulating low risk sectors, including imposing fees, creates animosity in these sectors – often expressed in terms of fees being an ‘unnecessary burden’. Such a situation contradicts a tenet of good regulation: the benefits of regulation should outweigh the costs.

Yabbies are another low risk product where regulation has created animosity between the sector and PrimeSafe. Of particular concern is the issue of purging yabbies. Until recently, purging was a PrimeSafe requirement, despite not being required in other jurisdictions in Australia.


That PrimeSafe base its seafood processing fees on the amount of seafood processed That for businesses audited by DAFF Biosecurity the Minister for Agriculture and

Food Security work with PrimeSafe to replace current requirements for full registration with PrimeSafe with a nominal fee

That the state government remove the regulatory requirements around the handling of live seafood and yabbies in Victoria

That the state government encourage the development of aquaculture in Victoria through devising a more graduated scale of processing fees that reflect the industry’s small production rates.

CHAPTER 7: MAINTAINING INDUSTRY REPUTATION

The dairy industry in Victoria is conscious of the need to protect its national and international reputation as a producer of safe food. Food safety regulation plays an important role in protecting this reputation, as do fee‐related cross‐subsidies from big manufacturers to small manufacturers.

Dairy Food Safety Victoria has a close working relationship with the specialty cheese sector in Victoria. The regulator is committed to the development of this sector, while recognising that growth must not occur at the expense of food safety. Ongoing issues in the specialty cheese sector include the practice of maturing cheese on wood and the use of raw milk in products such as soft cheeses.

As a general rule issues most frequently arise over the use of new or unique manufacturing processes. However, the Committee is keen to acknowledge the high overall level of satisfaction with the regulator across the dairy industry in Victoria and congratulates Dairy


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Food Safety Victoria for its commitment to co‐operation with the specialty cheese sector in particular.

Dairy Australia is calling for an increased use of single on‐farm audits that meet multiple requirements – including food safety legislation, environmental standards and private sector Quality Assurance programs – to reduce the number of audits required and simplify the auditing process. The Committee has made no recommendation about this issue as it understands that it is an ongoing area of discussion between Dairy Food Safety Victoria and dairy farmers and manufacturers.


That the Minister for Agriculture and Food Security work with Dairy Food Safety Victoria to clarify the definition of small processors in Appendix A of the Memorandum of Understanding between Dairy Food Safety Victoria, PrimeSafe, the Department of Health and the Municipal Association of Victoria.

CHAPTER 8: HORTICULTURE

The horticulture sector is not covered by a national standard. Instead businesses refer to a combination of: food safety guidelines developed by Commonwealth and state agencies; and private sector Quality Assurance programs. A horticulture Primary Production and Processing Standard is being developed by FSANZ. However, the Committee agrees with the Victorian Government that the low risk presented by horticulture means the imposition of a national standard is not justified.

The Primary Production and Processing Standard for seed sprouts will commence on 12 July 2013. The Committee questions the effectiveness of the standard and whether FSANZ fully adhered to the principles of risk‐based regulation in its development. However, the Committee sees the benefit of developing product traceability methods.


That the Minister for Agriculture and Food Security lobby FSANZ not to introduce a Primary Production and Processing Standard for the horticulture sector

That the Minister for Agriculture and Food Security work with other states across Australia to introduce a national Product Identification Code (PIC) number for the horticulture industry in place of increasing regulatory requirements.

CHAPTER 9: IMPROVING REGULATION

A key finding of this Inquiry is that the goal of food safety can coexist with that of business innovation and growth. The Committee believes that both PrimeSafe and Dairy Food Safety Victoria, to varying degrees, understand this and work towards achieving this joint outcome, while acknowledging that the protection of public health must always take precedence.

The Committee accepts that the principles of best practice regulation are well understood in Victoria. However, food safety regulation is not completely ‘owned’ by the Victorian Government because standards are developed at a national level, albeit with input from jurisdictions including the Victorian Government. The Committee supports the Victorian Government’s commitment to ensuring that FSANZ adheres to the principles of best practice regulation at all times.

Executive Summary

Rural and Regional Committee xvii

Many small businesses have asked for the food safety regulators to broaden their education and advisory role in regard to meeting regulations. The Committee appreciates that the regulators need businesses to prove competency in understanding legislated requirements but believes more advice could be provided, especially to small businesses.

Earned recognition is an approach to enforcement that recognises and rewards compliance efforts made by individuals and businesses. The Committee observed that the principles of earned recognition are understood by the food safety regulators and government departments in Victoria and, to a certain extent, applied. However, it believes that with food safety regulation earned recognition could be more widely used in Victoria. For example, it may be possible to extend the time between audits for businesses that regularly prove their competency in producing safe food. The Committee believes that government could look to New South Wales for examples.

Performance reporting by regulators refers to measuring the efficacy of food safety legislation and how the regulators’ actions improve food safety. As observed in Chapter 3, measuring the effectiveness of food safety regulation is problematic because:

Food safety is affected by many factors, including cross‐contamination caused by improper food handling in the home and in restaurants

Mild illnesses often remain unreported Detecting trends in data is difficult.

The Committee appreciates the complexities and challenges regulators face in developing a robust performance reporting system and recognises the work already done in this area. It encourages the regulators to continue the process of developing a performance reporting system that contributes to an understanding of the way in which Victoria’s food safety framework aids the continued production of safe food.


The Minister for Agriculture and Food Safety should take the key messages to FSANZ that risk‐based analysis and a consideration of non‐regulatory approaches should be employed when developing further Primary Production and Processing Standards

That the Department of Primary Industries work with Dairy Food Safety Victoria and PrimeSafe to extend the use of earned recognition principles in Victoria

That as part of the regulators’ use of earned recognition principles the Minister for Agriculture and Food Security work with Dairy Food Safety Victoria and PrimeSafe to become advisory as well as ‘policing’ organisations

That Dairy Food Safety Victoria and PrimeSafe develop a performance reporting strategy for presentation to the Minister for Agriculture and Food Security.


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Recommendations RECOMMENDATION 1

That the Minister for Agriculture and Food Security work with PrimeSafe to:

Accredit more regional‐based auditors in Victoria. It is expected that the increased competition and reduced travel time will lower the costs of auditing for regional‐based businesses

Introduce a transparent process outlining the requirements to becoming an approved PrimeSafe auditor.

4.37

RECOMMENDATION 2

That the Minister for Agriculture and Food Security work with PrimeSafe and Dairy Food Safety Victoria to recognise private sector food safety standards where it is safe to do so, as one approach to minimising the cost of compliance faced by farms and other food businesses.

4.69

RECOMMENDATION 3

That the Minister for Agriculture and Food Security, the Department of Primary Industries and the Department of Health, work with Dairy Food Safety Victoria and PrimeSafe to promote the increased use of electronic records for food safety audits.

4.76

RECOMMENDATION 4

That the Minister for Agriculture and Food Security consider transferring responsibility for registering and auditing all food retail businesses to local government, including butchers, fresh seafood and poultry retailers. This responsibility would also include registering all meat and seafood transport vehicles.

Further advice should be sought by government in relation to retail businesses that also process food, for example smallgoods.

5.50


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RECOMMENDATION 5

That PrimeSafe base its seafood processing fees on the amount of seafood processed, in accordance with its own definition of ‘throughput’ as the weight of seafood product brought into the facility for processing.

6.37

RECOMMENDATION 6

That the Minister for Agriculture and Food Security work with PrimeSafe to replace current requirements for full registration with PrimeSafe with a nominal fee, for businesses audited by DAFF Biosecurity, including when these businesses sell product in Victoria.

6.41

RECOMMENDATION 7

That the state government remove the regulatory requirements around the handling of live seafood in Victoria, in a way that is consistent with the approach taken in other states in Australia.

6.62

RECOMMENDATION 8

That the state government manage the yabby industry in Victoria, in a way that is consistent with the approach taken in other states in Australia. This approach should include ensuring the quality of water used for production.

6.87

RECOMMENDATION 9

That the state government work with PrimeSafe to encourage the development of aquaculture in Victoria through devising a more graduated scale of processing fees in recognition of the low production rates in the industry.

6.91

RECOMMENDATION 10


7.65

RECOMMENDATION 11

That the Minister for Agriculture and Food Security lobby FSANZ not to introduce Primary Production and Processing Standards for the horticulture sector.

8.20

Recommendations

Rural and Regional Committee xxi

RECOMMENDATION 12

That the Minister for Agriculture and Food Security work with the Standing Council on Primary Industries to introduce a national Product Identification Code (PIC) number for the horticulture industry in place of increasing regulatory requirements.

8.20

RECOMMENDATION 13

That the Minister for Agriculture and Food Security take the key messages to FSANZ:

That a high standard of evidence and risk‐based analysis is used in its consideration of further Primary Production and Processing Standards

That non‐regulatory approaches to improving food safety should be employed, where it is safe to do so, before considering additional legislation.

9.17

RECOMMENDATION 14

That the Department of Primary Industries work with Dairy Food Safety Victoria and PrimeSafe to extend the use of earned recognition principles in Victoria, to determine if opportunities exist for a reduction in food safety audit frequency, in particular in low risk areas. Any earned recognition system should be transparent so businesses can easily understand what is required to achieve a reduction in food safety audit frequency. The regulators may consider implementing a points‐based system based on the New South Wales model described at 9.68–9.72.

9.81

RECOMMENDATION 15

That as part of the regulators’ use of earned recognition principles the Minister for Agriculture and Food Security work with Dairy Food Safety Victoria and PrimeSafe to become advisory as well as ‘policing’ organisations, as requested by industry. This would also allow industry to educate the regulators about product developments, new processes and non‐regulatory ways of improving food safety outcomes in Victoria.

9.81

RECOMMENDATION 16

That Dairy Food Safety Victoria and PrimeSafe develop a performance reporting strategy for presentation to the Minister for Agriculture and Food Security, in line with previous recommendations from the Victorian Auditor‐General’s Office and the Victorian Competition and Efficiency Commission.

9.109


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Rural and Regional Committee 1

Why regulate?

KEY MESSAGES

Effective food safety regulation has a primary goal: ensuring the production of safe food. It can also protect the reputation of industries, individual producers and regional food production areas.

The cost of regulation to business includes compliance costs, financial costs, staff costs and market costs; and the benefits of regulation must outweigh the costs.

More information on how regulation improves food safety would be valuable, for example through performance reporting.

Industry, consumers and government expect that all food sold in Australia, whether local or imported, meets the same standards.

‘Modern food regulation encompasses food safety, food quality, consumer information, and protection against deceptive and misleading conduct. However, consumer demands and food technologies are constantly evolving requiring continual review of both food law and alternative approaches. In an evolving environment it is important to ensure that the needs and expectations of consumers and the food industry are always under consideration and where possible, are met.’ Victorian Committee of Food Regulators

“No‐one wants to sell crook meat because you lose business; that is your livelihood.” Mr Nathan Wolter, Wodonga


2 Rural and Regional Committee

1.1 Throughout this Inquiry on food safety regulation industry was united in sending one message to the Committee: regulation of food production is necessary and welcome. From large manufacturers to small producers there was agreement on the importance of protecting both the quality of food produced and the reputation of Victoria’s food industry.

1.2 The exceptions were the wildcatch seafood sector, yabbies and the poultry sector which questioned current regulations based on the low risk those industries are said to present.

1.3 What was less certain, though, was defining the exact role of government in food safety regulation and how it can remain relevant to the needs of consumers and industry.

1.4 This chapter spells out exactly why regulation is necessary in the context of advice received by the Committee from regulators and representatives of the food industry.

1.5 The Committee was guided throughout the Inquiry by its Terms of Reference, which can be found at page vii.

THE COMMITTEE’S APPROACH

1.6 This Inquiry required the Committee to seek advice from across the food production sector from those with expertise in food safety regulation. Evidence was received from retail businesses; producers and manufacturers; industry; and government.

1.7 As with all Inquiries referred to the Rural and Regional Committee the focus stayed on the rural and regional dimensions of the issues, in this case concerning food safety regulation.

1.8 It must be noted that the evidence received by the Committee was sometimes inconsistent, perhaps due to a lack of information flow between regulators, government and industry.

1.9 When drafting Recommendations for this Inquiry the Committee considered whether to make recommendations directly to PrimeSafe and Dairy Food Safety Victoria to take action or to the Minister for Agriculture and Food Security. The Committee's Recommendations call for changes or adjustments to the current food safety regulation system in Victoria which we believe would be of benefit to industry; regulators; government and the public. It is the Committee’s view that there is sufficient merit in implementing the changes suggested to warrant either a review of legislation or a rewording of the Ministerial Statement of Expectations. The majority of the Recommendations are therefore directed at the Minister, and call for him to work with PrimeSafe and Dairy Food Safety Victoria to achieve the required result.

Chapter one: Why regulate?


WHY REGULATE?

1.10 The question as to why governments regulate food safety has several answers. The first is perhaps the most obvious: protecting the public. Society expects government and industry to work together to provide safe food and consumers should not have to understand every single process involved in the production and processing of a food product in order to trust that product.1 Governments have a responsibility to oversee the production of food, to ensure all food being sold is safe for consumption. Equally, food producers must be vigilant in ensuring their systems are correct and procedures are in place to minimise risk.

1.11 The Committee was impressed with the high standards of Victoria’s food production sector as witnessed during several site visits throughout this Inquiry. It should also be noted that risks can occur at any stage of the supply chain – from ‘paddock to plate’. However, evidence shows that the majority of foodborne illnesses occur as a result of actions post‐sale, including in the home, via incorrect handling or cooking practices.2

1.12 The Committee believes that market incentives work well for businesses with a good understanding of regulation and the capacity to comply. Food safety standards are driven by factors such as competition in the market place for safe food. Businesses must also remain aware of the damage to their reputation and loss of market share that comes from selling unsafe food.

1.13 Much of the literature on food safety in Australia makes reference to the damage caused to the seafood industry by the Wallis Lake oysters outbreak in 1997 and the harm done to the smallgoods industry by the ‘Garibaldi outbreak’ in 1995, both of which caused deaths. The recent listeria outbreaks associated with Jindi Cheese are another reminder of potential threats to the reputation of a food production industry.

1.14 Several witnesses explained to the Committee how customer expectations drive food safety standards.3 The Committee heard from food businesses, both big and small, based in rural and regional Victoria for whom this consideration is paramount. This is especially the case for those small businesses that forge close relationships with their customers.

1.15 Ms Sue McGorlick, Owner of Locheilan Cheese, told the Committee:

We sell most of our cheese ourselves and I look my customers in the eye and say, ‘Here is something that is really yummy; please buy it from me’. If they end up getting sick, I have to look them in the eye … the whole of the [food safety regulation] process seems to be based

1 Victorian Competition and Efficiency Commission, Simplifying the Menu: Food regulation in Victoria, Victorian Competition and Efficiency Commission, Melbourne, 2007.

2 Victorian Auditor‐General’s Office, Agricultural Food Safety, Victorian Government, Melbourne, 2012; Victorian Government, Submission, Number 45, 17 September 2012.

3 Mr Julian Benson, Owner, Apostle Whey Cheese, Public Hearing, Camperdown, 19 September 2012; Mr Simon Schulz, Owner, Schulz Organic Farms, Public Hearing, Camperdown, 19 September 2012; Mr Lisle Elleway, Owner, Veteran Fishing, Public Hearing, Portland, 20 September 2012; Ms Jeanne Kelly, Owner, Arrow Fisheries, Public Hearing, Portland, 20 September 2012.



on an assumption that we are going to do the wrong thing and we need to be able to prove that we are doing the right thing. The proof to me is looking the customer in the eye with confidence.4

1.16 The role of the customer is particularly relevant given the speed at which information now travels through social media such as Facebook and Twitter. Mr Allen Snaith, Owner of Warialda Belted Galloway Beef, suggested that customers on social media can make a more rapid judgement on food businesses than the regulators:

Like the other speakers before me, I have a face‐to‐face relationship with my customer; it is in my best interests, obviously, I cannot hide behind a lawyer; I cannot hide behind a big budget for legal action. Every customer that walks away from me is more important than a PrimeSafe inspector because they can shut me down on Facebook or Twitter and I can be out of business overnight. Am I going to do the wrong thing? I think not.5

1.17 A similar point was made by Mr Chris Melville, Dairy Manager at Aussie Farmers Dairy, who told the Committee: “All of our customers now are online. A good thing that drives us in terms of compliance is that our customer base is very fluid and online. If we have got something wrong, they are tweeting it; they are all over it.”6

1.18 Other drivers of food safety include pressure from higher up the supply chain. This is particularly the case with the suppliers to our major supermarkets, who must comply with myriad different standards and requirements. This subject is discussed in Chapter 4.

1.19 Yet markets are not perfect and public confidence in food safety is not impregnable. Although Australia has largely been immune from significant outbreaks of foodborne illness and diseases such as bovine spongiform encephalopathy (BSE, or ‘mad cow disease’), there is an acute awareness in the food production industry in Victoria that a single incident can quickly damage individual businesses, entire industry sectors or even Australia’s reputation overseas as a supplier of safe food.7

1.20 Mr Ian Halliday, Managing Director, Dairy Australia told the Committee: “… if there is a product being produced and it is not done so in a way that protects the overall safety of dairy products, we will all suffer the consequences, so it is very important that that safety is preserved”.8

1.21 This means that governments have good reasons to: determine and monitor minimum food safety standards that lower the risk that outbreaks will occur; and act in cases of market failure. Other reasons include:

4 Ms Sue McGorlick, Owner, Locheilan Cheese, Public Hearing, Castlemaine, 5 September 2012. 5 Mr Allen Snaith, Owner, Warialda Belted Galloway Beef, Public Hearing, Castlemaine, 5 September 2012. 6 Mr Chris Melville, Dairy Manager, Aussie Farmers Dairy, Public Hearing, Melbourne, 12 November 2012. 7 Victorian Competition and Efficiency Commission, Regulation and Regional Victoria: Challenges and opportunities, Victorian Competition and Efficiency Commission, Melbourne, 2005; Victorian Government, Submission, Number 45, 17 September 2012.

8 Mr Ian Halliday, Managing Director, Dairy Australia, Public Hearing, Melbourne, 22 October 2012.



If tracking an outbreak to its source is difficult, some food producers may see this as an opportunity to operate with lower standards9

One business acting with lower standards can damage a whole industry – as well as a regional area with a reputation for food production that is dependent on agriculture and food industries – making the case for collective action10

Changing food production processes can be linked with the appearance of new foodborne pathogens in the supply chain11

Consumer demand is growing for minimally processed foods (which present more risk) in our diets.12

THE COST OF REGULATING

‘Farmers do not have the luxury to pass on additional costs incurred; therefore efficient regulation is extremely important.’ Victorian Farmers Federation13

1.22 The costs of not regulating – compromises to public safety, lack of industry protection and market access – are the reasons why governments regulate food safety. This is well understood by government and industry as the Committee heard many times during this Inquiry.

1.23 However, the benefits of regulation must outweigh the costs to industry and the community – governments must find a balance between reducing risk and imposing costs. Understanding the costs of compliance allows governments to judge the effectiveness of regulation and focus resources where they are most needed. This section of the Report provides a general picture of the cost of food safety regulation.

1.24 Food safety imposes fixed costs on businesses, such as training and development, record keeping, audits, and fees paid to regulators. There are also time costs of staff devoted to maintaining Quality Assurance programs. As with most business costs ‘… the smaller the businesses, the larger the relative burden’.14

1.25 Costs to businesses can be:

Administrative costs (‘red tape’) Compliance costs (such as buying and maintaining new equipment and training

– these must be in addition to what a business would usually pay in order to operate15)

9 Victorian Competition and Efficiency Commission, above n 1. 10 Victorian Competition and Efficiency Commission, above n 7. 11 Hall G, D’Souza R and Kirk M, ‘Food disease in the new millennium: out of the frying pan and into the fire?’, Medical Journal of Australia, 2002, Vol. 177, pp 614–618.

12 See: www.foodstandards.gov.au/scienceandeducation/publications/annualreport/fsanzannualreport20032004/ ourregulatorymeasures/assessingapplication2758.cfm

13 Victorian Farmers Federation, Submission, Number 41, 10 September 2012, p 1. 14 Food Regulation Standing Committee of the Australia and New Zealand Food Regulation Ministerial Council, ‘Protocol for the development of Primary Production and Processing Standards by FSANZ’.

15 For example, the Productivity Commission found that the compliance costs for the shellfish industry may be low because businesses would already be meeting much of the national standard (4.2.1): Productivity Commission, Performance



Financial costs (transferring money to government or an authority) Indirect / market costs, which cover the impact regulation has on the overall

market or consumption patterns (for example, legislation that favours inefficient production methods or restricts competition).

1.26 In Victoria, the Department of Treasury and Finance classifies costs as:

Compliance costs (it includes administrative / ‘red tape’ costs here) Financial costs Delay costs (expenses and loss of income while applying and waiting for

approval) Indirect / market costs.

1.27 The two food safety regulators in Victoria, PrimeSafe and Dairy Food Safety Victoria, both operate a cost‐recovery system by charging fees to the industries they regulate. (According to Annual Reports for PrimeSafe in 2011/12 the total income from transactions was $2,048,015 and for Dairy Food Safety Victoria in 2011/12 this figure was $5,015,346.) Neither organisation receives any government funding.

1.28 In 2007, the Victorian Competition and Efficiency Commission (VCEC) found that the cost of Victorian food regulation, to both government and business, is ‘… small relative to industry turnover’ (roughly 0.3 per cent of turnover). It is also important to note:

Imposing more extensive requirements may not necessarily imply unnecessary costs, if the benefits outweigh the costs

In any survey of food businesses, costs are determined by the size and complexity of the businesses surveyed, making direct comparisons problematic.

1.29 It also found that:

Precise figures on administrative costs are hard to find. However, VCEC estimated that for the food production industry in Victoria ‘… such costs are relatively small’ but still comprise the majority of food safety costs for businesses

Commercial requirements or market forces (for example, contracts between supermarkets and suppliers) are increasingly driving compliance costs, as opposed to regulations. This means that many companies operate to a higher standard than that required by regulations, such that the regulations impose ‘little, if any, additional cost’ over that incurred meeting commercial requirements16 (also see Chapter 4)

However, it is important not to ‘over‐regulate’ – an example may be requiring businesses to prove to regulators what they have already proven to the market through a Quality Assurance scheme, internal risk management policies or simply through good business practices

Benchmarking of Australian and New Zealand Business Regulation: Food safety, Commonwealth of Australia, Canberra, 2009.

16 Victorian Competition and Efficiency Commission, above n 1, 129.



Reviews found that regulation, especially regarding hygiene, can actually increase an industry’s competitive strength.

1.30 However, VCEC also found that defining the costs and measuring the benefits of food safety regulation is difficult because of a number of factors, such as:

Many practices – such as basic cleaning regimes, for example – would most likely be done by businesses as part of their normal operations regardless of regulation (due to factors such as professional pride and commercial pressures)

It may not be clear if food businesses already behaved in ways consistent with the regulation before it was introduced, therefore making it difficult to measure behaviour change

Isolating the effects of regulation from other factors, such as education campaigns, is problematic

Government and industry need to determine how much consumers are willing to pay for safe food, what VCEC describes as ‘… the value that consumers place on the outcome of the intervention’.17

1.31 The Victorian Auditor‐General’s Office reported on food safety regulation in 2012, although with a focus on the way in which the regulators enforce legislation, as opposed to the impact of the legislation itself. It found that both Dairy Food Safety Victoria and PrimeSafe operate in an efficient and effective way but should do more to explain how their actions improve food safety in Victoria. This is referred to as ‘performance reporting’ (see Chapter 9).18

1.32 Overall the Committee heard mixed views from food businesses about the level of fees paid to meet regulatory requirements, with small businesses generally more likely to be concerned than large businesses. This is because, although in many cases the regulators’ fees are determined by a company’s production levels, the overall cost of meeting food safety regulation also includes audit fees (including private sector Quality Assurance programs) and the cost of maintaining records. These costs are a relatively greater impost on small businesses. Further discussion of this issue can be found in Chapter 4.

IMPORTED PRODUCTS AND DOMESTIC PRODUCTION – MYTH VERSUS REALITY

1.33 Throughout this Inquiry the Committee heard concern that food imported into Australia is:

Of a poorer quality than locally produced food Not assessed to the same standards as locally produced food.19

17 Ibid. 18 Victorian Auditor‐General’s Office, above n 2. 19 Ms Michelle Hill, Quality Assurance Manager, Warrnambool Cheese and Butter, Public Hearing, Camperdown, 19 September 2012; Mr Adrian Hoffmann, Member, Sustainable Agriculture and Communities Alliance, Public Hearing, Camperdown, 19 September 2012; Mr Gary Everett, prime lamb producer, Public Hearing, Portland, 20 September 2012; Ms Kim Bailey, Administrative Officer, Southern Canning, Public Hearing, Portland, 20 September 2012; Mr William Bulmer, Member, East Gippsland Food Cluster, Public Hearing, Bairnsdale, 17 October 2012; Cr Michael Freshwater,



(These two concerns were frequently combined into one generic comment by witnesses i.e. ‘Imported products are not as good as Australian products.’)

1.34 The evidence presented by Mr Reg Weine, Chief Executive Officer, Bulla was similar to that of other witnesses:

Again, it is hard to talk about specifics from a fact base, but there are certainly a number of imported products coming into the market increasingly that we compete with; ice‐cream is one. And I think it is fair to say that some of the standards imposed on those products are somewhat different from perhaps what we would face. There is also food labelling legislation that seems to not apply to some of those products coming in; therefore they can have a competitive advantage in that sense. We are seeing, for instance, the two big retailers in this market – around their thrust behind the private label – increasingly being prepared to import ice‐cream products from other parts of the world. So there is ice‐cream coming in from Spain, there is ice‐cream coming in from Germany and just this week I think some products have come in from the US.

The CHAIR — And the standards that they have to meet are not equivalent to the standards we have to meet here in Australia?

Mr WEINE — Yes, potentially. I am not familiar with the country‐specific regulations for each of the markets from where those products originate, but I am sure that would be the case in some instances.20

1.35 These two topics – food quality and assessment for food safety – although distinct were frequently conflated by witnesses. It is clear that industry does not have a clear understanding of whether imported food has to meet the exact food safety standards as locally produced food.

1.36 It is also important to note that much of the evidence on this issue of the potential difference in standards between imported food and domestic food – presented to the Committee as well as other reports viewed by the Committee – is anecdotal. Nevertheless the Committee was intent on hearing the views of food producers in order to be informed by their experience.

1.37 Food imported into Australia must meet requirements under the Quarantine Act 1908 and the Imported Food Control Act 1992, with the latter covering compliance with the Australia New Zealand Food Standards Code.21 The Department of

Councillor, East Gippsland Shire Council, Public Hearing, Bairnsdale, 17 October 2012; Mr David McKerrell, Member, East Gippsland Food Cluster, Public Hearing, Bairnsdale, 17 October 2012; Ms Ceridwen Brown, Assistant General Manager, Milawa Cheese Factory, Public Hearing, Wangaratta, 22 November 2012; Mr Peter Thrum, Chief Financial Officer, Benalla Abattoirs, Public Hearing, Wangaratta, 22 November 2012.

20 Mr Reg Weine, Chief Executive Officer, Bulla, Public Hearing, Melbourne, 22 October 2012. 21 The Australia New Zealand Food Standards Code is discussed in Chapter 3.



Agriculture, Fisheries and Forestry (DAFF) has responsibility for monitoring imported food under the Imported Food Inspection Scheme.

1.38 The Department takes a two‐tiered risk‐based approach:

‘Risk category’ food, with the potential to pose a medium or high risk to public health and safety, is initially inspected at the rate of 100 per cent of consignments, gradually reducing to five per cent of consignments if good compliance is demonstrated by a manufacturer

‘Surveillance category’ food, which poses a low risk to public health and safety, has a five per cent chance of being inspected.22

1.39 When an imported food is found to be non‐compliant with the Code, it is treated, destroyed or returned to its country of origin. The inspection rate is then lifted to 100 per cent of consignments until good compliance is demonstrated.

1.40 For ‘surveillance category’ foods, DAFF is generally testing for compliance with specific food standards contained within Chapter 1 (General Food Standards) and Chapter 2 (Food Product Standards) of the Code. DAFF generally does not test imported foods against Chapter 3 (Food Safety Standards) and Chapter 4 (Primary Production Standards). However, DAFF does reference Chapter 4 for dairy products with regards to compliance with processing requirements for unpasteurised milk cheeses.23

1.41 According to Dairy Food Safety Victoria dairy products that are imported into Australia must comply with the Food Safety Australia New Zealand (FSANZ) national standard for dairy products (4.2.4). This standard allows the importing and local production of raw milk hard, low moisture cheeses such as parmesan. This standard does not allow the production of any other raw milk products in Australia and therefore they cannot be imported.

1.42 However, there is one exception to the import restriction and that is the soft blue cheese – Roquefort. The standard does not allow the production of this type of cheese in Australia but it can be imported.

1.43 According to Dairy Food Safety Victoria, due to controls on the naming of Roquefort and the way in which it is produced, it is highly unlikely that it could be produced in Australia.

1.44 The national standard referred to above allows states to use an exemption clause to enable raw milk products to be produced in their state. Some states, not Victoria, use this to allow the production of raw goat milk for drinking. FSANZ reviewed this in 2012 and determined that raw milk (cow and goat) for drinking presented an unacceptably high risk. It is currently understood in the industry that FSANZ plans to remove the exemption clause.24

22 See: www.daff.gov.au/aqis/import/food/inspection‐scheme. 23 Personal Communication, Mr Mark Phythian, Director, Imported Food Program, Border Compliance Division, DAFF, 4 December 2012.

24 Advice received from Dairy Food Safety Victoria. 2 February 2013.



1.45 Regarding supermarkets, Ms Jackie Healing, Quality Assurance Manager at Coles Supermarkets, told the Committee that Coles tests its imported food to the same standards as Australian food. Ms Healing said that:

Suppliers of imported fresh fruit and vegetables are audited Overseas seafood factories are audited Coles uses the same auditors to conduct audits overseas as in Australia – SGS,

NCSI, SAI Global and Bureau Veritas.

1.46 When industry concern that standards required for imported food on supermarket shelves are lower than those for local food were put to Ms Healing, she replied: “I am very clear that that would not be the case.”

1.47 Ms Healing added:

My professional credentials are QA programs, so it does not matter to me where in the world the program is operating. What I do is manage the risk for our organisation. Different countries have different levels of risk; there is no doubt about that. Different factories have different levels of risk in the same country, but we manage it consistently.25

1.48 The practice of on‐farm auditing of overseas suppliers by supermarkets has only started to happen over recent years, which may explain why it is not yet widely known across industry.

OTHER ISSUES

1.49 During the course of this Inquiry a number of issues were raised with the Committee that although relevant fell outside the Committee’s power to influence or were only indirectly related to our Terms of Reference.

1.50 Several of these are raised briefly here but will not be discussed in the Report.

1.51 For example, the issue of sale of meat at farmers markets was raised. The Committee is pleased to report that the government has clarified this issue through an exemption to the Meat Industry Act and that this is now regulated by local government.26

1.52 The Committee heard that vegetables grown in China are being packed in New Zealand in order to take advantage of the mutual recognition agreement between Australia and New Zealand.27 However, the Committee did not receive sufficient evidence to comment further on this issue.

25 Ms Jackie Healing, Quality Assurance Manager, Coles Supermarkets, Public Hearing, Melbourne, 12 November 2012. 26 For further information refer to Victoria Government Gazette, No G 39, 27 September 2012, p 2172; Victoria Government Gazette, No. S 337, 11 October 2012, and Walsh, P (Minister for Agriculture and Food Safety) 2012, Reduced red tape for sale of meat at markets, media release, Parliament House, Melbourne, 26 December.

27 Mr David McKerrell, above n 19.



1.53 Also the Committee heard that businesses that export product overseas often find the requirements anti‐competitive. This is especially the case for businesses that export to the European Union or, as Mr Frank Herd said, the United States:

The obvious one is America where they set the bar of their regulatory framework at an enormous cost, for whatever reason; they have got their reasons. What has happened over the journey is that the domestic standard gets ratcheted up to an artificial level that is put in place sometimes as a quasi‐tariff barrier.28

1.54 In Portland, Mr Gary Kenyon, General Manager of Sou’west Seafoods told the Committee: “You have America, where we did export abalone to, where their thermal process capabilities far exceed – double – what Australia has. I believe that is once again protectionism that stops you exporting there.”29

1.55 Export requirements are beyond the remit of this Committee and this Inquiry. However, the Committee supports the food industry’s call for the Federal Government to remove any unnecessary impost placed on Australian primary producers who export their product overseas.

28 Mr Frank Herd, Chairman, Australian Meat Industry Council, Public Hearing, Melbourne, 12 November 2012. 29 Mr Gary Kenyon, General Manager, Sou’west Seafoods, Public Hearing, Portland, 20 September 2012.

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sed on a ris

, measuringgislation is ato the 2005he Hamptoneveral of wh

ut a reasonnecessary in

ve, accessibed, explicit csting system

erial Statementafety Victoria’s bove n 31.

Ch

rt Victorian tor’.36

witnesses imension ‘ped requiremExpectation a formal co

mmittee beltation that eless it is unmost task ofregulatory

to reduce dthe regulat

and seafoodf Victoria. Thhe MoU stator has respucts then D

k‐based ap

g and monitas effective ‘Hampton n Review prhich can be

nformation,

le advice eaconsideratioms and data

t of Expectationwebsite (www

hapter two: How

Governme

regarding tpolicing’ appments) can ns. There shommitment

lieves that tregulators wnderstood bf the regulatrole.

uplication, tor for the dd regulationhe aim of thtes that theponsibility; fDairy Food S

proach.

toring risk, sas possibleReview’ of roduced tenapplied to f

, nor give th

asily and chon should ba to minimis

ns can also be fw.dairysafe.vic.g

we regulate

15

nt

he proach be ould be t for

the will by tors is

a dairy n), the he MoU for Safety

so as to . Many

n food

he same

eaply be given se the

ound at gov.au).

Inquiry into

16

2.16

2.17

2.18

2.19

2.20

2.21

2.22

38 Hampto39 Dr Matt2012. VCin food s

40 Accordicent of fCompet

41 This ref42 Food St

o the Impact of Fo

Reguallowis a cl

The benefit

Bette More

Commpract

Great

A simple exsafety can bsuggested, would an estandards?

The Commregulation talso supporprovided by

The Commregulation

Firstly, Victguided, to sexplained ioutcomes‐bAdded to thinterventio‘… based on

Identifying determininsubmissionthemselvescommensu

In Victoria, based apprCasey expla

on P, Reducing Athew Butlin, ChCEC’s Executivesafety regulationg to the Victofoodborne illnetition and Efficieers to the Primandards Austra

ood Safety Regul

lators shouw, or even enlear case fo

ts of risk‐ba

er targeting e effective lemittee, idenice”39 ter public tr

xample of wbe found inmost foodbducation ca41

ittee suppothat achievrting industy industry a

ittee does nin this Repo

torian regulsome extenn Chapter 3based, therhis, the Fooon should ben risk analy

risk is faciling Primary Pns and consus. For examrate with th

the food saroach to theained their

Administrative air, Victorian Ce Director Mr Jeon were found rian Competitioess in New Soutency Commissioary Productionalia New Zealan

ation on Farms a

ld recognisencourage, er protection

ased approa

of resourceegislation thntifies “… w

rust in and a

why the prin the followiborne illnesampaign on

orts taking aes a balanctry. In develand regulato

not feel theort for a num

ators are imnt at least, b3 the Primareby continuod Standarde preventivesis using th

tated by thProduction aultation docple, Standahe food safe

afety regulaeir work. At risk‐based a

Burdens: Effect

Competition andeff Hole added in the retail secon and Efficiencth Wales is linkeon, above n 31 and Processingnd Act 1991.

and Other Busine

e that a keyeconomic prn.38

aches includ

es hat, as VCEC

where it is ac

acceptance

nciples of rising questioss outbreaksn food hand

a risk‐basede of ensurinloping this vors.

need to exmber of rea

mplementinby the princry Productiouing the shids Australia e rather thae best avail

e ‘Proposaland Processcuments. Thrd 4.2.1 (Seety risk’.

ators have a a public heapproach:

tive inspection d Efficiency Comthat evidence cctor. cy Commissioned to unsafe fo. g Standards dis

sses

y element orogress and

de:

C Chair Dr Mctually poss

of regulatio

sk‐based ren: if it is thes can be traling achieve

approach tng the proteview the Co

xpand greatasons.

g national lciples of riskon and Procft away froNew Zealanan reactive able scient

’ process FSsing Standahis is reflecteafood) stat

a proven coearing in Me

and enforcememmission, Publicollected by VC

, the NSW Foodood handling an

scussed in Chap

Rural

f their activd only to int

Matthew Buible to mak

on.

gulation aree case that, aced to pooe more than

to developinection of puommittee dr

ly on the su

egislation wk‐based regucessing Stanm prescriptnd Act 1991and that staific evidenc

SANZ carrierds, includited in the Sttes that con

mmitment elbourne Pr

ent, HM Treasuric Hearing, MelCEC found that m

d Authority foud preparation i

pter 3.

l and Regional C

vity will be ttervene whe

utlin told thke a differen

e relevant tas is often r food handn national

ng food safublic safety rew on evid

ubject of ris

which itself ulation. As ndards are tive legislati1 states thatandards muce’.42

es out whenng calls for tandards ntrols must

to taking a rimeSafe’s M

ry, London, 200lbourne, 12 Nomost of the ine

und that aroundin the home. V

Committee

to en there

e nce in

to food

dling,40

ety while dence

k‐based

is

ion. t ust be

n

be ‘…

risk‐Mr Brian

05. vember efficiencies

d 23.8 per ictorian

Rural and

2.23

2.24

2.25

43 Mr Bria44 Dr Cath2012.

45 Mr Jeff Novemb

46 Such as47 Petersopresent

Regional Comm

Audit fprocessnumbeor annuproducsound rnon‐coenforce

At the samwhich Dairybased on idinvolved:

At the stake inthe indbe a fitand whput thathe indlarge eterms oprocesslooked

Mr Jeff Holtold the CoVictoria adThe Communderpinniinto practic

The VictoriDr DeborahCommissiotitled ‘Risk‐The paper iand overse

n Casey, Chief erine Hollywell

Hole, Executiveber 2012. : Victorian Comon D and Fenslined at the Victo

mittee

frequency issed at the fer of audits, ual audit scced … The Arisk‐based pompliance wement powe

e hearing Dy Food Safedentifying ri

smaller endto considerdividuals in tt and propehether we hat into practdividuals whend, the riskof very advases that havd at.44

e, Executiveommittee thhere to riskittee also reng risk‐basece in the Vic

an Governmh Patterson n Regulator‐based reguis a thorougas, relevant

Executive, Priml, Chief Executiv

e Director, Victo

mpetition and Efng S, ‘Risk‐baserian Competitio

s set in line wfacility. The and audits

chedule, depuditor‐Geneprocesses fowith food safers.43

Dr Catherineety Victoria isk factors,

d of the marration that ithe systemsr person. Whave confidetice. Sometiho are attemks can be veanced and cve multiple

e Director, Vhat in his exk‐based prineferred to Ved regulatioctorian cont

ment’s submand Sally Fry Conferenulation: googh summaryt to risk‐bas

meSafe, Public Hve Officer, Dairy

orian Competit

fficiency Commd regulation: goon and Efficienc

with the levgreater the are structupending on eral also foor monitorinfety require

e Hollywell tdeterminesincluding b

rket one of is quite chals, because wWe have to loence that thimes the rismpting to seery differentcomplicatedcritical con

Victorian Coperience bonciple and aVCEC’s in‐deon and its otext.46

mission to tensling at tnce held in Md practice ay of researcsed regulati

Hearing, Melboy Food Safety V

tion and Efficien

mission, above nood practice ancy Commission

vel of risk ofe product risured on a quthe productund that Prng complianements and

told the Coms the level ousiness size

the things tllenging is twe cannot juook at whahey are goinsk is not eveet up a busint and much d manufactutrol points t

ompetition oth PrimeSare responsiepth undersngoing wor

his Inquiry che VictorianMelbourne and lessons ch and curreion.

urne, 20 NovemVictoria, Public

ncy Commission

n 31. nd lessons for tRegulatory Con

Ch

f a product bsk, the greauarterly, biat that is beirimeSafe hance, managusing our

mmittee thof risk in thee and the pr

that we wouthe competeudge somebt they are dng to be ablen the produness. But atmore subtleuring systemthat need to

and Efficienafe and Dairve to indusstanding of rk on how it

contains a pn Competition 1 April 2for the Victent theories

mber 2012. Hearing, Melbo

n, Public Hearin

he Victorian conference, 1 Apr

hapter two: How

being ater the annual ing as ging

at the way e dairy induroduction p

uld ency of body to doing le to uct; it is t the e in ms and o be

ncy Commiry Food Safstry in this athe theoriet can best b

paper preseion and Effi2011. The ptorian contes, both in A

ourne, 20 Nove

ng, Melbourne,

ontext’, Confereril 2011.

we regulate

17

in stry is rocess

ssion ety area.45 es be put

ented by iciency paper is ext’.47 ustralia

ember

, 12

ence paper

Inquiry into

18

2.26

2.27

2.28

2.29

2.30

2.31

OUTCO

2.32

48 The ComMelbou

49 Departm50 Victoria51 For mor

o the Impact of Fo

Both were understand

The CommincorporatiVictorian G

The Commalthough Prbased apprsystematic rationale foresources a

It is hoped behalf of thRegulators missing by approach wproduction

The Commin‐depth unrisk‐based aregulators fcommitmepotential oreduction icommitmethat approaRole of Gov

Given that that FSANZdiscussed inabout the adeveloped

MES‐BASE

As the prevfood safetyinnovation (hazard ana

mmittee also drrne, 2012. ment of Treasuan Auditor‐Genere on HACCP se

ood Safety Regul

rich sourceding of risk‐

ittee notes ng risk asse

Guide to Reg

ittee acknorimeSafe anroach to ideand holisticor how actioallocated ac

that the cohe regulato(see Chaptthe Auditorwould provi sector.

ittee also acnderstandinapproach tofor their apnt to risk‐baf this appron regulatornt by the reach could bvernment a

Australia haZ continues n Chapter 9apparent lacrecent Prim

D SYSTEM

vious sectioy frameworkwhile delivalysis and c

rew heavily on:

ry and Finance,eral’s Office, abee: www.haccp.

ation on Farms a

s of informabased regu

and supporessment in igulation.49

wledges thend Dairy Fooentifying potc risk managons to manacross the foo

mbination ors (see Chaper 3) will brr‐General’s de consiste

cknowledgeng of risk‐bao food safetproach in thased regulaoach to reduy burden is egulators toe implemennd the Role

as a federalto apply the9, the Commck of risk‐bamary Produc

n outlines, k is designeering safe fritical contr

: Victorian Audi

, above n 32. bove n 48. .com.au.

and Other Busine

ation and hlation.48

rts the Victoits regulato

e Victorian od Safety Vtential foodgement proage agricultod safety sy

of improvedpter 9) and ring about tOffice. The

ency and wo

es both Primased regulatty in Victorihis respect ation into thuce regulato possible tho provide adnted. This ise of Regulat

l system of e principlesmittee shareased analysct and Proce

along with ed as an outfood. Manyrol points)‐b

itor‐General’s O

sses

elped the C

orian Goverry approach

Auditor‐GeVictoria indivd safety hazocess in Victtural food system’.50

d performathe work ohis statewid Committeeould be of g

meSafe’s antion and theia. The Comand recomhe future paory burden he Committedvice to govs discussed tors.

food safetys of risk‐bases the Victosis in the waessing Stand

taking a risktcomes‐basefood businbased food

Office, Agricultu

Rural

Committee i

rnment’s coh, as expres

eneral’s Offividually takzards, the ‘…toria meansafety risks a

nce reportif the Commde overviewe believes threat benefit

nd Dairy Fooeir commitm

mmittee commends theyarticularly won food buee believes vernment wfurther in S

y regulation ed regulatioorian Governay in which dards.

k‐based apped system tesses operasafety man

ural Food Safety

l and Regional C

in developi

ommitmentssed in the

ice concerne an effecti… absence os there is noare selected

ng systemsmittee of Fow identifiedhat such ant to the foo

od Safety Viment to takmmends they continue twith regard usiness. Wh there shou

with regard tSection 2.68

it is imperaon to its wonment’s conFSANZ has

proach Austthat encourate a HACCPnagement sy

ty, Victorian Go

Committee

ng its

to

s that ve risk‐of a o clear d and

on od as n od

ictoria’s king a e their to the erever a uld be a to how 8 on the

ative ork. As ncern

tralia’s rages P ystem.51

vernment,

Rural and

2.33

2.34

2.35

2.36

2.37

2.38

2.39

2.40

2.41

2.42

52 Victoria53 Victoria

Regional Comm

However, tincreasinglycommitmeassess boththey are toin the quot

The challentaking an oto regulateways of imphave the mand enforce

The approaexpectationachieve an businesses

The Commcorrect appthe competis ensuring

During this of small buand manufa

The Victorido not haveimplementrequiremen

As an examSeafood. Seprevent the

In this case‘all necessahave takenspeciality c

Small food driving stanstandards nmean a bet

Dr Hollywefood safety

an Competition an Government

mittee

the nationaly prescriptivnt to proceh the practic measure ritation at 2.2

nge for reguutcomes‐ba but leave bproving foo

more challene food safet

ach chosen ns – small boutcome musually pre

ittee underproach is tatency to mathat they u

Inquiry thesiness haveacturers.

an Governme specialist food safetynts generall

mple, Standaection 4 (1) e likelihood

e, some smaary steps’ ar ‘all necessaheese secto

businesses ndards highnecessarily tter regulat

ll agreed thy system val

and Efficiency , Submission, N

l outcomes‐ve at state ss‐based reces and theisk. This wa23 regarding

ulators is thaased or a prbusinesses wod safety. Onging and exty legislatio

by regulatobusinesses wmay find it eefer the free

stands thatken for eacake the corrunderstand

e Committee been given

ment submiexpertise oy obligationly consume

ard 4.2.1 is tstates: ‘A s of seafood

all businessere, rather thary steps’. Tor.

have also eer as a marmeans ‘betory regime

hat constantlued in Victo

Commission, a

Number 45, 17 S

‐based systlevel, regaregulation. The competens explainedg determini

at they musrescriptive awith less flen the otherxpensive it on.52

ors can be inwithout theeasier to foledom to dev

t it is difficuh business, rect judgemindustry ch

e has ensurn equal con

ission to thion hand to dns, and takins a larger p

the Primaryseafood busd being or b

es may prefhan have thThis may als

expressed crketing advatter’ standaor indeed b

tly measurioria. Howev

bove n 31. September 201

em has a terdless of an his is becaucy of a busid well to theing risk fact

st constantlapproach. Pexibility to ir hand, the mis for regula

nfluenced bcapability olow a prescvise their ow

lt for regulabut believe

ment about anges and d

red that thesideration a

s Inquiry stdevelop an ng measureroportion o

y Productiosiness must ecoming co

fer their stahe onus placso be the ca

concern thatantage. Howrds. Similarbetter food

ng risk is thver, at least

12, p 7.

Ch

endency to bindividual sse state regness to proe Committeeors.

y make a chPrescriptivennovate anmore flexibators to mo

y industry sof understaribed procewn systems

ators to enses that the rwhat is reqdevelopme

e concerns aas those of

ates: ‘Smallunderstands to meet foof their turn

n and Procetake all nec

ontaminated

te regulatoced on themase for new

t bigger comwever, it is uly, more regsafety outc

e price of tht regarding

hapter two: How

become state’s gulators muoduce safe fe by Dr Hol

hoice betwee systems ard design bebility busineonitor stand

size and anding how ess, whereas.

sure that thregulators duired. Part nts.

and expectalarger prod

l businessesding of and ood safety nover.’53

essing Standcessary stepd.’

or to explainm to prove tw entrants to

mpanies areunclear if ‘hgulation macomes.

he more fledairy, othe

we regulate

19

ust food if lywell

een re easier etter sses ards

to as big

e do have of this

ations ducers

s often

dard for ps to

n what they o the

e higher’ ay not

exible r states

Inquiry into

20

2.43

2.44

2.45

CONSIS

2.46

54 Dr CathPublic H

55 Victoria56 Ms MicSeptemCottrill, Peter SkGamze, PerformAustralia

o the Impact of Fo

with smallethat is both

I think little biare beimakingflexiblethen thquite dthe largmessag

This would Australia sabased systebusinesses have certai

The educatdiscussed f

In later chaapproaches

STENT OUT

“I haveof the o

“We arselling it anym

Australia opadhere. Hodemonstrastandards a

erine Hollywell

Hearing, Melbouan Governmenthelle Hill, Qualiber 2012; Mr RChief Executivekene, Chief ExecOwner, Felix’s

mance Benchmaa, Canberra, 20

ood Safety Regul

er industriesh easier for

some of ouit more to ping clearer ag their judge way of opehat may wedifferent, I wger manufage that they

suggest thaatisfies the Vem as one tto have flexnty’.55

tion / advisofurther in Ch

apters of this to food sa

COMES, IN

e struggled aother states

re having pethem down

more.” Mr N

perates a feowever, as tte there is cacross the s

l, above n 44. Aurne, 22 Octobe, above n 53, 2ity Assurance MReg Weine, Chiee Officer, Austrcutive Officer, APlaza Meats, P

arking of Austra009.

ation on Farms a

s than Victobusinesses

r interstatepossibly a mabout the dements on terating a syll meet theiwill not say tacturers hery want us to

at, for the dVictorian Ghat balancexibility in co

ory role playhapter 9.

is Report thafety are dis

CONSISTEN

a bit to try ts.” Mr Peter

eople produn into WangNathan Wolt

ederal systehe above qclearly incostates.56

A similar point wer 2012. 1. Manager, Warrnef Executive Offalian Meat InduAussie Farmersublic Hearing, Walian and New Z

and Other Busine

oria may favto follow a

e colleaguesmore prescripdatasets thethose datasystem. But ifir needs. Outhat, but were and I gueo be as flexi

dairy industovernmentes ‘… the teompliance a

yed by Prim

he practical scussed and

NT APPROA

to understar Skene, Mo

ucing hams garatta. Victer, Wodon

em of food suotations, ansistent ap

was made by M

nambool Cheesficer, Bulla, Pubustry Council, Ps Dairy, Public HWangaratta, 22Zealand Busines

sses

vour a morend for regu

s are tendinptive approey require ansets, which if the busineur businessee have the vess they giveible as poss

ry at least, ft’s understansion creatand the nee

meSafe and

manifestatd examples

ACH

and the requount Waver

in New Soutorian butchga

safety reguland many oplication of

Ms Sarah Carter,

se & Butter, Pubblic Hearing, MePublic Hearing, Hearing, Melbo2 November 20ss Regulation: F

Rural

e prescriptivlators to au

g to go bacach where nd they willis a slightly esses are haes here are nvast majorite us a consisible.54

food safetynding of a sed by the ded for smalle

Dairy Food

ion of theseprovided.

uirements inley

uth Wales anhers just do

lation to whothers the Cnational ou

Supplier Excell

blic Hearing, Caelbourne, 22 OcMelbourne, 12ourne, 12 Novem12. See also: PrFood safety, Co

l and Regional C

ve system, oudit:

ck a they l be y less appy, not ty of stent

y regulation successful rdesire for laer business

Safety Vict

e theoretica

n some

nd o not do

hich all statCommittee hutcomes‐ba

lence Manager

amperdown, 19ctober 2012; M2 November 201mber 2012; Mrroductivity Commmonwealth o

Committee

one

across risk‐rger es to

oria is

al

es heard, ased

r, Fonterra,

9 Mr Kevin 12; Mr r Felix mmission, of

Rural and

2.47

2.48

2.49

2.50

2.51

2.52

2.53

57 Radford58 For exa59 Mr Mar

Regional Comm

The Commeffectively expressed t

To a certainis implemestandards iexactly the

In some casstates withdairy induswhere fish to be proceAustralia. Inachieve an

The evidenstandards w

For some bis used as aVictoria butthe Sydneycontrols tha

Other busindifferent princonsisten

Others hadBarnes, MaAustralia:

What dlookingof thingFood Simplemclients Fielder,have sithey haaccommback to

ds Meats, Site Vmple: Ms Sarahrc Barnes, Mana

mittee

ittee was inmeans thatto the Com

n extent thinted by diffs at times s same defin

ses an incon small dairytry. Anothecaught in thessed muchn this examoutcome –

ce the Comwas mixed.

businesses, oa competitivt sells intery markets, pat are seen

nesses that rocesses to ncies to be s

d a differentanager Food

drives us nug at the cougs in each standards Comentation. Ilike Baiadar, Allied Millites in everyave to havemodate theo the same s

Visit, Warragul, h Carter, aboveager Food Divis

nterested tot each statemittee on m

s is unavoidferent stateso broad thanition of, fo

nsistent appy industries er practical ehe tropical c faster thanple, there aavoiding se

mmittee hea

operating tove advantagstate, told tpartly becauto be place

have facilitmeet any rsimply a les

t perspectivd Division, N

uts? Australiuncil side of state. They aode, but thet is just totaa, Ingham anls and Maniy state – it ddifferent tw

e different pstandard, w

18 October 201 n 54; Mr Reg Wsion, NCS Intern

o note that e has its ownmany occasi

dable wherees and reguat it is unrear example,

proach is evtake a diffeexample caclimate of Cn fish caughare very gooeafood bein

ard about th

o what are ge. Radfordthe Commituse of its higed on abatto

ties in severrequiremens than idea

ve on the chNCS Interna

ia is still a futhings and all refer bacey all have dally crazy. Wnd George Wildra – all ofdrives themweaks to thprograms inwhich is just

12. Weine, above nnational, Public

in the view n regulationions.

ever a natiolators. The alistic to ex‘all necessa

ven preferaerent appron be found Cairns and Dht in the coldod reasons ng contamin

his inconsist

considereds Meats, whttee that itsgher qualityoirs in Victo

ral states, ants that mayl business c

hallenges oftional, an a

funny place the health ck to the samdifferent prWith these laWeston Foof these natio absolutely eir processi each state,t absolute n

n 56. Hearing, Melb

Ch

of many fons – and thi

onal outcomphrasing of pect every ary steps’.

ble. As discach to statein the seafoDarwin, for der climate for the stepnated – bein

tent applica

higher stanhich slaughts meat is in y and the moria.57

nd therefory differ, conhallenge.58

the systemuditor that

if you are ndepartmenme standarograms of arge nationods, Goodmonal clients barmy, becing systems, but it all reuts.59

ourne, 12 Nove

hapter two: How

ood business is how it w

mes‐based sf national state to rea

cussed aboves with a lafood industrexample, w

e of southerps needed tng different

ation of nati

ndards in Vters meat inhigh demanore stringe

re have to dnsider the

m, such as M works acro

not t side rds, the

nal man s that cause s to efers

ember 2012.

we regulate

21

ses this was

system

ach

ve, rge ry, will need n o t.

ional

ictoria n nd in nt

develop

Mr Marc oss

Inquiry into

22

2.54

2.55

2.56

2.57

2.58

2.59

60 Dr Cath61 Ibid.

o the Impact of Fo

From Mr Bacomplicatenational in

This inconsthat Dairy Fconsistent

When wfair bit of the dagainsthat becountryforefroapproanationathe wastaff frand theSouth Wdemonevery yof the s

However, snot is a fair

Another prVictorian b

For examplproducer into meet hisAccording tfees in the

The vast mlisteria monsaid that thcheaper an

The diffa post‐post‐patesting

erine Hollywell

ood Safety Regul

arnes’s persd and costlyreach.

sistency canFood Safetyoutcomes a

we look at wt of nationaldata that det a single ouecause impoy wants to cont of that dach. We do ally. For exaay in which wrom Victoriaey would coWales. We hnstrate that year we wrisystem.60

she added: “r challenge.”

oblem ariseusinesses.

le, the Comn Wangarats food safetto Mr Gamzorder of $1

ajority of Mnocytogenehe process fnd effective,

fference is t‐pasteurisatasteurisatiog, will either

l, above n 44.

ation on Farms a

spective they system w

also affect y Victoria is across Austr

what is hapl work, one emonstrateutcomes‐baorting countcome and redemonstratithat by havample, if wewe are mana go and witome and withave a progwe are croste a report

“We achiev”61

es when inc

mittee heata. Mr Gamy requiremze, a similar1,500 annua

Mr Gamze’s es, the bactefor controlli, yet is not a

hat in New tion of theiron, which is r kill or elim

and Other Busine

ese inconsishich is not e

market acca leading aralia, as a w

ppening natiof the thinges that the nased approatries expecteview Austring that theving a coorde are lookinnaging our atness an autness us, angram of shass‐referencithat is a na

ve the same

consistency

rd from Mrmze told theents, includr business oally.

fees are foreria responing listeria mallowed in V

South Waler product, wa far betterinate listeri

sses

stencies creeasily unde

cess. Dr Holgency in wo

way of prote

ionally, andgs we do is national sysach. We aret to see it. Wralia, we areere is a natiodinated effog at whetheaudit activitudit in WA, ond Tassie woaring this acing each othational repo

e outcomes.

becomes a

Felix Gamz Committeeding testing,operating in

r testing hissible for camonocytogeVictoria:

es they can which meansr system thaia mono if it

Rural

eate an ineffrstood by b

lywell told torking towaecting overs

d we undertto be the kestem operate required toWhen an impe often at thonal single rt that worker we are roty, we wouldor several aould go to Nctivity to her’s work, rt about the

Whether it

competitiv

ze, a butchee that he pa, auditing aNew South

s products fousing listerienes in New

do what is s that that an environmt is present

l and Regional C

fficient, businesses t

the Commiards achieviseas market

take a eepers tes o do porting he

rks obust in ld have audits, New

and e status

t is consiste

ve disadvant

er and smallays $6,668 and PrimeSah Wales wou

for the presiosis. Mr Gaw South Wa

called

mental in the

Committee

that are

ttee ng t access:

ent or

tage for

lgoods annually afe fees. uld pay

ence of amze ales is

Rural and

2.60

2.61

2.62

62 Mr Felix63 See: wwcontrol%

64 Mr Felix

Regional Comm

producallowe

PrimeSafe ithe controlapproved talso state texpressly a

Mr Gamze Albury to bto Wangarameat treatewhere incodisadvanta

I have hVictoriacures eproducback toin Soutlegally

Australia harecognisedprovided th

Mr DINCulcairthrougback thfar as EBeechwprobab

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Mr DINago, it rules. B

x Gamze, aboveww.primesafe.v%20of%20 Listex Gamze, above

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ct. We do nod to do that

implements of Listeria’est methodhat ‘A contpproved an

told the Cobe treated uatta to be soed that wayonsistent intge for a Vic

had a coupla wanting met cetera thact to South Ao Victoria. Itth Australia,in Victoria.

as no trade in other stahe Committ

NNING — Yern and threeh to Yarrawhrough OakEuroa, up oworth, Myrtbly a 120‐kil

HAIR — So wnt for you to

NNING — If would haveBut they hav

e n 56. vic.gov.au/uploaeria.pdf. e n 56.

ot have thatt.62

s the Meat which are tds for microrolling authnother testi

mmittee thsing the poold – that isy can be solterpretationtorian busin

le of phone me to makeat I was speAustralia tot cannot be , but it can 64

barriers at ates. Mr Getee with an

es, we covere trucks a dawonga, Cobrklands and bver the Mertleford, Briglometre rad

with the reqo operate th

you asked me been becave accepted

ads/Victorian%

t ability – w

Standards Cthe nationaobiological thority shall ang regime’.

hat it wouldost‐pasteuris, although d here. Mr n of nationaness:

calls now fe a product feaking abouo be manufa made legacome back

its state boeoff Dinningexample:

r as far as Hay to Alburyram, Tocumback into Corton Gap intght and Moudius of Wan

uirements ihere than t

me that queause there wd the Victori

%20Standards/R

we cannot do

Committee’al guidelinesesting of mapply this g63

be legal fosation procthe processGamze proal standards

from a lady for her out ut. She sendactured overlly in Victorto Victoria

orders, meag of Dinning

Holbrook, acy‐Wodongamwal, Finleyorowa. And to Mansfielunt Beauty garatta tha

in New Souto operate h

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o that, we a

’s ‘Regulatos. These guieat productuideline un

r him to seness and thes is not allowvided anoths is a compe

in western of the naturds a lot of her there, to cria the way tand it can b

ning Victorg’s Kelly Cou

cross to Hena. Then we gy, Jerilderie, we go dowld. Then we this way. Soat we do.

th Wales, ishere?

ably three yfferent setsnd that is ok

guidelines%20fo

hapter two: How

are not

ory guidelineidelines spets. Howeveless it has

nd his proden bring thewed in Victher exampletitive

ral er come they do be sold

rian accredituntry Dairy

nty, go right Urana,

wn as do o it is

s it any

years s of kay.

for%20the%20

we regulate

23

es for ecify the r, they

ucts to em back oria, e of

tation is

Inquiry into

24

2.63

2.64

65 Mr Geo66 Mr Bria

o the Impact of Fo

The CHSafety operat

Mr DINyour tr

Thus, thereother state

The CommExecutive oeasy to moinconsistennot to regu

Mr CASvarious

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Mr CAShavinguseful aapprecstate, adisadva

PrimeSthere isare seeappliedstandathose s

But thestandaAs I saithis issinconsithere aor do yask.66

off Dinning, Ownn Casey, above

ood Safety Regul

HAIR — So thVictoria ante in New So

NNING — Yerucks are cro

e may be exes, giving Vic

ittee discusof PrimeSafenitor, Mr Cancy occurs wulate low ris

SEY — It is cs states is n

HAIR — Do wlia but there

SEY — No, if different stand it can ociate if you cand if we haantaging ou

Safe only aps a conflict ieking to havd consistentards the morstandards, s

ere is clearlyards and thaid, the areaue of do yoistency, it isare actually you not regu

ner, Dinning’s Ke n 43.

ation on Farms a

he fact thatd PrimeSafeouth Wales?

es, because ossing over

xamples of rctorian busi

ssed this isse. Adding toasey suggeswith low risksk foods:

clear to anyot helpful o

we not opere are differe

f I can just ftandards aconly disadvacan produceave higher sur businesse

pplies nationin the natiove outcometly. So sensire likely youso there is s

y inconsisteat is particulwhere you u regulate, s not so mucways of resulate, and I

Kelly Country D

and Other Busine

t you are ree in Victoria?

you can imand that ty

requiremeninesses a co

ue of incono earlier evisted that fok food prod

yone that haor useful.

rate under tent interpre

finish the pocross the vaantage Victoe it in one sstandards thes.

nal standardonal standar‐based stanibly the moru are to havscope for int

ency in the alarly evidencan get somnot how yoch an inconssolving thatthink that i

airy, Public Hea

sses

gistered wia means you

magine in Albype of thing

nts being moompetitive a

sistency witidence that or Victorian duction. The

aving differe

the one stanetations?

oint I am marious statesoria becaustate, you cahan anothe

ds. To go tords framewndards but wre prescriptive consistenterpretation

application nt in the areme returns ou regulate.sistency in it – it is the qis a much be

aring, Wangara

Rural

th Dairy Foou are allowe

bury‐Wodon.65

ore lenient advantage.

th Mr Brianprescriptivbusinesses e best soluti

ent standar

ndard acros

aking. Firstls is not helpse as you clean sell it in aer state, it is

o your point,ork where twant them tive you maknt application of standar

of the natioeas of loweris in focusin So where tinterpretatiquestion of etter questi

tta, 22 Novemb

l and Regional C

od ed to

nga

in Victoria t

n Casey, Chive legislatiomost ion, in his v

rds in

ss

tly, pful or early another s simply

t, Chair, they to be ke the on of rds.

onal r risk … ng on there is ion – do you ion to

ber 2012.

Committee

than

ef n is

iew, is

Rural and

2.65

2.66

2.67

THE RO

2.68

2.69

67 Ms CaroVisit, Sta

Regional Comm

According tCommittee

The CommImplementstandard. TarrangemeCommitteeexamine approcess is e

The Commtogether orHowever, tstandards ibusinesses,the nation.regulators Victorian bthe FSANZ

OLE OF GOV

As part of itroles playepublic hearfrom Prime

It is clear thgovernmenis a distinctregulators possible ex

The CHgovernPrimeS

Mr HO

Mr CAS1993 agovernWhat w

ol Bate, Regulatanhope, 21 Nov

mittee

to Fonterra,e should do

ittee notes ation Sub‐CThis has resunts for all Pe has heard pproaches texpected to

ittee believr take a polithe Commitn some cas, and those The Commneed to be usinesses aImplement

VERNMENT

ts deliberatd by governring in MelbeSafe.

hat once a dnt has decidtion betweeis to decidexclusions fro

HAIR — You nment recomSafe, the on

WARD — In

SEY — Whaand the Seafnment decidwe decide is

tory Manager, vember 2012.

, the Forummore to re

the VictoriaCommittee tulted in FSAPrimary Prodthis reviewto drafting oo begin in M

es that theicy approactee heard tes disadvanmanufactu

mittee believaware of inre not at a ation Sub‐C

AND THE R

tions the Conment and rbourne the C

decision hasded which ben regulatore the best wom the regu

said in yourmmended thes you had

n the most r

t I said wasfood Safety des the busins how we re

Mr Brett Nilon,

m on Food Rmove incon

an Governmto conduct ANZ consideduction and

w may focus of standardMarch 2013.

benefit of ach that suitsthat inconsintage Victorurers such aves that thenstances whdisadvantagCommittee o

ROLE OF RE

ommittee wregulators iCommittee

s been madbusinesses try managemway in whichulation:

r opening chat the busto audit –

recent Act, y

s that I refer Act 2003. Wnesses thategulate.

, Site Manager,

Regulation’snsistencies a

ment’s recena review ofering a revied Processingsimply on ws. The Com

a federal sys their partistencies in rian business Fonterra we Victorian Ghere this is oge. This canor state‐bas

EGULATORS

was interesten forming fdiscussed t

de to regulato regulate. ment and sth regulation

omments thinesses that

yes.

rred to the MWhat I did st are regulat

Mr Nicholas Le

Ch

Implementacross the s

nt request ff the nationew of the img Standardsworking witmittee unde

ystem is thatcular circumimplementasses, particuwith a preseGovernmenoccurring ann be achievesed solution

S

ed in determfood safety this delinea

te a sector According ttandard sett should be

hat in 2003 t came unde

Meat Indussay is that thted by Prim

embo, Commun

hapter two: How

tation Sub‐states.67

for the nal seafood mplementats. However,th jurisdictioerstands th

t states canmstances. ation of natularly smallence througnt and food nd ensure ed either thns.

mining the regulation.ation with M

by definitioto Mr Caseyting: the jobenforced, n

the der

stry Act he

meSafe.

nications, Fonte

we regulate

25

tion the ons to at this

n work

tional ghout

hrough

relative At a

Mr Casey

on the y, there b of not on

erra, Site

Inquiry into

26

2.70

68 Mr BriaCouncil,

o the Impact of Fo

The CHthink thof Prim

Mr CASbusinesvery cleregulatregulatwould havingrisk. Yohold it decisiogovern

The shothinkinand I aquestiolow‐riswhethe

Governmenin Victoria, DepartmenHowever, t

The CHquestioand yoPrimeSgoverninvolve

Mr CASthink thmanagstandaregulatimplemimplem

All the food re

n Casey, above, Public Hearing

ood Safety Regul

HAIR — So thhere are sommeSafe?

SEY — I wousses where early: does tory intervetory intervemake abou regard to tou cannot exaccountabl

on that is taknment, and

ort answer ng there aream not sure on for goverk arena wher you impo

nts act on athis advice nt of Primarthe final dec

HAIR — Just on, you saidur knowledSafe cannot nment on whed, who can

SEY — I thinhat if Primegement. Primard setting atory framewmentation emented? Is i

food safetyegulatory fr

e n 43. A similarg, Melbourne, 1

ation on Farms a

he governmme business

uld answer the risk is lothat level ofention? Becaention will imt that is thathe risk andxpect to chale for manaken under tthen expect

to your quee some businthat is a qurnment – I dere there shose direct re

dvice whencould come

ry Industriescision still re

a final quesd that it is fodge of food‐bgive advicehat is consid?

nk that I undeSafe has skmeSafe doearrangemenwork. Our innd, which ist clear enou

y risk assessamework, w

r argument was12 November 2

and Other Busine

ment has deses that the

the questioow and the of risk warraause it is unmpose a cosat it is a mad then the goarge a reguaging the risthe legislatiot the regula

estion is thanesses that uestion for udo think thahould be a vegulatory in

n forming lee from a nus, the Depaests with go

stion, and gor governmeborne illnese to this Comdered a low

derstand yokills, they ares not, for exnt. Rather thnvolvement s, ‘Can this ugh to be im

sments are cwhich involv

s made by Mr F012.

sses

cided the bue governme

on by sayingquestion neant direct gonavoidable tst on businetter for govovernment ulator with rsk of a produon or a direator to do no

at rather thashould not us; I think itat there are very criticaltervention

egislation anumber of sortment of Hovernment:

getting backent to decidsses and themmittee or w risk where

our questionre skills in efxample, parhat is decidein that is arequiremenmplemented

conducted aves the dep

rank Herd, Cha

Rural

usinesses. Dnt should ta

g that there eeds to be aovernment that any ess. The poinvernment toitself absorresponsibilituct, which isection of othing abou

an PrimeSafbe regulateis more of abusinesses analysis of …68

nd Mr Caseyurces, incluHealth and t

k to my firstde. With youe risks, if to the e we should

n very clearlffective regurticipate in ed by the fot the nt be d?’.

as part of thartments of

irman, Australi

l and Regional C

Do you ake out

are asked

int I o decide rbs the ty and is a

ut it.

fe ed – a s in this f

y suggesteduding the the regulato

t ur skills

d not be

ly. I ulatory the ood

hat f health

ian Meat Indus

Committee

d that,

ors.

try

Rural and

2.71

2.72

69 Mr Bria

Regional Comm

and thesaid ea‘Do weagriculwould with thwhere risk relregulat

The CH

Mr CASin all ofshould govern–

The CHadvice

Mr CASwildcatregulatthat it problembe respbe veryfor thestatutothis anauthor

As the abovis often notregulatory in determinbelief that tGiven the ethis regulatremit – bot

In the case comprehenThe Commmore matu

n Casey, above

mittee

e departmearlier is thate actually reltural food sbe the Depahe Departmwe can senate relativetor to say, ‘

HAIR — Wha

SEY — Whaf the produsit and who

nment. If the

HAIR — Thaton what co

SEY — If thetch harvest tory interveis clearly lom that emaponsible fory open and governmenory authoritd assure thrity to do no

ve quotatiot clear. Withsystems anning how tothe role of tevidence thtor to re‐evth to govern

of the dairynsive role inittee believure industry

e n 43.

ents of primt if the goveequire a diresafety?’, theartment of ent of Healtsibly talk abe to other ris‘That’s fine.

at I am sayin

t I am sayincts we supeo should mae governme

t is why we ould possibly

e governmeis low risk a

ention, Primw risk. In thanated fromr that. I madnot muddy nt to decidety like Primee safety of tothing.69

n shows, thhin these bod implemeno improve othe regulatoat the Comaluate this anment and t

y industry tn terms of ites that this sector as is

ary industriernment wisect regulatoe first placePrimary Indth and theybout it is in sks that we Don’t regu

ing is you co

ng is that thervise. The danage it becent decides,

are having y change.

ent decided and that ris

meSafe woulhe event tham that deciside the pointthe waters e. You cannoeSafe and sathe product

he questionodies therentation of rr adapt systor vis a vis gmittee hearapproach ato the indu

he regulatots relationshs is in line ws found in V

ies Australiashes to lookory intervene for the govdustries. They would liaisthe area of regulate? Iulate it’.

ould give ad

here is cleardecision of wcomes a ma and if we u

these hear

– to use an sk does not ld agree witat there wasion, the govt earlier – anwith this –ot have a goay, ‘We want’, and then

of the role is a great degulation wtems. In thegovernmenrd during thnd focus onstry.

or has takenhip with thewith industryVictoria.

Ch

a wide. Whak at that issution in this vernment toey would liase with us, bf: how does It is not for

dvice.

ly a risk inhwhere that atter for use a real ex

ings. We ne

illustrationwarrant dirth the govers a food safvernment wnd I am tryithat it is a movernment nt you to reexpect tha

of the regudeal of expewhich could e case of Prt is strictly ohis Inquiry itn being proa

n steps to eme businessesy expectatio

hapter two: How

at I ue of, area of o go aise but that the

herent risk

xample

eed

n – that rect rnment fety would ing to matter run a egulate t

ulators themertise aboutassist goveimeSafe theone dimenst may be timactive as pa

mbrace a ms that it regons and suit

we regulate

27

mselves t ernment ere is a sional. me for art of its

more gulates. ts a


Australia’s food safety framework

KEY MESSAGES

Food safety in Australia operates under a collaborative national framework with national Primary Production and Processing Standards implemented by individual jurisdictions.

Food safety standards should always be based on risk analysis.

Victoria’s regulatory approach is based on effective compliance monitoring and enforcement activities and processes that assess the performance of the regulators and coordinate regulatory activity.

In Victoria, independent regulators implement food safety standards.

The Victorian Committee of Food Regulators was established in 2010, to strengthen existing arrangements between the food regulators and government.

Measuring the effectiveness of food safety regulation is difficult.

Food safety can be achieved through a range of approaches and methods, one of which is regulation.

Evidence on the efficacy of Victoria’s food safety framework is mostly positive.

3.1 Food safety in Australia operates under a collaborative national framework with some standards shared with New Zealand.70 National standards, which are adhered to by all states and territories, are developed by Food Standards Australia and New Zealand (FSANZ) under the guidance of policy devised by the Legislative and Governance Forum on Food Regulation.71 These national standards are given effect

70 This collaborative approach was established in 1996 by ‘The Agreement between the Government of Australia and the Government of New Zealand establishing a System for the Development of Joint Food Standards’.

71 FSANZ was established by the Food Standards Australia New Zealand Act 1991.



in the form of legislation at state level. In Victoria, the relevant acts are the Food Act 1984, Meat Industry Act 1993, Dairy Act 2000 and Seafood Safety Act 2003.

3.2 The Legislative and Governance Forum on Food Regulation was previously known as the Australia and New Zealand Food Regulation Ministerial Council.72 On 13 February 2011, the Council of Australian Governments (COAG) agreed to establish a new Council system. The Legislative and Governance Forum on Food Regulation was launched on 17 September 2011.

3.3 The aim of the Forum is to ensure a whole‐of‐food‐chain approach to food safety regulation. Membership is comprised of a Minister from New Zealand, state, territory and federal Health Ministers, the Australian Government, and other Ministers from related portfolios. Each jurisdiction has a Lead Minister for voting purposes. In the case of Victoria, the Minister for Health is the Lead Minister, with the Minister for Agriculture and Food Security also attending. This reflects a longstanding belief in Victoria that the primary production sector should be represented at these discussions. The Forum meets at least once each calendar year.73

3.4 The Forum has three main responsibilities:

The development of domestic food regulatory policy The development of guidelines for setting domestic food standards Adopting, amending or rejecting standards or requesting that they be

reviewed.

3.5 These three responsibilities act together as an approval process when FSANZ sets standards for the production, processing, handling and labelling of food. The standards are known as the Food Standards Code. They are legally binding across Australia and implemented individually by states and territories.

3.6 Section 18 of the Food Standards Australia New Zealand Act 1991 lists the priories of FSANZ as:

The protection of public health and safety The provision of adequate information relating to food to enable consumers to

make informed choices The prevention of misleading or deceptive conduct.74

3.7 FSANZ must also have regard to the following principles when developing food standards:

The need for standards to be based on risk analysis using the best available scientific evidence

The promotion of consistency between domestic and international food standards

The desirability of an efficient and internationally competitive food industry

72 See Food Regulation Agreement 2008 at: www.health.gov.au/internet/main/publishing.nsf/Content/foodsecretariat‐system1.htm.

73 Department of Health website. See: www.health.vic.gov.au. 74 Food Standards Australia New Zealand Act 1991.

Rural and

PRIMAR

3.8

3.9

3.10

3.11

75 Ibid. 76 This is a77 Food Rethe deveChaptersafety re

78 See: ww79 Ibid.

Regional Comm

The p Any w

Autho

RY PRODUC

The Primarapplied maservices secFood Regulbased standto focus risintroduced

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Primary Pro

Seafo Poult Meat Dairy Eggs Seed

It is expecteand meat (stated: ‘FSAneeded to submissionFSANZ expehorticulturecarefully beevidence pChapter 8.

a core principle egulation Standelopment of Prr 4 of the Code.equirements inww.foodstanda

mittee

promotion owritten policority.75

CTION AND

ry Productioandatory hyctors of thelation Minisdard‐settingk managem.76

tandards Co

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oduction an

ood try t products y (including

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ed that stanon‐farm) inANZ is explomanage thens was publiected to mae is a low riefore imposresented to

of HACCP systeding Committeeimary Producti However, this the PPP for prrds.gov.au/foo

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PROCESSI

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raw milk pr

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ndards will the future.oring if reguese hazardsshed on 26ake a decisiosk area andsing regulato the Comm

ems, as discusse of the Australon and Processis limited to saimary producerdstandards/pri

ng in foodes formulat

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also be dev.77 Regardinulatory or ads in conjunc6 March 201on in Marchd that FSANZtion on this mittee on th

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ralia’s food safety

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by FSANZ ietail and thed New Zealxtend its evThe intentioere hazards

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ed for:

e, grains, hoch 2012 FSAory measureemes.’78 A ca21 May 201mittee’s vieenefit of regreflected ined in more d

erial Council, ‘Py a standard foANZ will incorp. aonly/horticult

y framework

31

the

n 2000, e food and vidence‐on was are

oney ANZ es are all for 2. ew that gulation detail in

rotocol for r meat in porate

ture.cfm.



3.12 The Primary Production and Processing Standards must take into account the following objectives of the COAG Food Regulation Agreement 2008:

Providing safe food controls for the purpose of protecting public health and safety

Reducing the regulatory burden on the food sector Facilitating the harmonisation of Australia’s domestic and export food

standards and their harmonisation with international food standards Providing cost‐effective compliance and enforcement arrangements for

industry, government and consumers Providing a consistent regulatory approach across Australia through nationally

agreed policy, standards and enforcement procedures Recognising that responsibility for food safety encompasses all levels of

government and a variety of portfolios Supporting the joint Australia and New Zealand efforts to harmonise food

standards.80

3.13 In 2003, the Food Regulation Standing Committee of the Australia and New Zealand Food Regulation Ministerial Council developed a set of ‘Policy Principles’ guiding food safety management in Australia. One principle states: ‘That support is made available to community groups and small businesses to assist them meet their legislative requirements.’81

3.14 This description of the process is a general one. The Committee did receive evidence, in particular from the Victorian Government in its submission to this Inquiry, that there are flaws in the process which mean that Victoria is at a disadvantage when applying nationally agreed standards.82 Inconsistency in the application of the national standards is discussed at 2.46.

FOOD SAFETY REGULATION IN VICTORIA

3.15 The Food Standards Code is given effect through state and territory legislation. As stated, although the Legislative and Governance Forum on Food Regulation and FSANZ sets the policy underpinning the Primary Production and Processing Standards, each state decides how to implement them.83 In Victoria, the standards are given effect through the Food Act 1984, the Dairy Act 2000, the Meat Industry Act 1993 and the Seafood Act 2003.

3.16 Victoria was one of the first states in Australia to introduce food safety legislation that requires industry to share responsibility for effective management of food safety with government. The regulatory approach adheres to a number of basic principles, including:

Effective compliance monitoring and enforcement activities

80 COAG Food Regulation Agreement 2008. 81 Primary Production Processing Standards above n 78. 82 Victorian Government, Submission, Number 45, 17 September 2012, Sections 4.3 and 4.6. 83 Victorian Auditor‐General’s Office, Management of Food Safety in Victoria, Victorian Government, Melbourne, 2002.

Chapter three: Australia’s food safety framework


Processes that assess the performance of the regulators and coordinate regulatory activity.84

3.17 Food safety in Victoria is the responsibility of two government departments and the two independent regulators, PrimeSafe and Dairy Food Safety Victoria, relying on what the Victorian Auditor‐General’s Office describes as ‘… a number of state‐based risk and compliance management tools’.85 The regulation of the primary production, manufacture and transport of dairy, meat, poultry and seafood is the responsibility of the Minister for Agriculture and Food Security, through the Department of Primary Industries and PrimeSafe (meat, poultry and seafood) and Dairy Food Safety Victoria (dairy). Food retail businesses are the remit of the Minister for Health and local government.

3.18 In a 2002 report, the Victorian Auditor‐General’s Office found that food safety in Victoria is effectively managed and that the rates of foodborne illness in Victoria are generally lower than in the rest of Australia.86 For comparisons of rates of illness refer to Appendix 6.

3.19 The Committee notes that the state government is currently considering a performance reporting framework for all Victorian regulators, including a ‘good practice checklist’.87 The Committee believes that such a checklist would complement the Ministerial Statement of Expectations for both PrimeSafe and Dairy Food Safety Victoria and improve the efficient enforcement of food safety regulation in Victoria (see Chapter 9).

3.20 Food safety on‐farm is also affected by three Acts administered by Biosecurity Victoria (which falls under the Department of Primary Industries portfolio):

Agricultural and Veterinary Chemicals (Control of Use) Act 1992 Livestock Disease Control Act 1994 Livestock Management Act 2010.88

3.21 These Acts were not considered as part of this Inquiry.

DAIRY

3.22 All dairy premises operating in Victoria are required to hold a current licence with Dairy Food Safety Victoria, under Part 3, Section 22 of the Dairy Act 2000. All Victorian food businesses, including dairy premises, are required under the Food Act 1984, to comply with the Australia New Zealand Food Standards Code. All Victorian dairy premises must comply with the Code of Practice for Dairy Food Safety and are required to have implemented an approved food safety program.89

84 Ibid. 85 Ibid. 86 Ibid. 87 Victorian Competition and Efficiency Commission, Annual Report 2011–12, Victorian Competition and Efficiency Commission, Melbourne, 2012, pp 6‐15.

88 Victorian Auditor‐General’s Office, above n 83. 89 Dairy Food Safety Victoria Website. See: www.dairysafe.vic.gov.au.



3.23 The Primary Production and Processing Standard for dairy is Standard 4.2.4. The Standard covers primary production, dairy transport and dairy processing businesses.

3.24 All dairy businesses are required to control potential food safety hazards by devising and implementing a food safety program. While there are some prescriptive requirements in the Standard – such as how to pasteurise milk in Section 15 (1) – approval of the food safety program is the responsibility of the state regulators.

3.25 Under the Code of Practice for Dairy Food Safety, all participants in Victoria’s dairy industry are required to be licensed with Dairy Food Safety Victoria to produce milk for sale or be involved in its production, transport, manufacture or distribution. This includes but is not limited to milk from cows, sheep, goats and buffalo. The following businesses and vehicles operating in the dairy industry sector need to be licensed by Dairy Food Safety Victoria:

Dairy farmers Dairy manufacturers including milk brokers Dairy food carriers Dairy distributors.

3.26 Bovine dairy farmer licence fees are deducted from the milk cheque by the milk company and are forwarded to Dairy Food Safety Victoria by the milk company. Non‐bovine dairy farmer licence fees are paid by the farmer to Dairy Food Safety Victoria annually.

3.27 Dairy manufacturer licence holders have their food safety programs audited by approved third party auditors around once every six months. Dairy businesses pay a fee to have these audits carried out, which is in addition to the licence fee paid to Dairy Food Safety Victoria. Advisory guidelines are available to assist dairy businesses with the implementation of food safety standards and the application of good food safety practice. Dairy businesses across the whole supply chain also have their market‐based Quality Assurance programs audited by customers from Australia and overseas.

3.28 The exception is dairy farmers, who are audited by their dairy companies on behalf of Dairy Food Safety Victoria. The fees for these audits are deducted from the milk cheque. Dairy farmers are audited at least once every two years.

3.29 Dairy Food Safety Victoria provides advisory guidelines to assist dairy businesses with the implementation of food safety standards and the application of good food safety practice. The Committee heard from a number of businesses in the sector that Dairy Food Safety Victoria has a co‐operative approach with the industry.

3.30 The following information was sourced from a 2009 Productivity Commission report, Performance Benchmarking of Australian and New Zealand Business Regulation: Food safety.90

90 Productivity Commission, Performance Benchmarking of Australian and New Zealand Business Regulation: Food safety, Commonwealth of Australia, Canberra, 2009.



3.31 All dairy businesses in Australia have been required to comply with the Primary Production and Processing Standard contained in the Food Standards Code since October 2008. Victoria, South Australia and Tasmania are the only states to have separate agencies regulating dairy and dairy products, reflecting the size of the industry in these states.

3.32 New South Wales, Victoria, South Australia and Tasmania have manuals and / or codes with requirements additional to the Food Standards Code. In Victoria, dairy is covered by the Food Act 1984, the Dairy Act 2000 and the Code of Practice for Dairy Food Safety. Retailers are covered by the Food Act 1984.

3.33 For a medium‐size milk processor, licence fees are highest in New Zealand and Victoria. (Direct comparisons with New South Wales are difficult to make as the New South Wales fee includes the cost of activities charged separately in other jurisdictions.)

3.34 For a medium‐size dairy manufacturer, licence fees are highest in South Australia, Tasmania and Victoria.

3.35 The Productivity Commission selected a group of regulatory requirements to compare across the states. According to the requirements chosen, the regulatory burden falls heaviest on New South Wales and Tasmania.

3.36 For a medium‐size milk processor, the annual cost of meeting both licensing and compliance audit requirements is highest in New South Wales (due mostly to licence charges) and Victoria.

3.37 For a medium‐size dairy manufacturer, the annual cost of meeting both licensing and compliance audit requirements is highest in Victoria and South Australia (due mostly to licence charges).

DAIRY FOOD SAFETY VICTORIA

3.38 Dairy Food Safety Victoria is the independent regulator of Victoria’s dairy industry. Dairy Food Safety Victoria ensures national food safety standards are met by licensing all dairy premises operating in Victoria’s dairy industry and approving and ensuring compliance with food safety programs.

3.39 Dairy Food Safety Victoria is a statutory authority established by the Victorian Parliament under the Dairy Act 2000. It reports to the Victorian Minister for Agriculture and Food Security.

3.40 A Ministerial Statement of Expectations articulates the Victorian Government’s priorities and objectives for Dairy Food Safety Victoria. These include:

A risk‐based system that delivers regulatory outcomes at lowest cost to industry

The minimum level of regulatory intervention Outcomes‐based approach to the national food regulatory system, minimising

duplication, increasing operational flexibility and providing certainty for business



Participation in the development of national standards ensuring that the interests of Victorian businesses and the public are paramount

Strong relationships with the Department of Primary Industries and the Department of Health

The timely exchange of information between Dairy Food Safety Victoria and the Minister

Publishing key output and outcome performance indicators in Dairy Food Safety Victoria’s annual report.91

3.41 Dairy Food Safety Victoria is an independent organisation, governed by a Board of Directors. The organisation is funded from dairy licence and service fees (about 25 per cent from farmers and 75 per cent from the manufacturing sector92) and in turn, it provides a tailored range of products and services for the dairy industry. Dairy Food Safety Victoria lists a set of business philosophies that guides what it does and how it works:

Fostering strong industry partnerships Increasing the value of the dairy licence Clearly defined products and services Delivering regulation, not only inspection Working to unify and simplify food standards nationally Independence, tempered with fairness and common sense Promoting integrity and excellence in operations Vigilance, not complacency.

3.42 Dairy Food Safety Victoria (along with the Dairy Authority of South Australia and the Tasmanian Dairy Industry Authority) has signed a Memorandum of Understanding (MoU) with the Department of Agriculture, Fisheries and Forestry which formalises export certification service delivery arrangements. The MoU was signed in December 2011 and took effect from 1 January 2012.

3.43 The agreement, which was previously contained in a ‘letter of exchange’ with the Department of Agriculture, Fisheries and Forestry, formally recognises the state systems as meeting the requirements to deliver audit services which underpin export certification for the dairy industry. It also acts as justification for a closer working relationship with the Department of Agriculture, Fisheries and Forestry and industry and demonstrates a commitment to reduce duplication and streamline administration of food safety regulation and export certification services where possible.

3.44 Underpinning this collaborative approach to export certification arrangements with the Department of Agriculture, Fisheries and Forestry is an MoU between Dairy Food Safety Victoria, the Dairy Authority of South Australia and the Tasmanian Dairy Industry Authority. This MoU sets out a commitment and support for each agency in

91 This can be found at Dairy Food Safety Victoria’s website. See: www.dairysafe.vic.gov.au. 92 Victorian Farmers Federation, Submission, Number 41, 10 September 2012.



implementing a common approach to dairy food safety regulation and export assurance. This MoU came into effect from 15 December 2011.93

MEAT AND POULTRY

3.45 The national Primary Production and Processing Standard for poultry is Standard 4.2.2 and for meat is Standard 4.2.3. Standard 4.2.2 covers areas such as waste disposal, traceability and receiving birds for processing. Standard 4.2.3 covers areas such as ready‐to‐eat meat and food handing. In Australia and New Zealand, the regulation of ‘meat’ begins at the farm gate, although FSANZ has proposed a national standard covering on‐farm as well.94

3.46 All businesses are required to control potential food safety hazards by devising and implementing a food safety program. These standards are less prescriptive than the national dairy standards. However, as with dairy approval of the food safety program is the responsibility of the state regulators – in the case of Victoria, PrimeSafe.

3.47 All meat processing facilities are required to undertake third‐party audits. Businesses pay a fee to have these audits carried out, which is in addition to the licence fee paid to PrimeSafe. The frequency of audits is determined by the level of risk inherent in the product processed at the facility – the greater the assessed risk, the greater the number of audits required.

3.48 The categories and their audit schedules are:

Abattoirs – every three months Further meat processing (packing and storing) – every six months or every

three months if processing smallgoods Retail butcher shop – every six months or every three months if handling

smallgoods Prime tallow – every six months Game meat – every three months Inedible rendering – every six months Pet meat – every three months Pet food (wholesale, packing) – every six months Poultry processing – every six months Poultry retail – every six months or every three months if handling smallgoods.


3.50 In Victoria, meat regulation is covered by the Food Act 1984, the Meat Industry Act 1993, Meat Industry Regulations 2005 and the Victorian Standard for Hygienic

93 For more on both see: www.dairysafe.vic.gov.au/about‐us/about‐us/how‐we‐work. 94See: www.foodstandards.gov.au/foodstandards/primaryproductionprocessingstandardsaustraliaonly/ meatandmeatproducts.

95 Productivity Commission, above n 90.



Production of Meat at Retail Premises. In Victoria, retailers are covered by the Food Act 1984.

3.51 Licensing in Victoria is determined by the type of meat and the place the business occupies in the production chain. The number of licence categories and licence fee groups varies greatly across the different states. Fees are determined by throughput.

3.52 Annual licence fees for small‐ and medium‐size businesses are roughly equal across the states. Fees for large businesses are highest in Victoria, South Australia and New South Wales and increase with business size.

3.53 According to the requirements checked by the Productivity Commission (as done with dairy), the regulatory burden falls heaviest on Queensland, New South Wales and Western Australia.

3.54 For a medium‐size meat processor the annual cost of meeting both licensing and compliance audit requirements is highest in South Australia (due mostly to licence charges) and Victoria.

SEAFOOD

3.55 The national Primary Production and Processing Standard for seafood is Standard 4.2.1. The standard covers the growing, cultivation, picking, harvesting, collection, catching, transport, storage and processing of seafood.

3.56 All businesses are required to control potential food safety hazards by devising and implementing a food safety program. As with meat these standards are less prescriptive than the national dairy standards and approval of the food safety program is the responsibility of the state regulators – in the case of Victoria, PrimeSafe.

3.57 All seafood wholesale, processing and retail businesses are required to undertake third‐party audits annually. Businesses pay a fee to have these audits carried out, which is in addition to the licence fee paid to PrimeSafe. Seafood businesses that also process (including storage) meat and / or poultry will require an audit every six months; those that also manufacture smallgoods will require an audit every three months. Wildcatch fishing and aquaculture businesses are audited on a random basis by PrimeSafe.

3.58 Seafood transport vehicles must also maintain a food safety program as part of their licence. The records can be contained in a booklet or incorporated as part of a food safety program of a PrimeSafe licensed facility. The booklet is presented for review at the vehicle’s annual inspection. PrimeSafe does not review records maintained within the food safety program of a licensed facility at the annual vehicle inspection. However, the licensee must present written advice confirming that the vehicle operates under a Quality Assurance arrangement at the facility.

3.59 A licensed vehicle is not required to transport live seafood. However, this operation must be covered under the food safety program of a licensed seafood business.




3.61 All states and territories use their own legislation to implement the national Primary Production and Processing Standard for Seafood.

3.62 In Victoria, seafood is covered by the Food Act 1984 and the Seafood Safety Act 2003. Seafood is regulated once it is landed on the fishing vessel. For aquaculture, the water is also monitored. Retailers are covered by the Food Act 1984.

3.63 All jurisdictions, except Queensland, require shellfish operators to be licensed for food safety purposes. For seafood other than shellfish only New Zealand, New South Wales and Victoria require operators to be licensed for food safety purposes.

3.64 Licences are generally determined by where businesses operate on the production chain. Differences vary across states according to other determinants; for example, New South Wales and South Australia take business size into account. In Victoria, fees are determined by throughput.

3.65 Annual licence fees for shellfish producers / processors are highest in Victoria. According to the requirements checked by the Productivity Commission (as done with dairy and meat), the regulatory burden falls equally on most states.

3.66 For shellfish producers / processors the annual cost of meeting both licensing and compliance audit requirements is highest in Victoria (due mostly to licence charges) and New South Wales.

PRIMESAFE

3.67 PrimeSafe was established on 1 July 2003 under the Seafood Safety Act 2003, which expanded the responsibility of the former Victorian Meat Authority to include seafood safety in addition to poultry and red meat food safety. Accordingly, PrimeSafe has responsibility for regulating the safety of meat, poultry and seafood in Victoria. In addition, PrimeSafe is also responsible for the regulatory management of pet meat and pet food. PrimeSafe also operates under the provisions of the Meat Industry Act 1993 and the Meat Industry Regulations 2005. The legislative framework for seafood established under the Seafood Safety Act 2003 is consistent with that currently operating for the red meat and poultry industries.

3.68 PrimeSafe is subject to the same Ministerial Statement of Expectations as Dairy Food Safety Victoria. This can be found above at 3.40.

3.69 PrimeSafe’s functions include control and review of standards for construction and hygiene at meat and seafood processing facilities. This control is achieved through a licensing and inspection system which includes the auditing of food safety programs to ensure the standards are maintained. PrimeSafe also regulates the construction, hygiene and maintenance of meat and seafood transportation.

96 Ibid.



3.70 The food safety program in place at all licensed meat processing facilities ensures compliance with appropriate Standards. Issues of non‐compliance with Standards are identified during audits and reported to PrimeSafe to determine the required corrective action, which may include additional audits.

3.71 Supermarkets and mixed food businesses handling and processing meat remain subject to the Food Act 1984 and supervised by local government. These businesses are required to comply with the Victorian Standard for Hygienic Production of Meat at Retail Premises under a Memorandum of Understanding between PrimeSafe and local government.

3.72 PrimeSafe utilises three levels of compliance control programs determined by the severity and immediacy of the threat to public health:

Level one – intensified audit frequency Level two – prohibition notice Level three – prosecutions.

3.73 PrimeSafe will investigate all complaints in relation to:

The operation of an unlicensed facility or vehicle Food safety issues or non‐compliance with the appropriate Standards at a

licensed meat, poultry or seafood processing facility The service delivery of PrimeSafe A breach of one or more of the Information Privacy Principles under the

Information Privacy Act 2000.

3.74 PrimeSafe does not investigate food that is fit for human consumption but considered to be of poor quality.

VICTORIAN COMMITTEE OF FOOD REGULATORS

3.75 The Victorian Committee of Food Regulators was established in 2010, to strengthen existing arrangements between the food regulators and government. Membership of the Committee comprises:

Mr Luke Wilson, Executive Director, Department of Primary Industries (Chair) Ms Pauline Ireland, Assistant Director, Food Safety and Regulation,

Department of Health Mr Michael Concas, Senior Governance and Legislation Analyst, Department of

Planning and Community Development Ms Jane Harris, Principal Policy Advisor, Consumer Affairs Victoria, Department

of Justice Ms Margaret Darton, Manager Food Policy, Department of Primary Industries Mr Brian Casey, Chief Executive, PrimeSafe Dr Catherine Hollywell, Chief Executive Officer, Dairy Food Safety Victoria Mr Rob Spence, Chief Executive Officer, Municipal Association of Victoria.

3.76 The Victorian Committee of Food Regulators was created in response to a recommendation from the Victorian Competition and Efficiency Commission’s 2007



Inquiry, Simplifying the Menu: Food regulation in Victoria.97 It reports to the Minister for Health and the Minister for Agriculture and Food Security.

3.77 Mr Jeff Hole, Executive Director, Victorian Competition and Efficiency Commission explained the rationale for the recommendation:

The idea behind that was to address some of the concerns about inconsistencies, duplication and overlap between the three regulators where there was an interface between them. So the idea was that the government would establish this committee to basically sort those things out as an alternative to merging those groups, which would have had some obvious major transition costs associated with doing that. It was felt that that was a low‐cost way to address some of those inconsistencies.98

3.78 Mr Hole added that it was anticipated that the Victorian Committee of Food Regulators would be able to use risk‐based analysis to help the Victorian Government direct its resources in a way that will have the most impact on food safety.

3.79 The Victorian Committee of Food Regulators initially focussed on developing a strategic plan for food regulation for Victoria99 and reviewing the existing Memorandum of Understanding between food regulators and local councils. Its Terms of Reference require it to ensure the Victorian food regulatory system:

Improves public health outcomes Improves coordination of regulators Provides greater consistency of implementation Improves industry performance Improves efficiency Provides more confident consumer participation in markets.

3.80 Other requirements include:

Regularly monitor performance of the food safety strategic plan and co‐ordinate reports to responsible ministers

Oversee a common approach to food safety performance reporting systems and provide an annual report, through the Committee representatives, to the Minister for Health and the Minister for Agriculture and Food Security

Ensure that relevant recommendations by the Victorian Competition and Efficiency Commission are addressed

Identify measures to improve the efficiency and effectiveness of the operations of the Victorian food regulatory system

97 Victorian Competition and Efficiency Commission, Simplifying the Menu: Food regulation in Victoria, Victorian Competition and Efficiency Commission, Melbourne, 2007.

98 Mr Jeff Hole, Executive Director, Victorian Competition and Efficiency Commission, Public Hearing, Melbourne, 12 November 2012.

99 Available at: www.dpi.vic.gov.au/agriculture/about‐agriculture/food‐regulators‐committee/strategic‐plan‐for‐food‐regulation‐in‐victoria‐2011‐2014.



Examine the scope of regulatory and non‐regulatory approaches for improving the performance of the food regulatory system

Consult with the Food Safety Council and other relevant government bodies on matters as appropriate

Serve as a forum to share knowledge and experience.100

3.81 The Victorian Committee of Food Regulators is not a statutory committee. It operates by consensus and has no power to direct the food regulatory agencies.101

3.82 Dr Hollywell explained the way in which the Victorian Committee of Food Regulators can better define the existing boundary between the regulators and local councils:

I am on the Committee of Food Regulators, which has just been reinstated by agreements between the health minister and our Minister for Agriculture and Food Security. Under that MoU we do try to ensure that there is a more streamlined and simplified approach and a more risk‐based approach that we share, so we have made some changes recently which cover ice‐cream manufacturers and frozen yoghurt and for retail to be basically licensed through local government. That is just recent; the ink is just drying on that.

Some of the challenges in that area are that there are 79 local governments, and there is a fairly high turnover of staff. We need to have smarter ways, I think, of sharing information and communicating who is doing what more effectively and efficiently, because some of the issues that we deal with are the result of perhaps people’s expectations being raised by getting a confused message from another party that leads them to believe we either will or will not do something. That can be a little bit problematic, so we need to be meeting regularly and communicating better. I think the Committee of Food Regulators does do that very well. That MoU is not an on the shelf piece of paper. It is something that we will change, update and make sure that it reflects, in layman’s terms, exactly what we are doing so we can use that as a communication tool to help people understand.102

3.83 Similar evidence was provided by Mr Rob Spence, Chief Executive Officer, Municipal Association of Victoria.103

3.84 The Rural and Regional Committee notes comments from the Victorian Auditor‐General’s Office that:

While the Committee of Food Regulators (CFR) provides an effective coordinating role, the system’s effectiveness in driving improved food

100 Victorian Auditor‐General’s Office, Agricultural Food Safety, Victorian Government, Melbourne, 2012. 101 Ibid. 102 Dr Catherine Hollywell, Chief Executive Officer, Dairy Food Safety Victoria, Public Hearing, Melbourne, 20 November

2012. 103 Mr Rob Spence, Chief Executive Officer, Municipal Association Victoria, Public Hearing, Melbourne, 20 November 2012.



safety outcomes is weakened by the narrow focus of the CFR’s draft strategic plan, unclear accountability for achieving the plan, and an absence of information about the performance of the food safety system.104

3.85 The Committee also makes this observation about performance reporting at 9.82.

3.86 The Auditor‐General also recommended that the Committee of Food Regulators expand its strategic plan to:

Include a common strategic direction for food safety outcomes from primary producer through to the consumer

Identify statewide aims, outcomes, and performance indicators and targets for food safety, in addition to the regulatory goals already identified

Be based on an understanding of how its actions will contribute to achieving its aims

Assign responsibilities and resources for delivering the actions required to achieve the objectives.105

3.87 The Rural and Regional Committee accepts that the Committee of Food Regulators is a ‘work in progress’ and looks forward to being informed of its achievements in improving the efficiency and efficacy of the food safety regulation system in Victoria. If the Committee of Food Regulators can align its approach with the expectations of the Auditor‐General that approach will be welcome.

MEASURE THE EFFECTIVENESS OF REGULATION

“I think PrimeSafe has done an excellent job. I am not bagging anyone personally … When we came in in the 80s there was meat substitution going on widely, there was corruption and supermarket buyers were getting bags full of cash to put second‐rate meat products on supermarket shelves. It was mind boggling. People were using rotten meat to make salami. We had the Garibaldi incident, in which a child died in South Australia. No‐one wants that. PrimeSafe – and I assume Brian Casey was a part of that – was excellent at getting a lot of crooks out. So it is a great policing arm. Its origins go back to the 90s, when there were a lot of crooks in the industry.” Mr Dean Russell, Gisborne

“The kind of relationship we have with Dairy Food Safety is that we are not frightened of audits or regulation. We think they are important for our industry, and we want them there.” Ms Ann‐Marie Monda, Sutton Grange

104 Victorian Auditor‐General’s Office, above n 100. 105 Ibid.



“Meat and dairy are definitely the leaders within our organisation and I think that has come from PrimeSafe and Dairy Food Safety.” Mr Chris Melville, Mount Waverley

“As an agency body, and we deal with many agency bodies, [Dairy Food Safety Victoria] are an incredibly efficient, professional and very outcomes‐focused agency and our experience in dealing with them has been very good over many years.” Mr Reg Weine, Derrimut

“Victoria has the best system in Australia.” Mr Gary Hardwick, Kyneton

3.88 Measuring the effectiveness of food safety regulation is difficult. Foodborne illness rates may be one way to do this.

3.89 The 2005 report Foodborne Illness in Australia: Annual incidence circa 2000 showed that contaminated food caused approximately 5.4 million cases of gastroenteritis per year, along with 6,000 non‐gastrointestinal illnesses and 42,000 episodes of long‐term effects (chronic sequelae). Foodborne illness also led to 1.2 million visits to medical practitioners, over 300,000 prescriptions for antibiotics and 2.1 million days of work lost each year.106 The annual cost of these illnesses to individuals, business, health care services and government was estimated to be more than $1.2 billion.107

3.90 These figures are found in most research on foodborne illness outbreaks in Australia. They are also referred to by OzFoodNet, the Department of Health and Ageing body established in 2000 to collaborate with Australia's state and territory health authorities and provide better understanding of foodborne disease outbreaks.108

3.91 In Victoria, the Department of Health refers to a 2007 study by the Victorian Competition and Efficiency Commission109 which spread these figures proportionally across the states to estimate that there are 1.3 million cases of foodborne illness in Victoria each year at a cost of $400 million. The Department of Health also draws on the Victorian Competition and Efficiency Commission in stating that:

There is currently no reliable way to estimate the contribution of food regulation to food safety. For example, many foodborne illnesses are caused at home rather than by the food‐handling practices of businesses. Cultural shifts in food preferences, warmer weather, and the rising proportion of the population aged over 65 might also influence foodborne illness.110

3.92 It is thought that only a small proportion of illnesses are reported – infections are not notifiable and patients do not always seek medical attention or receive a specific

106 Quoted in: Department of Health and Ageing, The Annual Cost of Foodborne Illness in Australia, Commonwealth of Australia, Canberra, 2006.

107 Ibid. 108 See: www.ozfoodnet.gov.au. 109 Victorian Competition and Efficiency Commission, above n 97. 110 Department of Health, Food Safety in Focus: Food Act Report 2010, Victorian Government, Melbourne, 2012, p 20.



diagnosis when they are sick.111 For example, an article in the journal Clinical Infectious Diseases states that although there were around 8,400 cases of salmonella infection reported in Australia between 2001–2007, the actual number of infections may have been as high as just under 50,000 cases.112

3.93 However, a Victorian Auditor‐General’s Office report argued that foodborne illness rates are not useful measurements of the efficacy of food safety regulation because:

Food safety is affected by many factors Mild illnesses often remain unreported Detecting trends in data is difficult.113

3.94 The Committee believes that ongoing market access is another way of measuring the efficacy of food safety regulation. For example, Fonterra told the Committee that Dairy Food Safety Victoria’s good reputation overseas plays an important role in maintaining market access for Australia’s dairy industry.114

3.95 Measuring the efficacy of food safety regulation is discussed in more detail in ‘Performance reporting’ in Chapter 9.

3.96 The Victorian Auditor‐General’s Office report also found that:

Fewer than two per cent of Dairy Food Safety Victoria and PrimeSafe licensees have repeat breaches

Around six per cent of licensees commit significant compliance breaches Rates of product recalls are low, with nine for dairy, four for meat and none for

seafood products manufactured in Victoria between January 2009 and August 2011

Neither Dairy Food Safety Victoria nor PrimeSafe prosecuted any licensees in 2009–10 or 2010–11.

3.97 The report concluded:

Good licensee compliance rates and low levels of enforcement and food safety incidents for dairy, meat and seafood products, indicate that the different approaches used by DFSV and PrimeSafe work well to promote compliance. PrimeSafe has detailed processes and criteria guiding how it applies its different enforcement powers, including how it responds to repeat offenders. DFSV has general enforcement guidance, and is developing a new enforcement model to guide its graduated approach, but does not specify criteria for increasing enforcement, instead taking a case‐by‐case approach.115

111 Kirk M, McKay I, Hall G et al, ‘Foodborne disease in Australia: the OzFoodNet experience’, Clinical Infectious Diseases, 2008, Vol. 47, pp 392–400.

112 Ibid. 113 Victorian Auditor‐General’s Office, above n 100. 114 Ms Carol Bate, Regulatory Manager, Mr Brett Nilon, Site Manager, Mr Nicholas Lembo, Communications, Fonterra, Site Visit, Stanhope, 21 November 2012. It was suggested to the Committee that even though private sector standards may be higher than those required by regulations – as discussed in Chapter 4 – overseas markets are assured by Dairy Food Safety Victoria’s role in the production chain.

115 Victorian Auditor‐General’s Office, above n 100, 15.



3.98 In 2011/12:

Dairy Food Safety Victoria investigated 31 serious incidents, 23 of which were controlled within company food safety program procedures and eight dairy food product safety incidents were assessed through the Dairy Food Safety Victoria risk assessment process and managed in partnership with the Department of Health and industry

Two successful prosecutions for breaches of the Dairy Act 2000 were undertaken

Dairy Food Safety Victoria authorised officers issued nine orders under section 46 of the Act to stop the production and control the movement of dairy food known or suspected to be unfit for human consumption

Five licensees (dairy manufacturers) were required to undergo additional audits conducted by a Dairy Food Safety Victoria authorised officer and charged at the enforcement rate. This followed the identification of several serious non‐compliance issues with licence requirements during scheduled audits.116

3.99 In 2011/12:

PrimeSafe completed one prosecution for a breach of the Meat Industry Act 1993

There were no prosecutions for the Seafood Safety Act 2003.117

3.100 Apart from the specific exceptions discussed elsewhere in this Report – regulation covering live seafood, yabbies and retail butchers – the evidence heard throughout this Inquiry about the impact of food safety regulation on Victorian businesses was overwhelmingly positive. As the comments above show, the regulators are generally spoken of very well. In particular, evidence was received on Dairy Food Safety Victoria’s constructive working relationship with the dairy industry and the way in which PrimeSafe has improved standards in the meat industry, particularly when it commenced operations.

3.101 The Committee heard from a number of witnesses that Victoria’s food safety framework – that is, independent regulatory bodies maintaining standards – is also working well, as has been mentioned several times in previous reports from the Victorian Competition and Efficiency Commission and the Victorian Auditor‐General’s Office (which also showed that most regulatory issues were to be found in the retail sector rather than primary production and processing).

3.102 The Committee views this is as evidence of Victoria’s mature food industry and that the benefits of regulation outweigh the costs. As Mr Casey said when discussing the high compliance rate among food businesses in Victoria regulated by PrimeSafe, this is as much to do with the hard work and high standards of businesses themselves as with PrimeSafe’s regulatory system.

3.103 Mr Casey said: “Most licensees who have been identified as non‐compliant have in fact remedied the situation quickly and efficiently and gotten on with their business

116 Dairy Food Safety Victoria, Annual Report 2010–11, Dairy Food Safety Victoria, Melbourne, 2011. 117 PrimeSafe, Annual Report 2011–12, PrimeSafe, Melbourne, 2012.



... To give some context, we are talking about 0.6 of one per cent of our licence base that was closed last year.”118

3.104 Mr Ross Cairns, Senior Environmental Officer at Wangaratta Rural City Council, said: “Generally, if you ask a proprietor to do something and you give them a reason why they need to do it, that is usually sufficient and the work gets done or the rectification gets done.”119

3.105 The Committee acknowledges the role played by both PrimeSafe and Dairy Food Safety Victoria in improving food safety in Victoria and congratulates them on their hard work and commitment to the food sector, which is such an important part of Victoria’s economy.

3.106 The Committee also believes that, in acknowledging the way in which the sector has matured, both regulators should further their efforts to evolve with the sector by working with government to develop more efficient regulatory and non‐regulatory food safety tools in Victoria. This is discussed further in Chapter 9.

118 Mr Brian Casey, Chief Executive, PrimeSafe, Public Hearing, Melbourne, 20 November 2012. 119 Mr Ross Cairns, Senior Environmental Officer, Wangaratta Rural City Council, Public Hearing, Wangaratta, 22 November 2012.


How the auditing process works

KEY MESSAGES

Formal food safety programs are welcomed by industry as a way to reinforce good practice, particularly those businesses undertaking such practices regardless of the regulatory requirements.

The cost of meeting food safety regulation requirements includes the cost of auditing and time spent preparing for and responding to audits.

Regulatory compliance requirements are often conflated with market access requirements, leading to a sense of over‐regulation.

Some businesses argue that PrimeSafe and Dairy Food Safety Victoria should recognise private sector standards, which are considered by some to be higher standards than those of the Victorian regulators.

An increase in the acceptance of electronic records where appropriate would ease the burden of food safety regulation.

The process whereby auditors move on after auditing a business a set number of times is a source of frustration for some businesses.

The poultry industry in Victoria offers a good case study of the ways in which duplication can occur with both regulated and private sector requirements.

4.1 This chapter discusses the auditing process in terms of regulatory standards as well as private sector standards.

4.2 Food businesses are audited to prove they are compliant with food safety regulation. The audit fees contribute to the cost of regulation (along with regulators’ fees) and impose a particular burden on small business.



4.3 The auditing process, which includes maintaining records and responding to issues raised during an audit, is further complicated for businesses that supply more than one customer. This is particularly the case for businesses supplying supermarkets with their own Quality Assurance program that must be satisfied.

FOOD SAFETY PROGRAMS

‘Given the potential for health impacts, the regulatory approach needs to be underpinned by effective compliance monitoring and enforcement activities to provide assurance that licensees are adhering to regulations and licence conditions.’ Victorian Auditor‐General’s Office

4.4 Food safety programs form the core of Australia’s food safety framework.

4.5 Food safety programs are written documents outlining the ways in which a food business will identify and eliminate risks to food safety. They are required for businesses at all stages of the food production chain. Primary producers and processors must complete a food safety program approved by their relevant regulator before they begin operating.120 This program is then audited at intervals of decreasing frequency as the business proves its competency until reaching the minimum level determined by the regulator. For example, poultry processors are audited every six months.

4.6 In Australia, most food safety programs are based on a combination of the international standards established by Codex Alimentarius121 and the principles of a hazard analysis critical control point (HACCP) plan. For example, for PrimeSafe licensees a HACCP‐based food safety program must consist of the following components:

Organisational chart Cleaning program Maintenance program Pest control program Training program Calibration program Traceability program Recall program Management review Internal review HACCP plan to identify, evaluate and control hazards that are significant for

food safety.122

120 Food Regulation Standing Committee of the Australia and New Zealand Food Regulation Ministerial Council, ‘Protocol

for the development of Primary Production and Processing Standards by FSANZ’. 121 See: www.codexalimentarius.org. 122 See: www.primesafe.vic.gov.au.

Chapter four: How the auditing process works


4.7 This is an internationally accepted standard and a requirement which the Committee spoke to many businesses about.

PRIVATE SECTOR STANDARDS

4.8 As well as the Primary Production and Processing Standards, primary producers and processors must meet the standards required by companies they are supplying. Examples of local standards include SQF (Safe Quality Food – Coles), WQA (Woolworths Quality Assurance) and Freshcare (accepted by several companies). International standards include ISOs,123 GFSI (Global Food Safety Initiative124) and BRC (British Retail Consortium125).

4.9 Each standard will have an ‘owner’ who determines the requirements that the certification bodies – auditors, also known as Conformity Assessment Bodies – must check during the auditing process.126

4.10 The Committee spoke with a number of businesses and auditors about these standards.

FOOD SAFETY AUDITS

4.11 In Victoria, food safety programs can follow a template provided by Dairy Food Safety Victoria and PrimeSafe or designed by the business itself. Once the plan has been approved it is audited at a frequency determined by the relevant regulator, to ensure all parts of the plan are being complied with. The audits are usually carried out by authorised third party auditors, although there are several exceptions including:

PrimeSafe audits fishing boats itself Poultry processors audit poultry producers (growers) on behalf of PrimeSafe Dairy companies audit dairy farmers on behalf of Dairy Food Safety Victoria.

4.12 Auditors are required to report all instances of non‐conformance – minor, major and critical – to the regulator, who will then decide on what action, if any, is to be taken. This can range from advice on how to correct the non‐conformance – referred to as a ‘corrective action’ – through to cancellation of a licence for a ‘critical non‐conformance’ i.e. something that presents a serious and immediate risk to food safety. Critical non‐conformance findings can also lead to prosecutions, although these are relatively rare. (For more audit terms and definitions see Appendix 4.)

4.13 In short, food safety auditing is the interaction of food businesses, legislation, food safety auditors and the compliance system. In 2003, the Food Regulation Standing Committee of the Australia and New Zealand Food Regulation Ministerial Council

123 See: www.iso.org/iso/home.html. 124 See: www.mygfsi.com. 125 See: www.brcglobalstandards.com. 126 Mr Marc Barnes, Manager Food Division, NCS International, Public Hearing, Melbourne, 12 November 2012.



(now the Legislative and Governance Forum on Food Regulation) developed a set of ‘Policy Principles’ guiding food safety management in Australia.

4.14 One such principle states that food safety programs ‘… should be implemented in those businesses / sectors involved in operations identified as high risk and where the benefit to cost ratio justifies the implementation of food safety programs’.127 How to define ‘high risk’ and ‘low risk’ businesses is an important and ongoing topic of discussion among food regulators and governments.

4.15 In Bairnsdale, Mr Ron Paynter, a dairy farmer from Ellinbank, explained the way in which the auditing process can reinforce good business practices, by helping a business focus on the important components of its food safety program:

I think what the audit process does is actually bring to front of mind all of those key elements that are in the food safety plan. With Fonterra there are a couple of points where we touch up against it. It is not just the audit process; it is that process of sitting down. Each year as part of the requirements for a licence we have to do an annual review of our food safety plan. This diary process actually makes us do that. We have to sit down and review what we did in the last 12 months, so we have contact with it there. We actually have contact with our food safety plan whenever we have an interaction with the factory or factory field staff to do with any of the quality issues because quality is underpinned by that food safety plan and then we have that formal process on an annual basis where we actually have someone come in and run through a proper checklist.128

4.16 The businesses that the Committee met with in rural and regional Victoria were supportive of food safety programs.

FOOD SAFETY AUDITOR APPROVAL

4.17 Dairy Food Safety Victoria and PrimeSafe authorise auditing companies to carry out audits of food safety programs and prepare reports outlining the level of compliance. Auditing companies must first be approved by JAS‐ANZ (Joint Accreditation System of Australia and New Zealand), the government appointed accreditation body for Australia and New Zealand responsible for providing auditor accreditation in the fields of certification and inspection. Accreditation by JAS‐ANZ demonstrates the competence and independence of the auditors.129

4.18 In 2006, FSANZ released its National Food Safety Audit Policy. Two of the policy’s guiding principles relevant to this Inquiry are:

Consideration of the special needs of small and medium‐size businesses and rural and remote businesses

127 Above n 120. 128 Mr Ron Paynter, Owner, Paynter Farms Ellinbank, Public Hearing, Bairnsdale, 17 October 2012. 129 See: www.jas‐anz.com.au.



A flexible approach so that state and territory governments can implement the national audit requirements in ways that reflect their different administrative and legislative arrangements while still adhering to their obligations under the Food Regulation Agreement 2002 (as discussed in Chapter 2).130

4.19 Auditors work within their own code of expertise, what is known as their ‘scope’. It can take up to two years for an auditor to be fully trained and ready to enter the field. Professional development then keeps them up to date with latest industry developments and technology. For example, auditors working at NCS International must attend mandatory training for three days every six months as a condition of employment.131

AUDITING PROCESS – COSTS AND REQUIREMENTS

4.20 During this Inquiry the Committee spoke with several mid‐ to large‐size food businesses and found that for these businesses the cost of meeting food safety requirements equates to around three to four per cent of turnover.132

4.21 For example, the Committee conducted a site visit at Hardwicks Meatworks in Kyneton. Hardwicks is audited twice a year by SGS Australia, which covers the company’s ISO standards and PrimeSafe, Coles and Woolworths requirements. Management estimated the annual cost for the two audits at around $25,000.133

4.22 The Committee also conducted a site visit at K R Castlemaine and learnt that:

The twice yearly audits take around one week to complete The company may dedicate as many as 250 staff hours in the week leading up

to the audit, then 500 staff hours during the week of the audit Determining the compliance cost134 is difficult because as Quality Assurance

Manager Ms Rachel Wood said: “We do many of these [food safety] things anyway.”135

4.23 M C Herd, a meat processing facility in Geelong, told the Committee that its audits take two days to complete. The company allocates three staff members to work with the auditors during each audit, plus other staff members are interviewed during the process. Again, many food safety requirements are already met by internal processes built in to M C Herd’s business practices, with the company employing Quality Assurance staff, internal auditors and microbiologists.136

4.24 In South Australia, the Committee spoke with Mr Franz Knoll, Owner, Barossa Fine Foods. Mr Knoll said that he is audited four times a year by the South Australian

130 Implementation Sub‐Committee of the Food Regulation Standing Committee, National Food Safety Audit Policy, Food

Standards Australia and New Zealand, Canberra, 2006. 131 Mr Marc Barnes, above n 126. 132 Mr Reg Weine, Chief Executive Officer, Bulla, Public Hearing, Melbourne, 22 October 2012. Radfords Meats, Site Visit,

Warragul, 16 October 2012. 133 Hardwicks Meatworks, Site Visit, Kyneton, 4 September 2012. 134 As discussed in Chapter 1. 135 K R Castlemaine, Site Visit, Castlemaine, 4 September 2012. 136 M C Herd, Site Visit, Corio, 18 September 2012.



Government’s Meat Hygiene Unit, as well as completing an annual private sector audit.137

4.25 As with all business costs the impact on small businesses is greater.138

4.26 For small businesses, the fees paid to regulators are generally considered to be a small impost, in particular as they are based on production levels or ‘throughput’.139 However, the fixed cost of the audits can be of concern to small businesses.

4.27 For example, Mr Julian Benson, the Owner of Apostle Whey Cheese, a small cheese manufacturer based in Cooriemungle, told the Committee that he is audited twice a year at a cost of $500–600 per audit.140

4.28 Mr Simon Noble argued that the cost of audits in regional areas could be reduced through increasing the number of approved auditors in regional Victoria:

When they introduced PrimeSafe to the seafood industry in 2005, they did not guarantee that the audits would be $250 but they introduced a fee of $250 and that was going to be the audit fee. The very next year it went up to $350 and tomorrow’s is going to cost me $770 because now they drive specially from Melbourne, or Melbourne via Bendigo or somewhere ridiculous …

And we have one in Holbrook with whom I have been talking recently, but she has not had the chance to get back to me in time for this committee meeting. We also had … a fully accredited auditor in Albury who could have come out to my farm, as he was doing for my Flockcare audit, for $200 or $300, but PrimeSafe just say, ‘No, we only have four companies. That is all we register’ ... It means I have to pay someone to drive up from Melbourne to do the audit.141

4.29 The Committee acknowledges evidence from Mr Marc Barnes that auditors organise their regional trips into ‘milk runs’ in order to control costs.142

4.30 Other costs felt particularly by small businesses include the hiring and training of dedicated Quality Assurance staff, for both preparing for and responding to audits, as was explained to the Committee by Mr Geoff Dinning in Wangaratta:

Not only is there the cost but just with the HACCP there is a lot of work in relation to getting our workforce up to speed. They have got to go through a certification of accreditation to make sure that we meet the standards, and that is not only the accreditation side but it

137 Mr Franz Knoll, Owner, Barossa Fine Foods, Site Visit, Barossa South Australia, 2 November 2012. 138 Ms Sue McGorlick, Owner, Locheilan Cheese, Public Hearing, Castlemaine, 5 September 2012; Ms Ann‐Marie Monda,

Owner, Sutton Grange Organic Farm, Public Hearing, Castlemaine, 5 September 2012; Ms Kim Bailey, Administrative Officer, Southern Canning, Public Hearing, Portland, 20 September 2012.

139 For PrimeSafe fees see: www.primesafe.vic.gov.au/licensing. For Dairy Food Safety Victoria see ‘Fees and Charges’ at: www.dairysafe.vic.gov.au.

140 Mr Julian Benson, Owner, Apostle Whey Cheese, Public Hearing, Camperdown, 19 September 2012. 141 Mr Simon Noble, Owner, Brimin Lodge Murray Cod, Public Hearing, Wangaratta, 22 November 2012. 142 Mr Marc Barnes, above n 126.



is the other aspect of – between my business and the customer, the drivers are the most important people because they are the link between the business, so they have to be up to standard and also know about the food safety requirements.143

4.31 As well, businesses must factor in the maintaining of paper records and time taken for each audit, which for a small business generally can be anywhere from half a day to a full day, depending on the sector. This was explained by Mr Felix Gamze, a butcher and smallgoods maker:

So if I want to do some maintenance in my shop, as stupid as it may sound, instead of going and doing it and putting a bit of paint on somewhere, I actually have to document that I am thinking about doing that: I have identified it, we had a meeting with the staff, we identified that that bench needs some paint on it. I then have to put in my day diary that we have identified it and when I think the completion date of that may happen, and then when it does happen I put the completion date in and I sign it to say it has been done.

Then I have to transfer that into my internal management review to tell them all over again that I have done it and anything else that I have done. That is just one example. And then everything else that I do already in my day diary, which is check my temperatures, product testing et cetera, has to be duplicated two or three times to keep the auditor happy. I do not know anybody else who has to do that. That is not a cost burden as far as me handing over a cheque, but it is a huge cost burden in the time that I have to take sitting in front of my computer, and I type like this, to put those points across. Then if there is not enough detail, they do not accept it and I have to do it again, and I have had to do that before. So it is very frustrating …

The only way the running of my butcher shop has changed – and I have been in business now for 28 years, and my hygiene program and my maintenance program et cetera has been exactly the same and I keep it in good order – is that I have to do all the paperwork to substantiate everything that I have done, and it is just very, very time consuming.144

4.32 While the Committee understands the frustration of businesses having to document their every process, including the ones they would implement as a matter of professional pride regardless of regulatory requirements, it agrees with the explanation provided by Mr Brian Casey, Chief Executive of PrimeSafe. Mr Casey explained to the Committee that through identifying a fault or an area that needs improving businesses are proving their competency to the regulators.145

143 Mr Geoff Dinning, Owner, Dinning’s Kelly Country Dairy, Public Hearing, Wangaratta, 22 November 2012. 144 Mr Felix Gamze, Owner, Felix’s Plaza Meats, Public Hearing, Wangaratta, 22 November 2012. 145 Mr Brian Casey, Chief Executive, PrimeSafe, Public Hearing, Melbourne, 20 November 2012.



4.33 The Committee heard from other witnesses arguing that audits represent good value for money because they help improve business practices. For example, Mr Peter Thrum, Chief Financial Officer at Benalla Abattoirs said: “I think the $1,000 audit fee is quite reasonable for the flow of information that comes back from their findings etc. So it is good to know that you are doing the right thing and if there are any improvements they can recommend, well, they are there.”146

4.34 Mr Benson was one of several business owners the Committee spoke with who said much of the food safety testing and record keeping would naturally form a part of good business practice; for example, temperature control and hygiene.147

4.35 Mr Paynter, who is also Deputy President of United Dairy Farmers Victoria, said:

On what we would aim to do on farm – and probably for all farms in Victoria, if I put on the UDV hat – is that the whole issue of conforming with food safety regulations and requirements and indeed the quality requirements is something that people just embed into their business practice as a normal part of the routine and it is not a one‐off thing for when the auditor is coming in.148

4.36 It is therefore difficult to determine just how much food safety regulation can be considered ‘compliance costs’ (as discussed in Chapter 1).

4.37 The Committee believes that auditing costs for regional businesses in Victoria would be reduced by PrimeSafe accrediting regionally based auditors.

RECOMMENDATION 1

AUDITING PROCESS – PRIVATE SECTOR DEMANDS

“I am here today to talk to you about the unnecessary amount of paperwork that has been foisted upon us – and not necessarily by the government, either.” Mr Don Ward, Gorae West

146 Mr Peter Thrum, Chief Financial Officer, Benalla Abattoirs, Public Hearing, Wangaratta, 22 November 2012. 147 Mr Julian Benson, above n 140. 148 Mr Ron Paynter, above n 128.

That the Minister for Agriculture and Food Security work with PrimeSafe to:

Accredit more regional‐based auditors in Victoria. It is expected that the increased competition and reduced travel time will lower the costs of auditing for regional‐based businesses

Introduce a transparent process outlining the requirements to becoming an approved PrimeSafe auditor.



4.38 For the Committee, determining the cost of food regulation was further clouded by the realisation that when primary producers claim to be ‘over‐regulated’ they are frequently referring to the demands placed on them by the private sector, in particular supermarkets.149 It is important to note that many businesses find it hard to separate food safety legislative requirements from private sector Quality Assurance requirements, as explained in the Dairy Food Safety Victoria submission:

Business QA systems aim to consolidate regulatory and market access requirements into a single documented system. The programs encourage businesses to adopt a holistic approach to risk management. The format of these programs does not affect DFSV’s regulatory oversight of the elements that are required for dairy food safety. However, the integration of food safety and quality requirements into a single program may result in a licensee (particularly at farm level) having a perception of regulatory burden that confuses DFSV’s compliance requirements with the market access requirements.150

4.39 Ms Jackie Healing from Coles Supermarkets explained the difference between the many private sector requirements and food safety regulated requirements:

But the scope is very often not the same. So you could be AQIS certified for red meat export, but when you are making sausages for us you have to have a gluten management program, you have to have a nutritional compliance program, you have to have competency in labelling. AQIS does not even cover that, it does not look at that, it is not interested in that, it is not part of their scope ...

So the scopes are very different, and the food safety risks are far more than plain microbiological. There is food safety, and increasingly the allergens are our biggest source of issue, and non‐compliant labelling and non‐compliant weight control. AQIS, for example, never checks that; PrimeSafe never checks that. It is not in their scope.151

4.40 In Castlemaine, Mr Dean Russell, the Managing Director of Moira Mac’s Poultry and Fine Foods, spoke from the viewpoint of a poultry business that supplies supermarkets and fast food businesses:

Every month Woolworths, through WQA, is upping the ante. They are making things tighter and tighter. If you can supply Woolworths with

149 See: Mr Ian Halliday, Managing Director, Dairy Australia, Public Hearing, Melbourne, 22 October 2012; Ms Kathryn

Lockyer, Manager Accreditation Services Domestic, JAS‐ANZ, Public Hearing, Melbourne, 22 October 2012; Mr Reg Weine, above n 132; Dr Matthew Butlin, Chair, Victorian Competition and Efficiency Commission, Public Hearing, Melbourne, 12 November 2012; Mr Darryl Harrison, Policy Manager, Victorian Farmers Federation, Public Hearing, Melbourne, 12 November 2012.

150 Dairy Food Safety Victoria, Submission, Number 39, 3 September 2012, p 3. 151 Ms Jackie Healing, Quality Assurance Manager, Coles Supermarkets, Public Hearing, Melbourne, 12 November 2012.



unsafe food, that is a pretty clever thing to be able to do. You cannot do it; they are looking over your shoulder. You have to meet their view of the world – as well as Coles’s view of the world, ALDI’s view of the world, McDonald’s’ view of the world, Subway’s view of the world, Kentucky Fried’s view of the world. They all have whole departments, well resourced, to come up with their rules.152

4.41 Mr Adam Hazeldene, Technical Services Manager at Hazeldene’s Chicken Farms told the Committee that the company supplies Aldi, Woolworths and Coles. According to Mr Hazeldene, there is some crossover in the requirements, but he also confirmed that each supermarket has its own specific requirements that must be met.153 (The poultry sector is discussed below at 4.87.)

4.42 Fonterra revealed that meeting the private sector standards of Australia’s supermarkets is more onerous than satisfying the regulated standards. Fonterra is current working at obtaining the FSSC 22000 standard, which it says will satisfy around 80 per cent of all private sector requirements.154

4.43 Mr Marc Barnes, Manger Food Division, NCS International said that in his opinion competition between supermarkets is an impediment to determining a common standard:

… it is very difficult because what we do is all about brand protection, it is about access to markets, about risk mitigation and business improvement, not regulation. So it is a bit different. You would be pretty pushed to regulate Coles and Woolworths to accept the same standard, for example.155

4.44 In Bairnsdale, Mr David McKerrell from the East Gippsland Food Cluster explained the demands placed on the horticulture sector by the major supermarkets:

Mr McKERRELL — There have been enormous steps made forward in food safety in the last decade and they have been driven predominantly by the two major supermarkets. That is because they have worked out that there is a fair advantage in being able to say, ‘My product is safer than their product’, and they are using food safety as a marketing tool.

The CHAIR — So it is commercial; it is not government regulations that say that needs testing.

Mr McKERRELL — No, it is not government regulation. It is industry or whichever code of practice.

152 Mr Dean Russell, Managing Director, Moira Mac’s Poultry and Fine Foods, Public Hearing, Castlemaine, 5 September

2012. 153 Hazeldene’s Chickens, Site Visit, Lockwood, 5 September 2012. 154 Ms Carol Bate, Regulatory Manager, Mr Brett Nilon, Site Manager, Mr Nicholas Lembo, Communications, Fonterra, Site

Visit, Stanhope, 21 November 2012. For more on FSSC 22000 see: www.fssc22000.com/en. 155 Mr Marc Barnes, above n 126.



Mr TREZISE — It is an industry‐based code of practice. Is it just one code of practice or –

Mr McKERRELL — No, there are quite a few codes of practice. If you are a primary or direct supplier of Woolworths supermarket, for argument’s sake, and pack it into their crates or whatever, you would be required to have their quality assurance, which is called WQA – Woolworths Quality Assurance – and on top of that you would be required to have another HACCP‐based program like HACCP or SQF 1000 or Freshcare. If you are an indirect supplier but know that you are packing for somebody who sells to Woolworths and it is known, you have to have the same standards, and they require audits each six months. If you are an unknown indirect supplier, say, serving into a market agent in Melbourne or Sydney or wherever, and they are serving on to Woolworths, you would not be required to have the Woolworths standard, but you would be required to have a HACCP, the SQF and the Freshcare.156

4.45 Also in Bairnsdale, Mr Jim Ashcroft from Rose Dairy Company described the way in which dairy companies ensure the milk supplied by dairy farmers is of a high standard, not the least through the risk of financial penalties.157

4.46 It is worth repeating the Victorian Competition and Efficiency Commission’s findings in Chapter 1 that private sector requirements mean that food safety regulations impose ‘little, if any, additional cost’ over that incurred meeting private sector standards.158

4.47 When a food business has to meet several different private sector standards it is generally the case that an auditor will do one audit and then produce several different reports – to, for example, Coles, Woolworths and Aldi – based on the data collected during that audit.

4.48 Therefore the cost to a business includes maintaining food safety records. Further costs include a combination of the auditors’ charge for carrying out the audit and the charge for producing the different reports, as Mr Barnes explained:

It could be a separate report, though, a separate requirement, separate standards and a separate checklist, so the audit time does increase as well, not greatly. If it is a stand‐alone audit for, say, Metcash, or a stand‐alone audit for Aldi, with two days on each if it were separate, it would not be a four‐day audit. It is more likely to be about a two‐and‐a‐half‐day audit if you combine them. There are efficiencies, but the reporting generally is separate, and in the

156 Mr David McKerrell, Member, East Gippsland Food Cluster, Public Hearing, Bairnsdale, 17 October 2012. Horticulture

standards are discussed further in Chapter 8. 157 Mr Jim Ashcroft, Business Manager, Rose Dairy Co, Public Hearing, Bairnsdale, 17 October 2012. 158 Victorian Competition and Efficiency Commission, Simplifying the Menu: Food regulation in Victoria, Victorian

Competition and Efficiency Commission, Melbourne, 2007, p129.



reporting, generally, there are no efficiencies. The information goes in all different directions, but it has to be tailored to that program.159

4.49 Mr Russell spoke about the need for food businesses to develop a ‘matrix’ that meets all private sector and regulatory requirements, although he did acknowledge the difficulty of working in the field of food safety:

Like washing a dog, these standards would be easier if they would stop wriggling. Every year there will be new micro research that says the old listeria test – There is a great science philosopher, Karl Popper, who worked on falsifiability. These are right today, tomorrow a lot of them will be wrong. They are falsified because we learn something new. We are talking about microorganisms and there are millions of them out there. We have not identified them all yet. Someone is going to find one that is going to make you sick next year that we do not know exists now. So you cannot get a black‐and‐white rulebook ...160

4.50 The Committee heard evidence that New Zealand businesses face the same difficulties meeting the different private sector quality and government food safety requirements. Ms Kathryn Lockyer said:

Generally what happens in relation to supplying the local supermarkets is that they themselves will stipulate what they want, and because we have Progressive Enterprises and Foodstuffs — they are basically the two supermarket chains in New Zealand — they have their own supplier programs which they actually ask people to comply with.161

4.51 The Committee was provided with similar evidence in South Australia.162

4.52 Both Mr Casey and Dr Catherine Hollywell, the Chief Executive Officer at Dairy Food Safety Victoria, argued that businesses themselves have the responsibility and capability to reduce the impact of this duplication.

4.53 Mr Casey said:

I think businesses need to get smarter in terms of how they design their program. You would not want to have a completely separate program for PrimeSafe, a completely separate program for AQIS and a completely separate program for some other major customers. You

159 Mr Marc Barnes, above n 126. 160 Mr Dean Russell, above n 152. 161 Ms Kathryn Lockyer, above n 149. 162 Mr Geoff Raven, Manager Food and Plant Standards, Department of Primary Industries and Regions, Consultation,

South Australia, 1 November 2012.



really want to have a program which is yours which covers all fee requirements for all of those bodies. I think that makes it simpler.163

4.54 Dr Hollywell told the Committee about a dairy business that had recently overcome this problem thought its own restructuring:

They said to us, ‘Your auditors have just been into our company and as a result of your auditors coming I now have to have seven standard operating procedures for exactly the same part of a production system.’ That was rather alarming, and I said, ‘Let’s take a look at that; I’d like to understand why that’s happened’, and we went in and sat down with them and looked at their concerns.

In between they had actually taken a look at it themselves. So by the time I went in and spoke to them, which was two weeks later, and we sat down and looked at what the problem was they had actually solved the problem themselves. The problem was the way in which they had responded to the audit, so they needed to meet the requirements of Coles, McDonald’s, Qantas, you name it. All of those are proprietary QA programs; they are not going to change their QA programs.

That is their mark, as it is. But the company can have procedures that are flexible enough to accommodate each of those requirements if they are smart about it. That is where this had gone a little bit astray. They had an individual who was running this part of the line who, basically every time an auditor came in and said, ‘Why are you doing that? That’s not what your procedure says’, wrote a new procedure rather than thinking, ‘I’ve got to run seven different systems here. I need one procedure that covers the seven systems’. So the complaint was made. We took it really seriously. We went in and talked to them about it, and by the time we got there the problem had gone because they had solved it themselves.164

4.55 PrimeSafe and Dairy Food Safety Victoria have a mutual recognition agreement with DAFF Biosecurity, meaning food businesses who export are only audited by one regulator.165 Dairy Food Safety Victoria uses this agreement to ensure that higher standards to access overseas markets are not imposed on local producers – what is referred to as ‘regulatory creep’.166

163 Mr Brian Casey, above n 145. 164 Dr Catherine Hollywell, Chief Executive Officer, Dairy Food Safety Victoria, Public Hearing, Melbourne, 20 November

2012. 165 This agreement also satisfies one of the Hampton Review’s principles of regulation – businesses should not have to give

information twice – as discussed at 2.15. 166 Dairy Food Safety Victoria, above n 150, 4.



4.56 The Committee notes the argument that PrimeSafe and Dairy Food Safety Victoria should recognise private sector standards, such as ISO167 or GFSI, which are considered by some to be higher standards than those of the Victorian regulators.168

4.57 For example, the Committee was presented with evidence suggesting PrimeSafe should recognise the Australian Southern Rock Lobster Clean Green Product Standard, a program which combines standards for:

Environmental management Sustainability Food safety and quality Animal welfare Workplace health and safety.

4.58 Clean Green participants are audited by SAI‐Global, an independent third party auditor, against ISO 65:1996 and JAS‐ANZ Procedure 15. It was suggested to the Committee that the Clean Green requirements ‘… exceed most legislative requirements in most instances’.169

4.59 The Committee is aware of a line of thinking suggesting that PrimeSafe is obliged under the Seafood Safety Act 2003 to recognise private sector Quality Assurance programs or food safety programs where safe to do so. After close consideration of Section 10 of the Seafood Safety Act 2003 (‘Exemptions from licensing requirement’) this is not the opinion of the Committee.

4.60 The Committee accepts that Victoria’s food safety regulators’ statutory obligations make it difficult to sign off on a private sector standard as meeting all of the legislative requirements and guaranteeing safe food for the public, as Dr Hollywell explained:

Whether the food safety standard is higher or not I guess I am going to be pretty pedantic about that, because the food safety standard for Australia is the domestic food safety standard. We regulate that and believe that is the standard that needs to be met and that is the food safety standard.

Whether manufacturers want to put higher quality standards in there is where you then get into other market access and commercial considerations, so you might say the standard is higher or more onerous and an audit may well be more onerous, but the food safety requirements as deemed by us should be the same for everybody.

167 The PrimeSafe website states: ‘Any abattoir that can clearly demonstrate a capacity to effectively self‐manage their

quality assurance program or is ISO accredited can apply for a reduction in scheduled audits.’ The Committee heard that this is the case at Radfords Meats and Hardwicks Meatworks.

168 For example, see: Ms Kathryn Lockyer, above n 149; Ms Jackie Healing, above n 151; Mr Frank Herd, Chairman, Australian Meat Industry Council, Public Hearing, Melbourne, 12 November 2012. Conversely, Ms Michelle Hill, Quality Assurance Manager, Warrnambool Cheese and Butter suggested that private sector standards such as ISO should recognise Dairy Food Safety Victoria audits.

169 Southern Rocklobster Ltd, Submission, Number 30, 3 September 2012, p 4.



When it comes to recognising an external audit activity and a QA program that resides elsewhere as meeting our requirements, the challenge for us will be how we monitor that and how we provide the necessary assurance that I presume government is going to want to continue to provide to the consumer that dairy food products are safe in Victoria. If we are to be providing an assurance function, I need to be able to put my hand on my heart and say, ‘We have undertaken assurance activity’, and that will be the challenge.170

4.61 The Committee also notes comments in the Victorian Government submission to this Inquiry that private sector standards should not stand in for food safety regulatory requirements because ‘… this may unnecessarily increase the regulatory burden placed on businesses and would not necessarily be consistent with the principles of good regulatory practice and minimum effective regulation’.171

4.62 The Committee accepts that private sector standards may in fact be higher than regulated standards,172 although the evidence it received was not specific enough to make any conclusions about individual standards.

4.63 It is the Committee’s view that private sector standards should not replace regulated standards. One reason for this belief is that, as the Victorian Government submission argues, businesses not supplying, for example, the major supermarkets should not be required to meet the supermarkets’ standards. It may also be the case that private sector standards, with their inclusion of particular quality requirements, require businesses to do more than is necessary simply to ensure food safety, hence the Victorian Government’s concern about minimum effective regulation.

4.64 However, the Committee also believes that both PrimeSafe and Dairy Food Safety Victoria should work towards acknowledging private sector standards wherever the regulators are confident that all regulated food safety standards have been met.173

4.65 From the evidence gathered by the Committee it seems that there is room to streamline auditing requirements. In cases where there is clearly compliance with standards established by one body it would seem reasonable not to expect separate compliance to the same standards but for another body.

4.66 The regulators may wish to consider the recommendation made by JAS‐ANZ in its submission to this Inquiry, of developing ‘supplementary criteria’ where private sector standards do not fully cover regulated food safety standards.174

4.67 It is also the Committee’s view that the private sector should be doing more to reduce the impost of duplication among its suppliers in the primary industries. Referring to the meat industry in particular, the Australian Meat Industry Council

170 Dr Catherine Hollywell, above n 164. 171 Victorian Government, Submission, Number 45, 17 September 2012, p 13. 172 And as stated in Chapter 2, it may not be correct to assume that ‘higher’ necessarily means ‘better’. 173 Mutual recognition of audits is discussed in Australian Food and Grocery Council, Submission, Number 42, 11 September

2012, also in reference to cross‐jurisdictional recognition – see pp 15–16. 174 JAS‐ANZ, Submission, Number 38, 3 September 2012.



states in its submission to this Inquiry: ‘… there is a multiplicity of commercial audits of meat establishments. The solution therefore lies with the commercial sector.’175

4.68 The Committee notes the work already being done by the private sector to reduce duplication – for example, the GFSI standard and Food Safety System Certification standard – and will continue to monitor developments in this area.

4.69 Refer to Chapter 7 for a discussion of intrusion on dairy farms by multiples bodies and the concept of single on‐farm audits.

RECOMMENDATION 2

That the Minister for Agriculture and Food Security work with PrimeSafe and Dairy Food Safety Victoria to recognise private sector food safety standards where it is safe to do so, as one approach to minimising the cost of compliance faced by farms and other food businesses.

ELECTRONIC RECORDS

“You would think in ten or 15 years’ time everyone will be electronically transferring [data]. That is the way of the world.” Mr Rob Spence, Melbourne

4.70 The Committee heard evidence from food businesses that the record keeping burden associated with food safety regulation would be lessened by an increase in the acceptance of electronic records in preference to paper records.

4.71 For example, Mr Mike Shaw, a chicken producer and President of the Victorian Famers Federation Chicken Meat Group, told the Committee about the large number of vendor declarations that he holds on‐farm for his audits.176 The Committee also witnessed the volumes of paperwork kept by poultry processors during its site visit to Hazeldene’s Chickens.177

4.72 At a public hearing in Melbourne, the Committee asked Mr Marc Barnes, an auditor at NCS International, for his view on electronic records. Mr Barnes told the Committee that accuracy is more important than the medium, stating: “What matters is that the records can be validated. That is it. We do not care whether they are electronic or written in long script or chiselled onto a piece of granite. It does not matter. It is whether they can be validated or not.”178

4.73 It’s important to note that electronic records are not suited to every environment, as Mr Simon Noble, an aquaculturist, explained:

175 Australian Meat Industry Council, Submission, Number 19, 31 August 2012, p 3. 176 Mr Mike Shaw, President, Victorian Farmers Federation Chicken Meat Group, Public Hearing, Melbourne, 12 November

2012. 177 Hazeldene’s Chickens, Site Visit, Lockwood, 5 September 2012. 178 Mr Marc Barnes, above n 126.



My forms are all manual because of the fish shed environment. I have two sheds with an office area in‐between, but it does not lend itself to electronic equipment in there, so I tend to keep it all manually. It is just harvest and dispatch records, chemical records, pest control records, staff training records, induction records and daily cleaning records. I do not have a problem.179

4.74 According to Mr Peter Chomley, Director, Countrywide Pet Foods, electronic records are accepted by the Environmental Protection Agency and should also be accepted by PrimeSafe.180

4.75 The Committee is aware that some electronic records are accepted in Victoria but was unable to establish exactly to what extent and if their acceptance is determined by specific factors, such as the sector itself or individual auditor preferences. The Committee also notes that not all businesses have the capability of implementing electronic record keeping.

4.76 However, the Committee believes that those businesses with the capability of validating their food safety practices via electronic records should be allowed to do so wherever food safety is not compromised. As an example, temperature control can be recorded electronically and checked via regular calibrations.

RECOMMENDATION 3

That the Minister for Agriculture and Food Security, the Department of Primary Industries and the Department of Health, work with Dairy Food Safety Victoria and PrimeSafe to promote the increased use of electronic records for food safety audits.

INCONSISTENCIES IN THE AUDITING PROCESS

4.77 This sector discusses elements of the auditing process raised with the Committee.

4.78 It is accepted practice for individual auditors to do no more than three audits of a business before being replaced by a different auditor. Mr Barnes told the Committee that although it is valuable for an auditor to have a good understanding of a business, it is more important to avoid a potential conflict of interest in their professional relationships:

It is a requirement from some standard program owners. Because it is a requirement, we adopted it as our policy anyway. It is actually quite a good idea. I do not know whether it actually adds to audit costs. You kind of have to weigh up the reason why you are there or the auditor is there in the first place. It is good to have knowledge of a company, its systems and its processes and you could potentially shorten the audit duration by a build‐up of that knowledge, but on

179 Mr Simon Noble, above n 141. 180 Mr Peter Chomley, Director, Countrywide Pet Foods, Site Visit, Stanhope, 21 November 2012.



the other side of the coin there needs to be no conflict of interest from the auditor’s side. They have to be able to do their job unencumbered with history or too much of a relationship, I suppose, with the client.181

4.79 Similar evidence was given to the Committee by Ms Healing:

… you are looking for full independence in that space because that is your absolute position in terms of your due diligence and compliance with the law, so they have to be independent and inevitably that changes if you are very familiar with the site. It is just best practice. It is to protect the business and to protect the auditor.182

4.80 In Wangaratta, Ms Ceridwen Brown provided anecdotal evidence of the way in which over‐familiarity can have a negative impact on what should be a professional relationship:

I guess it is just like when we cheese makers get together and just talk anecdotally, so I do not really have an exact example of it, but there is talk that if one cheese maker gets to know their regulator really well they can often get away with a few other things that probably people in Victoria would not be able to get away with. It might be cracks in the walls, it might be just little things like that which for us would be a non‐compliance that they might be able to get away with. I cannot give you an exact example because it is hearsay, I guess, but I have been told by cheese makers in both Tasmania and South Australia particularly that it can depend on who their auditor is and they can be either very helpful or very disruptive.183

4.81 Based on discussions during the Committee’s public hearings throughout rural and regional Victoria, the reason for auditors moving on after three audits is not widely understood among food businesses. Further, many businesses dislike the practice. One reason is because different auditors may prioritise different requirements, creating inconsistencies in the auditing process.184

4.82 Ms Kristine Milburn, Production Manager at Glenloth Game, told the Committee that these inconsistencies are both frustrating and a source of concern for small businesses who may find the auditing process daunting:

… so you will have one auditor who will come in and see you and our HACCP, for example – and if you would like to have a look at our

181 Mr Marc Barnes, above n 126. 182 Ms Jackie Healing, above n 151. 183 Ms Ceridwen Brown, Assistant General Manager, Milawa Cheese Factory, Public Hearing, Wangaratta, 22 November

2012. 184 Mr Allen Snaith, Owner, Warialda Belted Galloway Beef, Public Hearing, Castlemaine, 5 September 2012; Mr Dean

Russell, above n 152.



HACCP plans from when we first wrote them to where they are now, 99 per cent of our changes have been when an audit has changed, because they say, ‘You should not write like this, you should write like that. Why have you written it like that?’. Because that auditor told us to. Then the next one comes in and it is the same thing because they all focus on different things …185

4.83 Even those businesses that do understand the reasoning behind this practice, such as Mr Chomley, may still find it frustrating to have to work with a different auditor so frequently.186

4.84 The Committee understands the importance of avoiding potential conflicts of interest in the food safety auditing process and that some level of inconsistency is unavoidable. Further, developing professional relationships with different auditors can help a business better understand all facets of food regulation, as Mr Simon Schulz told the Committee:

But we have had a variety as well, over the years, of different auditors. I think they usually cycle. We might have one auditor for two set audits and then another one will come in. That is usually good because when the auditor comes in, again they are not there with a big stick. They certainly go through your paper trail and look at the premises, but they give you recommendations as well. They pull you up where you have gone wrong and they document that and you have to rectify that before next time, but they also give you advice as well. Having that different experience from different auditors is, I think, invaluable.187

4.85 However, the Committee also acknowledges the frustration this practice can cause, in particular when auditors do not appreciate that they may be finding fault with a practice approved by a previous auditor.

4.86 As such, the Committee believes that it is important that PrimeSafe and Dairy Food Safety Victoria, as well as the third party approved auditors, are aware of this frustration and the concern these inconsistencies can cause. This is especially the case with small businesses that may not be confident in their relationship with regulatory bodies. There should be processes in place to remove these inconsistencies where possible.

POULTRY

4.87 The poultry industry in Victoria offers a good case study of how duplication can occur with both regulated and private sector requirements.

185 Ms Kristine Milburn, Production Manager, Glenloth Game, Public Hearing, Castlemaine, 5 September 2012. 186 Mr Peter Chomley, above n 180. 187 Mr Simon Schulz, Owner, Schulz Organic Farms, Public Hearing, Camperdown, 19 September 2012.



4.88 Under Standard 4.2.2, the Primary Production and Processing Standard for poultry meat, poultry growers are required to complete a Food Safety Management Statement showing how they comply with the Standard’s requirements.

4.89 Section 3 (‘General food safety management’) of the Standard states:

A poultry producer must systematically examine all of its primary production operations to identify potential hazards and implement control measures to address those hazards

A poultry producer must also have evidence to show that a systematic examination has been undertaken and that control measures for those identified hazards have been implemented

A poultry producer must operate according to a food safety management statement that sets out how the requirements of this Division are to be or are being complied with.

4.90 In its submission to this Inquiry the Victorian Farmers Federation provided a table outlining the many self‐regulatory mechanisms already governing poultry growers:

Table 1: Poultry food safety requirements188

Requirements of the National Poultry Standard

Poultry FSMS

VFF Chicken Care EMS*

Victorian Code for Broiler Farms (2009)

National Biosecurity Manual (2009)

Processor’s Company QA Programs**

Poultry production operations

Flock maintenance Live poultry transport Stockfeed Vet medicines and chemicals

Water supply Sourced poultry birds Litter Dead birds Poultry handler and health hygiene

Biosecurity Skills and knowledge Design, construction and maintenance of premises

Equipment and transportation

Pest control Traceability

*Environmental Management System. **Average profile of programs implemented by Ingham Enterprises, Hazeldene’s Chickens, Baiada Poultry and Turi Foods.

188 Source: Victorian Farmers Federation, Submission, Number 41, 10 September 2012.



4.91 In reference to the table above the Victorian Farmers Federation states: ‘There is little opportunity for a grower to identify participation in one program as compliance with the National Poultry Standard.’189

4.92 In Victoria, the Meat Industry Act 1993 does not extend to farms, meaning that PrimeSafe does not licence poultry growers. Instead, PrimeSafe ensures that the poultry processors have Quality Assurance systems in place with their contract growers that meet the general requirements in the Standard.190

4.93 Even though PrimeSafe does not audit growers directly there is still an impost on growers and processors. This is because of the paperwork needed to show that the national regulations have been satisfied, as Mr Shaw explained:

… we are even required to keep documentation about the source of our feed. Because it is a vertically integrated industry, the source of the feed is the processors. [The processor] sends me the feed and he has to send me paperwork to say that that feed is okay, and then I have to send him back the paperwork so he can keep it for his own records. It is the same for the delivery of the day‐old chickens, and how the pick‐up works. That is what we are dealing with. It is just ridiculous.191

4.94 As Mr Shaw stated, the poultry industry is a ‘vertically integrated’ industry, giving the processors a great deal of control over the producers or growers. This is explained in the Bendigo Commercial Poultry Producers’ submission to this Inquiry:

The broiler industry is unique in that the processor supplies and owns the chickens [and] feed and removal transport are directly under their control ... There is mandatory reporting of salmonella detected by veterinary staff, otherwise there is little, other than feed withdrawal for pick up, that a grower has any control in relation to public health – healthy birds are only likely to present a hazard when incorrectly handled in the final part of the food chain.192

4.95 Mr Alan Wilson, Group Executive General Manager, Inghams Enterprises Pty Ltd, and President, Victorian Chicken Meat Council, explained this structure through the perspective of a poultry processor:

Nearly all the growers are subcontractors. They are farmers and entrepreneurs in their own right, such as Mike [Shaw], and we supply day‐old birds to Mike. He then provides power and water. We supply the feed, he supplies the assets to grow them in and then at a certain period of time we will pick those birds back up from the grower. The grower really has very little influence, I would argue, in the overall

189 Ibid 190 Personal Communication, Ms Margaret Darton, Manager Food Policy, Agriculture and Food Industries Policy,

Department of Primary Industries, 17 December 2012. 191 Mr Mike Shaw, above n 176. 192 Bendigo Commercial Poultry Producers, Submission, Number 13, 29 August 2012, p 1.



food safety chain. At the end of the day the responsibility is passed down to ourselves anyway.193

4.96 This ‘vertical integration’ is the reason why the industry questions the need for regulations covering poultry producers. It is thought that a combination of commercial pressure and auditing of the processors should be enough to ensure a safe supply of poultry to the consumer.

4.97 Further comments were heard from Mr Casey:

Poultry production, 99 per cent plus of it, is produced for licensees of PrimeSafe. We therefore manage it by not licensing the farmer but rather requiring it to be managed under the food safety program of a processor. The question that should be asked is, ‘Was it necessary to do that, given that almost all poultry produced in this country is already covered under that process as it has occurred?’194

4.98 As Mr Shaw said:

I suppose we get back to the question: why did they need to bring this system in in the first place? Where was the demonstrable risk when you are dealing with a totally integrated industry. When it is all being controlled by a central person – i.e. the processor – why do you need to go up and down the supply chain in those circumstances when it is all being done anyway?195

4.99 Mr Shaw acknowledged the importance of public confidence in the poultry industry. However, “… all we have done is seen another level of compliance and paperwork issues for us to deal with to prove that we are doing what we were already doing before the system came in”.196

4.100 The introduction of Standard 4.2.2 is an example of why the Victorian Government is concerned that FSANZ does not always apply the principles of risk‐based regulation when devising national food safety regulations – and which may stem from the shortage of primary production representation at the Legislative and Governance Forum on Food Regulation.197 In its submission to this Inquiry, the Victorian Government states:

In most cases the Food Standards Australia New Zealand Act 1991 requires FSANZ to prepare a regulatory impact statement (RIS) when proposing amendments to the Code. The Commonwealth Office of

193 Mr Alan Wilson, President, Victorian Chicken Meat Council, Public Hearing, Melbourne, 12 November 2012. 194 Mr Brian Casey, above n 145. 195 Mr Mike Shaw, above n 176. 196 Ibid. 197 The Committee also heard evidence questioning the need for including bivalve molluscs in Standard 4.2.1 (Seafood)

when all states have signed up to the Australian Shellfish Quality Assurance Program, which monitors shellfish and the presence of harmful algae in harvesting areas. See Seafood Industry Victoria, Submission, Number 26, 3 September 2012; and Southern Rocklobster Ltd, above n 167. See also: Productivity Commission, Performance Benchmarking of Australian and New Zealand Business Regulation: Food safety, Commonwealth of Australia, Canberra, 2009.



Best Practice Regulation (OBPR) is responsible for assessing RISs prepared by national standards setting bodies, including FSANZ, and ensuring that they meet COAG requirements for best practice regulation … the Victorian Government is concerned about the level of scrutiny applied by the OBPR to RISs that have been used to support previous amendments to the Food Standards Code, including the introduction of PPP standards.198

4.101 The Committee notes that FSANZ is preparing to review the Primary Production and Processing Standards in 2013, in particular how the Standards address low risk food.199

4.102 Regarding duplication resulting from private sector requirements, the Victorian Chicken Meat Council, whose membership includes Baiada Poultry, Turi Foods, Hazeldene’s Chickens and Ingham Enterprises as well as their growers and associated suppliers, provided the Committee with a table outlining the number of days Ingham Enterprises spent hosting audits across 2011–2012. The time does not include preparatory work or follow‐up work following the audits:

198 Victorian Government, above n 171, p18. 199 Personal Communication, Ms Margaret Darton, above n 190.



Table 2: Food safety audits conducted at Inghams Victoria 2011–2012200 Au

dit

cond

ucted on

be

half of

Feed

mill

Kill &

Evisceratio

n

Pet foo

d

Boning

Value

Enha

nced

Detail Pa

cking

Furthe

r Processing

Distrib

ution

Tran

sportatio

n

Quick Service Restaurant

Days spent/audit

‐ 1–2 N/A 1–2 1–2 1–2 1 1 1

Audits p.a. ‐ 1–2 N/A 1–2 1–2 1–2 1 2 2Retailer #1 Days

spent/audit ‐ 1–2 ‐ 1–2 1–2 1–2 1–2 1–2 1–2

Audits p.a. ‐ 1 ‐ 1 1 1 1 1 1Retailer #2 Days

spent/audit ‐ 1–2 ‐ 1–2 1–2 1–2 1–2 1–2 1–2

Audits p.a. ‐ 2 ‐ 2 2 2 2 2 2PrimeSafe Days

spent/audit ‐ 1 1 1 1 1 1 1 1

Audits p.a. ‐ 2 2 2 2 2 2 2 2AQIS Days

spent/audit ‐ 1/2 1/2 1/2 1/2 1/2 ‐ ‐ ‐

Audits p.a. ‐ 4 4 4 4 4 ‐ ‐ ‐Inghams Days

spent/audit 1 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Audits p.a. 2 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

4.103 The Victorian Chicken Meat Council states that removing this audit duplication would lead to great savings in the industry:

In financial audits one professionally recognised and regulated auditor body (KPMG, Deloittes, etc.) audits an enterprise in all of its facets and provides one comprehensive report to meet the needs of all stakeholders. There are massive economies of scale available to be gained if this equally important area of our industry is similarly regulated and would be improved if a consistent national system were invoked for compliance verification.201

200 Source: Victorian Chicken Meat Council, Submission, Number 21, 3 September 2012, p 3. 201 Ibid.


A local approach

KEY MESSAGES

Low risk businesses resent what they believe is unnecessary regulation.

Some businesses have experienced an adversarial approach from the regulators or their approved auditors.

Local government is well placed to monitor food safety requirements for all small retail food businesses, including having a working understanding of earned recognition.

Many small retail food businesses are more comfortable working with local government than the state regulators.

Food safety regulation in New Zealand operates on a two‐tier basis with responsibility shared between territorial authorities and the federal government.

Measures for non‐compliance taken by regulators should be fair and transparent.

“I think in a lot of instances things are better administered locally.” Mr Daniel Encel, Walkerville

5.1 Throughout this Inquiry evidence received varied depending on various factors including the size of the business providing information and advice to the Committee based on their experience in the food sector. The most negative evidence surrounding food safety regulation was received from small businesses. Although this was noted across all sectors, evidence was particularly strong concerning the seafood industry and retail butchers.

5.2 The Committee received submissions and heard evidence from small businesses complaining about the aggressive approach taken by PrimeSafe. In some cases they may be referring to a PrimeSafe approved auditor. Mr Brian Casey, PrimeSafe’s Chief



Executive, explained that, aside from wildcatch fishers, PrimeSafe staff do not conduct audits:

Unless you come up under our repeat corrective action program, unless you come up under some sort of random sampling monitoring program ... we would not even go to the facility. So to suggest that people have been fully compliant but it was a big, hard slog and somehow PrimeSafe was involved in there, we just would not be at the facility.202

5.3 The Committee believes that both PrimeSafe and Dairy Food Safety Victoria are responsible for the actions of auditors they approve to act on their behalf. It also accepts that small businesses would naturally consider the actions of auditors as being those of PrimeSafe or Dairy Food Safety Victoria.

5.4 In this Report the Committee does not engage in a forensic examination of the behaviour of the two regulators, not least because as mentioned in Chapter 3 the overwhelming majority of evidence received regarding the food safety system in Victoria and its regulators is positive.

5.5 Rather, the Committee is of the view that most frustration felt by industry is caused by the regulators operating in areas where there is not a ‘natural fit’; that is, the fault does not lie with the regulators themselves, rather with the fact that the legislation requires them to engage with small businesses who:

Should not be regulated (as is said to be the case with the low‐risk wildcatch sector discussed in this chapter)

Or would be better served being monitored by local councils.

FEAR OF RETRIBUTION

5.6 Much of the negative evidence the Committee heard was provided confidentially, with some small businesses concerned about going on the record for fear of being ‘punished’ by the regulators, through increased audit regimes, for example. The Committee does not have the knowledge to state what drives this fear of retribution, nor does it think the majority of food businesses feel this way. It also understands that businesses receiving non‐compliance reports should expect a temporary increase in their auditing frequency until they have been able to prove compliance. Regardless, the Committee does feel the need to inform the regulators that this fear does exist among some businesses.

5.7 Those who did attend public hearings to express their frustration with the food safety system in Victoria included Mr Nathan Wolter of Huon Distributors, who told the Committee: “The problem that we face more than anything is that butchers are actually scared to say anything about the laws or to complain to PrimeSafe because they know they will be hammered twice as hard if they do.”203

202 Mr Brian Casey, Chief Executive, PrimeSafe, Public Hearing, Melbourne, 20 November 2012. 203 Mr Nathan Wolter, Owner, Huon Distributors, Public Hearing, Wangaratta, 22 November 2012.

Chapter five: A local approach


5.8 Evidence was also heard from Mrs Jeanne Kelly, the Owner of Arrow Fisheries in Portland. Mrs Kelly told the Committee about a dispute she had had with PrimeSafe regarding the storing of fish on her premises. According to Mrs Kelly, instead of negotiating she was told that her business was at risk of being shut down if she did not comply with PrimeSafe’s orders “... and that can be fairly terrifying for an operator, because you do not know where to go”.204

5.9 Also in Portland the Committee heard complaints about PrimeSafe’s aggressive approach from Mr Lisle Elleway, Owner of Veteran Fishing. Mr Elleway’s use of the word ‘they’ is instructive in supporting the Committee’s earlier observation that small businesses may not make a distinction between auditors and regulators.

5.10 Mr Elleway said:

It is an adversarial approach. They are there for five minutes and if there is a slight dispute about the way some of the paperwork might be done, they point the finger at you and say, ‘I will shut you down within 24 hours if you don’t do exactly as I say’. I have had that said to me two or three times.

Mr TREZISE — So there is always that threat.

Mr ELLEWAY — Because they have not got time and I say, ‘Look, show me how to do it. What do you want to changed?’ – ‘No, it’s not my job to show you’. I do not think that is providing a service to anybody, to either the fisherman or the consumer.205

5.11 The Committee notes evidence received from Mr Casey and Dr Catherine Hollywell, Chief Executive Officer, Dairy Food Safety Victoria, stating that they expect businesses to be able to explain the actions they are going to take to be compliant with the regulation, as a way of proving their competency:

Mr DRUM — Do you help those smaller manufacturers – fledgling businesses – get their food safety plans in order? You call it a ‘food safety risk assessment program’. Do you help them all the way through that process, or do your more or less come in and say, ‘No. It is not up to standard’?

Dr HOLLYWELL — … you can go into a small business that is establishing and they could have a fantastic background. They can be highly competent; they can be very, very skilled. They may have run similar businesses elsewhere. You will have an interaction with them about what they need to put in place in terms of their HACCP plan, and they understand it and they get it immediately and it is a very smooth, streamlined process. You can have others who really

204 Ms Jeanne Kelly, Owner, Arrow Fisheries, Public Hearing, Portland, 20 September 2012. The dispute is also discussed in

the submission from Arrow Fisheries, Submission, Number 2, 2 August 2012. 205 Mr Lisle Elleway, Owner, Veteran Fishing, Public Hearing, Portland, 20 September 2012. See also: Veteran Fishing,

Submission, Number 4, 14 August 2012, p1.



struggle with the concept, struggle with recording, struggle with understanding how to keep records or data management or even track product. We would spend a great deal of time with those individuals, but we will not tell them how to do it because the competency of an individual in understanding the program they are building gives you confidence that they will be able to run it when they have built it. If we tell them how to do it and give them a template and say, ‘This is how you need to run your business’, invariably they will have difficulty in meeting those requirements when the business is up and running.206

5.12 However, other evidence received throughout this Inquiry suggests this expectation is not widely understood in the food industry in Victoria. The Committee believes that industry peak bodies and the regulators can make a greater effort to ensure all businesses understand this point.

5.13 Chapter 9 contains a full discussion on the education / advisory role played by PrimeSafe and Dairy Food Safety Victoria.

A ROLE FOR LOCAL GOVERNMENT

5.14 As stated above, the Committee has directed its focus in this Inquiry towards ways in which the current food safety framework, and indeed the state level legislation, may be improved in a way that removes the frustration felt by small businesses in Victoria.

5.15 Responsibility for monitoring retail butchers was passed from local government to the Victorian Meat Authority (PrimeSafe’s predecessor) in 1998.207 The Committee believes that this responsibility can be returned to local government.

5.16 The argument for returning small businesses to local government control is based on two reasons:

That small rural businesses are more comfortable dealing with their local councils than with regulators and audit agencies based in Melbourne

That local government is better placed to understand small rural and regional businesses.

5.17 Mr Marc Barnes, Manager Food Division at auditing firm NCS International told the Committee: “We are not really good at doing lots and lots of small individual entities, if you know what I mean. What we are very good at is working with large national or international companies ...”.208

206 Dr Catherine Hollywell, Chief Executive Officer, Dairy Food Safety Victoria, Public Hearing, Melbourne, 20 November

2012. 207 Victorian Meat Authority, Annual Report 1998–99, Victorian Meat Authority, Melbourne, 1999. 208 Mr Marc Barnes, Manager Food Division, NCS International, Public Hearing, Melbourne, 12 November 2012.



5.18 By way of contrast, Mr Adrian Holbrook, Coordinator Health Services at the City of Greater Geelong told the Committee that local government health inspectors are “... very local, they can get on to people ... ”.209

5.19 According to Mr Rob Spence, the Chief Executive Officer of the Municipal Association of Victoria, local government can tailor actions to match the small businesses that form part of their communities. He said that:

“... the council actually nuances its response relative to the way the local community operates and the more fine grained this stuff gets the better it is. We will always get outliers in it in terms of behaviours, but they know the community, they know the way people operate ...”.210

5.20 The Committee notes that, by definition, a ‘nuanced approach’ across Victoria’s 79 local government bodies could also be considered an example of inconsistency. As Mr Wolter said, environmental health officers “... can interpret the law in a completely different way to another bloke that came in last time”.211

5.21 This means that industry should appreciate that returning retail butchers to local government may not be a panacea for all of the sector’s ills – it is possible that small businesses will have reason to be dissatisfied with local government inspection.

5.22 Ms Rosemary Hancock, Policy Adviser at the Municipal Association of Victoria argued that any inconsistency would be a case of different approaches responding to different circumstances (echoing the discussion on inconsistency across the dairy industry across Australia in Chapter 2).

5.23 Referring to the way in which local councils are currently working with the Department of Health on improving their record keeping capacity, Ms Hancock said:

... the recent regulatory reforms relating to local government under the Food Act are in effect leading to greater consistency because there is a new classification system and a new electronic or central statewide classification tool through the Department of Health, and the businesses that councils register have to fit in with that terminology and classification and whatever. It has been an ongoing process. And that is leading to at least greater consistency of application of the regulations and whatever.

Also, through the close work with the Department of Health and councils there is a lot more collaboration. The officers involved attend statewide training and whatever. There has been certainly a trend towards growing consistency. That said, the whole reason you have local government involved is to enable local priorities to be taken into

209 Mr Adrian Holbrook, Coordinator Health Services, City of Greater Geelong, Public Hearing, Melbourne, 20 November

2012. See also: City of Greater Geelong, Submission, Number 49, 4 October 2012. 210 Mr Rob Spence, Chief Executive Officer, Municipal Association Victoria, Public Hearing, Melbourne, 20 November 2012. 211 Mr Nathan Wolter, above n 203. Also refer to the discussion about auditor inconsistency in Chapter 4.



account and different approaches. I know in terms of enforcement you will get a variety of enforcement at times, some more punitive than others, and you could argue in some of the locations that the punitive approach is quite the right approach. You might say that it does not work in a different part of the state, and I think we have already talked about some parts where sometimes a punitive approach is the most effective and councils rightly take that up, but then other councils rightly do not because it is not appropriate for their locality.212

5.24 Inconsistencies also exist in how different councils view cost recovery,213 with Mr Spence stating that not all councils implement full cost recovery regimes:

The costs are consistently inconsistent. They are all over the joint. Some councils would be recovering total cost and some might not be. It has been an issue that has been debated for some time as to what amount you should be charging and what the true cost is of delivering the service, so it is really quite variable.214

5.25 However, regarding the overall approach to food safety Mr Spence is confident that any inconsistency is “... operating within an acceptable band”.215

5.26 It is also argued that local councils would be able to monitor retail food businesses for a lower cost than PrimeSafe. Mr Ross Cairns, Senior Environmental Officer, Wangaratta Rural City Council, told the Committee that the Council’s annual charge for a butcher shop would currently be $244, including audits and sampling for testing.216

5.27 PrimeSafe’s current annual licence fee for retail butcher shops is $245. However, retail butchers are also audited every six months (every three months if they produce smallgoods), which can add several hundred dollars to their annual food safety costs.

CAPACITY

5.28 The evidence provided to the Committee suggests that local government in Victoria has the capacity and level of understanding of food safety regulation needed to accept responsibility for all retail food businesses.217

212 Ms Rosemary Hancock, Policy Officer, Municipal Association Victoria, Public Hearing, Melbourne, 20 November 2012.

Also see Ms Pauline Ireland, Assistant Director Food Safety and Regulation, Department of Health, Public Hearing, Melbourne, 12 November 2012 for a discussion on the Department of Health’s work with local government.

213 Councils are not permitted to profit from food safety registration fees. 214 Mr Rob Spence, above n 210. 215 Ibid. 216 Mr Ross Cairns, Senior Environmental Officer, Wangaratta Rural City Council, Public Hearing, Wangaratta, 22 November

2012. 217 Mr Rob Spence, above n 210; Mr Steve Sodomaco, Manager Health and Local Laws, City of Greater Geelong, Public

Hearing, Melbourne, 20 November 2012; Mr Adrian Holbrook, above n 209; Mr Ross Cairns, ibid; City of Greater Geelong, Submission, Number 49, 4 October 2012.



5.29 The vast majority of evidence the Committee heard during this discussion related to retail butchers, however the Committee believes the principles can be applied more widely to cover other retail food businesses.

5.30 Although the national food safety regulatory framework has changed substantially over the past decade it should be remembered that local councils in Victoria currently monitor supermarket butchers under an agreement with PrimeSafe. Mr Spence also argued that local councils have a good understanding of the way in which the food safety framework has evolved over recent years:

... we have gone from a model where the obligation to actually drive change occurred in the council going in and finding and challenging to a model where now the plan has to sit in the business and the test is whether in fact you are operating consistently with the plan.218

5.31 Mr Steve Sodomaco, Manager Health and Local Laws, City of Greater Geelong, told the Committee the local councils now employ a mixture of inspection regimes and auditing in line with modern approaches:

Previously, you were really only relying on what you observed on the day, whereas by now delving into that audit you are reassuring yourself that the systems are in place, that you can confidently come back in six months’ time and see pretty much the same thing. We have all moved that way.219

5.32 Ms Diahann Newell, Manager Community Health and Amenity, Wangaratta Rural City Council, provided the Committee with a hypothetical example of how a local council may approach an issue of non‐compliance:

Small problems can be fixed quickly, but say they need a new floor or something – it is about working with them to give them enough time to make it safe but realising that it might take them 12 months before they get to replace it. So having –

The CHAIR — So would you put a management plan in place until you got the new floor?

Ms NEWELL — We effectively do and that probably is because it is a large country town here. It is working with the people who are part of the community.220

5.33 The co‐operative, hands‐on approach of local councils to food safety regulation is in contrast to the approach taken by the regulators in Victoria, and in particular PrimeSafe. Small businesses in rural and regional Victoria who provided evidence to

218 Mr Rob Spence, above n 210. 219 Mr Steve Sodomaco, above n 217. 220 Ms Diahann Newell, Manager Community Health and Amenity, Wangaratta Rural City Council, Public Hearing,

Wangaratta, 22 November 2012.



the Committee spoke in support of this approach, which they believed suited their circumstances of operating in rural and regional towns and communities. It is worth noting that the more detached approach of the regulators is motivated, with good reason, by a need for small businesses to prove their competency in food safety practices. It may be that the Municipal Association of Victoria could put this issue on its agenda to discuss with local government environmental officers responsible for food safety should their remit be extended following the government response to this Report. Any discussion should of course acknowledge that local councils in Victoria currently do have responsibility for food safety compliance in supermarket meat sections and have carried out this role successfully.

5.34 Mr Cairns argued that in some cases local government would do a better job than PrimeSafe:

In 2007, one Saturday morning, we did some food sampling from all of the butcher shops in Wangaratta, for minced steak, to see if they were complying with the requirements for that. One of the butcher shops failed; we had about nine or ten butcher shops at that time. We submitted a certificate of analysis for that failure. We recently did some more sampling of all the butcher shops in Wangaratta, and two out of nine samples failed, once again. They were with meat substitution. We asked for samples of beef mince, and from them both samples contained lamb as well. That to me indicates that the butchers know that they can get away with somewhat of an alteration or some breaching of the regulations, and there is a fair chance they are not actually caught out. They are my concerns in relation to the, I guess, level of control by PrimeSafe in rural areas.221

5.35 When asked if he would prefer to be monitored by local government, Wangaratta butcher Mr Felix Gamze said: “Absolutely I would.”222

5.36 Mr Gamze added that it would make sense for the local environmental health officer to monitor his business because they already have responsibility for local supermarkets (including the meat section) and other small food businesses such as takeaway food shops.

5.37 Mr Wolter argued that public health would not be compromised if butchers were monitored by local government because of the low risk posed by meat that is cooked once it is purchased:

Everything that comes out of small butchers shops, particularly if they are not cooking … is part of an extremely low‐risk business. You are taking home the meat that they are producing. In a lot of cases it is a prime cut but even in the case where it is a sausage, you are taking it home and cooking it. You are taking that product over 60° Celsius and therefore you are killing any bugs that are in it. I do not

221 Mr Ross Cairns, above n 216. 222 Mr Felix Gamze, Owner, Felix’s Plaza Meats, Public Hearing, Wangaratta, 22 November 2012.



know of any recorded case – certainly within the last 20 years – of a food poisoning incident with food from a retail butcher’s shop.223

5.38 Mr Frank Herd of M C Herd agreed that butchers present a low risk to food safety, arguing that factors such as manufacturing smallgoods and poor food handling practices present a greater risk:

The risk in the meat industry and the food industry per se is really ready‐to‐eat product. If you have got raw product, then the risk is very, very minimal, and in our industry it is a butcher’s shop that might want to sell cooked meat as well as raw meat. That becomes an issue. The smallgoods industry certainly has a higher risk because you have fermented foods and cured products, which obviously increases the risk again. With cooked products you still have to make sure there is no cross‐contamination post the cooking, but with the actual raw product, whether it be fish, chicken or whatever kind of meat, the risk is almost non‐existent. The biggest risk you have in the handling of raw meat is cross‐contamination, probably in the kitchen.224

5.39 As Mr Herd points out there is a high risk involved in the production of smallgoods. According to the Australian Meat Industry Council in Victoria, out of 663 members 53 are meat processors, nine smallgoods manufacturers and 601 retailers. Currently PrimeSafe audits butchers producing smallgoods twice as often as butchers who do not.

5.40 Given this high risk the Committee believes that further discussion would need to take place between the state government and the Municipal Association of Victoria to determine local councils’ capacity in the area of smallgoods production.

5.41 The Committee notes Ms Ireland’s concern that local government may be lacking the qualified staff needed to oversee all food safety requirements:

Victoria is very fortunate in that we have a system where we have local government environmental health officers on the ground. We have had that system, largely, for 100 years, so we have a workforce out there in local government, but that is not enough in itself and they are not necessarily the right people with the right skills to do some of the high‐end business auditing. So there is an alternative, if you like, private workforce in third‐party auditors. So it is quite difficult.225

5.42 However, other evidence provided to the Committee was more reassuring. Mr Sodomaco said: “The skills are there. The people are trained; they are tertiary

223 Mr Nathan Wolter, above n 203. 224 Mr Frank Herd, Chairman, Australian Meat Industry Council, Public Hearing, Melbourne, 12 November 2012. 225 Ms Pauline Ireland, above n 212.



qualified. It is just a matter of refining those skills into this quality assurance environment ...”.226

5.43 Similar evidence supporting the skill levels of local government was provided by Mr Spence,227 with Mr Gamze adding a private sector perspective:

Our environmental health officers have obviously gone to university and are very up to date with all the food standards et cetera. I have never had any problem over the years dealing with environmental health officers, because you can actually speak to the person and discuss the issues. I still ask my local people questions that I would not bother ringing PrimeSafe about because I would not get an answer; I would only get some response as to paragraph 6, page such and such.228

5.44 Wangaratta Rural City Council confirmed that the extra responsibility could be handled within its current staffing levels:

Mr KATOS — Ross, you said the Wangaratta Rural City Council would certainly have the capabilities to be able to manage the butcher shops and fresh fish shops if they were given back to your control?

Mr CAIRNS — Yes, we would have the capacity to do that. We used to do that years ago.

Ms NEWELL — Within our existing staffing, we used to do it.

Mr CAIRNS — Yes, within existing staffing levels. I do not really see that as a problem for Wangaratta, nor would I see it as a problem for most other councils in rural Victoria.

Mr KATOS — So that would not adversely affect your budget, for example, with regard to environmental health?

Mr CAIRNS — No.229

5.45 It may also be the case that larger local councils could reach an agreement with smaller entities, to help them meet their food safety responsibilities if needed:

Mr KATOS — As a local example you might come around and say, ‘The Borough of Queenscliff is a very small council’ – and I know Geelong does work in other areas on the Borough of Queenscliff’s behalf – and you might say, ‘We’re a large council. We have the capacity. We’re happy to do the food premises on behalf of the Borough of Queenscliff’, and have an arrangement as such.

226 Mr Steve Sodomaco, above n 217. 227 Mr Rob Spence, above n 210. 228 Mr Felix Gamze, above n 222. 229 Mr Ross Cairns, above n 216; Ms Diahann Newell, above n 220.



Mr HOLBROOK — We have just actually come from 18 months of doing that very thing, and now they have their own environmental health officer just in the last few months.230

5.46 The Committee notes research from Kortt et al, arguing that many local councils across Australia engage in shared services arrangements that not only lead to cost‐savings but also foster regional development.231

5.47 An example of local government co‐operation in the food safety area to reduce the regulatory burden was presented to the Committee. The Committee learnt that mobile food premises are no longer required to register in each jurisdiction in which they operate. Instead they simply register with their own council with the information added to a statewide database recognised by all councils.

5.48 As Mr Spence said:

It really does strip back what was a very onerous regulatory model where you had to register multiple times. If you were doing farmers markets and were doing a whole lot of them, you were required to register in every location and potentially have different constraints around you depending on the interpretation of activities in a particular municipality.232

5.49 The Victorian Guide to Regulation states that:

… where the Victorian Government intends for local government to administer or enforce new primary legislation, or new or revised regulation, the relevant lead department should consult with local government on:

The resources required for the efficient administration and enforcement of the regulation

How those resources will be funded

The training and assistance which will be made available to local governments

How the performance of the local governments in the efficient administration and enforcement will be assessed

How the responsible state minister will account for local government performance

230 Mr Adrian Holbrook, above n 209. 231 Kortt M, Dollery B and Grant B, ‘Regional and local tensions: the role of shared services’, Public Policy, Vol 7, No 1, 2012. 232 Mr Rob Spence, above n 210.



An appropriate mechanism to publish the agreed resourcing, funding, training and performance monitoring arrangements.233

5.50 The Committee has recommended that responsibility for monitoring all food retail businesses be returned to local government.

RECOMMENDATION 4

That the Minister for Agriculture and Food Security consider transferring responsibility for registering and auditing all food retail businesses to local government, including butchers, fresh seafood and poultry retailers. This responsibility would also include registering all meat and seafood transport vehicles.

Further advice should be sought by government in relation to retail businesses that also process food, for example smallgoods.

NON‐COMPLIANCE ISSUES

5.51 The case of L E Giles and Sons in Gippsland is discussed in some detail in this section. The Committee decided to include this information and discussion because it is instructive with regard to the repercussions of non‐compliance for a small business.

5.52 L E Giles and Sons was an abattoir and wholesale and retail butcher in Gippsland, owned by Mr Ray Giles and Mr Colin Giles. Mr Ray Giles had been in the meat industry for around 60 years before its closure at the end of 2011. L E Giles and Sons slaughtered beef, sheep, pigs and goats.

5.53 In November 2011, an animal rights activist posing as a student took video footage of a pig kill at L E Giles and Sons and sent the footage to PrimeSafe. Mr Brendan Ryan, PrimeSafe’s Operations Manager, contacted L E Giles and Sons on the evening of Thursday 24 November 2011, asking them to attend PrimeSafe’s offices on Monday 28 November.234

5.54 On Friday 25 November 2011, Mr Ryan contacted L E Giles and Sons stating that they must attend PrimeSafe’s offices that day to address allegations relating to the lack of a ‘holding box’ for the pigs and the way in which pigs were being stunned and slaughtered.

5.55 In a statement to the Victorian Civil and Administrative Tribunal (VCAT), Mr Casey stated:

233 Department of Treasury and Finance, Victorian Guide to Regulation, [Edition 2.1], Victorian Government, Melbourne,

2011, p 68. 234 See: Community Support for L E Giles and Sons Inc , Submission, Number 33, 3 September 2012; Mr Morris Giles ,

Submission, Number 34, 3 September 2012; Ms Val Giles, Submission, Number 35, 3 September 2012; and Ms Debbie Di Sisto, Submission, Number 40, 10 September 2012.



Insofar as the Applicants’ licence was concerned, the footage depicted pigs being processed in breach of several applicable Australian Standards relating to the hygienic processing of meat. The breaches depicted in the footage were so fundamental and constituted such a significant departure from the required standard that I considered that the practices at the Applicants’ abattoir needed to be investigated immediately.235

5.56 The meeting on 25 November 2011 was attended by: Messrs Giles and Mr James Rodwell, Quality Assurance Manager at L E Giles and Sons; and Mr Ryan, Mr Casey and Ms Carly Savage, PrimeSafe’s Licensing Manager.

5.57 According to his statement, at the meeting Mr Casey said that once an investigation into L E Giles and Sons had been completed he planned to ‘… take action with a view to cancelling your licence’, by which he was referring to the show cause process mandated by s 22 (3) of the Meat Industry Act 1993.

5.58 Section 22 (3) of the Act states that before suspending or cancelling a licence PrimeSafe must:

(a) give written notice to the licensee of its intention and the reasons for it; and

(b) give the licensee a reasonable opportunity to make written submissions to it on the matter; and

(c) if the ground for suspension or cancellation in section 18 (d) [a major non‐conformance] applies to the licensee–

(d) state what the licensee has to do to comply with the prescribed minimum standard; and

(e) specify a period within which that minimum standard must be complied with; and

(f) be satisfied that the licensee has not complied with that standard within that specified period.

5.59 In his statement to VCAT, Mr Casey stated that he explained s 22 (3) of the Meat Industry Act 1993 to Mr Colin Giles and that Mr Colin Giles had understood the show cause process.

5.60 In her submission to this Inquiry, Ms Debbie Di Sisto states: ‘We were told to hand in our licence without mentioning we were acting on request from PrimeSafe … All the above directions were given verbally. No written notifications were ever received.’236

5.61 Several hours after the meeting ended an article appeared on the Herald Sun website titled, ‘Gippsland abattoir shut amid animal cruelty claims’. The article states:

235 Witness Statement of Brian Casey, Victorian Civil and Administrative Tribunal Administrative Division Occupational and

Business Regulation List, Between Colin Giles, Kathleen Giles, Raymond Giles, Valerie Giles (Applicants) and PrimeSafe (Respondent), 17 February 2012.

236 Ms Debbie Di Sisto, Submission, Number 40, 10 September 2012.



PrimeSafe chief executive Brian Casey told the Herald Sun it was his intention to close the abattoir permanently. “I am appalled by the treatment of animals shown in the video footage,” he said. “The issue will be vigorously pursued by PrimeSafe, ensuring that any inhumane treatment of animals is eradicated. I have advised the abattoir owners that it is my intention, immediately the investigation is concluded, to take action with a view to cancelling their PrimeSafe licence.”237

5.62 On Tuesday 29 November, Raymond Giles sent a fax to PrimeSafe stating: ‘Due to unforeseen circumstances and upon advice given to me by Brendan Ryan and Brian Casey I Raymond Giles feel I have no other choice than to surrender the above licence.’

5.63 In her submission, Ms Di Sisto states that Mr Ryan contacted Mr Giles saying that the ‘request to surrender’ was not acceptable and had to be resubmitted. In his statement to VCAT, Mr Casey stated that this was because in his opinion PrimeSafe had not provided any such advice. On the same day Raymond Giles sent another fax to PrimeSafe stating: ‘I Raymond Giles wish to surrender the above licence.’

5.64 The Giles family then received legal advice that they could pursue the matter with VCAT. The Committee heard conflicting evidence on what happened following this legal advice. The family told the Committee that they felt unable to take on a long legal battle, while Mr Casey stated that in his opinion the family was concerned about any adverse publicity that might have resulted from a VCAT hearing.

5.65 According to Ms Di Sisto, L E Giles and Sons had been audited four times each year by SGS Australia, with no major non‐compliance reported. Ms Di Sisto added that although other kills were regularly observed the last time a pig kill was observed was in November 2004:

Mr TREZISE — So why was it not audited for seven years?

Ms Di SISTO — They have had their audits quarterly for seven years, and in every single audit the beef and the sheep kills were observed, but I guess they never hung around after lunch to do the pig kill.

The CHAIR — But couldn’t they go and have a look at it, see if there is a box and inspect where you do them to see that the right equipment is there?

Ms Di SISTO — But they never actually viewed the process and that would be part of the audit. That is part of the work procedure, the process; there has to be auditing of the processes and procedures to make sure that you are operating in line with the guidelines and regulations. That would be part of the process of the audits. That is

237 See: www.news.com.au/national‐old/abbattoir‐shut‐amid‐animal‐cruelty‐claims/story‐e6frfkvr‐1226206429654.



their role – or that is my belief: that it is an auditor’s role to ensure that the procedures are correct.238

5.66 Ms Di Sisto added:

This business would still be here today if –

The CHAIR — If they had indicated to you that it needed to change.

Ms Di Sisto — That is right, the audits – and their behaviour. Things need to go into writing. They took complete advantage of the naivety of my grandfather and my uncle and were just heavy handed. My grandfather is old school. It has ruined him. This is a business – it has ripped his heart out.

Ms COWAN — And it was not a problem that could not be fixed.

Ms Di Sisto — That is right.

Ms COWAN — It was not a huge problem when you look at being able to actually identify it and fix it.239

5.67 The closure of L E Giles and Sons was highly disruptive to primary producers in the Gippsland region. The Committee heard from Ms Heather Osborn, sole operator of a 523 acre goat farm at Giffard, about this issue.

5.68 Ms Osborn, who had used L E Giles and Sons for slaughtering her goats, told the Committee that the closure of the Giles’ abattoir meant she had to take her animals to Melbourne for slaughter. This added 36 hours to the time it took from mustering to slaughter – increasing both her business costs as well as the stress placed on her animals:

The consequences? Funds lost in that time compared to the previous year – just on $60,000. There is a lot of stress involved when you do not know how you are going to pay your bills. Other smaller scale goat producers lost confidence and have left the industry. My plan to improve 50 acres of pasture? Cancelled, with a consequent loss of productivity. The seed company and contractors also lost the business. Planned work on my house? Cancelled. There was a loss of material sales to relevant businesses and builders as well. I need to update my ute and other farm equipment. That is an impossible scenario and, incidentally, I no longer deal with seven small businesses that I used to when I stopped in Trafalgar. Most importantly I could not afford the casual labour I would normally

238 Ms Debbie Di Sisto, above n 234. 239 Ms Debbie Di Sisto, above n 234 and Ms Bronwyn Cowan, Community Support for L E Giles & Sons, Public Hearing, Sale, 18 October 2012.



engage for the spring kidding. I worked exhausting hours in foul weather conditions this winter to keep my animals safe.240

5.69 Ms Osborn advised the Committee that her goats are now slaughtered at Radfords abattoir in Warragul after Radfords expanded its premises to include facilities for killing goats.

5.70 The Committee heard from Ms Bronwyn Cowan, owner of The Gypsy Pig and a representative of Community Support for L E Giles and Sons Inc. Ms Cowan was another witness who told the Committee about the increase to both her business costs as well as the stress placed on her animals caused by having to travel longer distances for slaughter:

The trip had to start at 4.30 in the morning to have the animals there at 6 o’clock. The animals had to be loaded the previous day for an early departure. The transport time was longer and they were in a ute which they would not normally have been in. We decided to go to a fortnightly kill, not a weekly kill, because we had to have sufficient carcasses to ensure that the abattoir would transport the meat to the butcher’s shop. They came only part way back and we then had to ask them to go a further distance, which they normally did not travel. The problem with that was that the carcasses had to hang for an extended time, which, with pork, is not ideal. We lost the trade of our small piglets. We used to kill little animals – eight kilos up to 15 kilos – but we could no longer do animals that small because they cannot hang for an extended period of time. We lost the emergency kill service, so if an animal had a health issue but was still able to be processed we no longer had that facility available to us. 241

5.71 Ms Cowan added an insight into the personal stress caused by the media coverage of the incident: ‘We were one of the few people who spoke up and said that we did not feel that due process had been followed. We had a backlash from the media presentation; we also had a backlash from customers.’242

5.72 Ms Rachel Needoba of Guendulain Farm in Yarragon provided similar evidence of the closure of L E Giles and Sons causing damage to a small farming business and more stress being placed on animals transported further for slaughter.243

5.73 Ms Di Sisto acknowledged that the filmed pig kill had been done incorrectly and that L E Giles and Sons had been willing to improve the way in which it slaughtered pigs.

5.74 Primary producers in the Gippsland region were also complimentary of L E Giles and Sons’ long commitment to good practice. Ms Osborn described the L E Giles and

240 Ms Heather Osborn, Owner, Merriman’s Creek Farm, Public Hearing, Sale, 18 October 2012. 241 Ms Bronwyn Cowan, above n 239. Ms Cowan also provided the Committee with case studies outlining how the closure

of L E Giles and Sons caused small farm businesses in the area to close. Similar evidence was provided by Guendalain Farm, Submission, Number 55, 6 December 2012.

242 Ibid. 243 Ms Rachel Needoba, Guendulain Farm, Submission, Number 55, 6 December 2012.



Sons facilities as “excellent”.244 The Committee also notes the letters of recommendation included in the submission from Ms Val Giles.245

5.75 Ms Di Sisto said that she was aware that other abattoirs with similar non‐compliance issues received advice from auditors on how to improve their practices.246 As well, the Committee heard complaints about the adversarial approach taken by PrimeSafe in its relationship with L E Giles and Sons.247

5.76 The Committee acknowledges PrimeSafe’s role in monitoring animal welfare issues in Victoria and the responsibility PrimeSafe has to maintain Victoria’s reputation in this sensitive area. The Committee also accepts that if an abattoir is mistreating animals it may be an indicator that other practices relating directly to food safety may also not meet minimum standards.

5.77 A number of concerns were expressed to the Committee regarding the closure of L E Giles and Sons:

Publicly announcing an intention to begin the process of cancelling L E Giles and Sons’ licence before the investigation was concluded

The fact that decisions were not put in writing – Mr Casey believes that he had explained the show cause process to Mr Colin Giles. However, considering s 22 (3) of the Meat Industry Act 1993 may be difficult for a member of the public without experience in legislation to understand, L E Giles and Sons may have been better advised to withhold any decision on forfeiting their licence until PrimeSafe had provided written notification

The apparent incomplete nature of audits carried out at L E Giles and Sons The apparent lack of consistency between the approach taken with L E Giles

and Sons and other abattoirs with similar non‐compliance issues The damage to small farming businesses reliant on small local abattoirs and

animal welfare caused by the closure of L E Giles and Sons.

5.78 In light of these concerns expressed to the Committee it is important that regulators not only have proper processes in place to deal with non‐compliance but that these are implemented in a transparent way.

EARNED RECOGNITION

5.79 Earned recognition is a risk‐based or outcomes‐based approach whereby regulators recognise high standards of compliance and reward businesses through, for example, less frequent audits. More detailed discussion can be found in Chapter 9 with a summary of the basic principles of earned recognition at 9.59.

5.80 The Committee was pleased to learn that local government in regional Victoria has a working understanding of earned recognition systems (also expressed to the

244 Ms Heather Osborn, above n 240. 245 Ms Val Giles, above n 234. 246 Ms Debbie Di Sisto, as above n 234. 247 Ms Heather Osborn, above n 240; Ms Bronwyn Cowan, above n 241; Community Support for L E Giles and Sons Inc,

above n 234; Mr Morris Giles, above n 234; Ms Val Giles, above n 234.



Committee as ‘performance‐based systems’). Mr Holbrook explained to the Committee that the City of Greater Geelong already uses such a system with its current food safety responsibilities, as a way of reducing the financial burden faced by food businesses:

So our way of keeping the fees down for the various business proprietors is to have a rating system and there is a breach table assessment sheet and that works out where they rate ... It is our way of recognising that the good operators should be paying a minimal fee and those that we have to go back to regularly have to pay more.248

5.81 Mr Holbrook added that earned recognition can also be used by local government as a way of motivating small businesses to improve their practices, again taking advantage of local knowledge:

Obviously we are trying to move people out of the lower rating categories into the higher rating categories. Some old premises you will never get to be the very best of everything because you are dealing with an old premises. But you have to understand that if you get the right operator in an old premises they can quite often do a better job than someone who has come into a brand‐new premises who has no idea about food handling.249

5.82 For local councils, the desired outcome remains improved food safety. Mr Holbrook said:

Our process is to try to educate people to do the right thing and work with the proprietor and to get them to take ownership of their responsibilities and that approach works quite well. We have some cases where that does not and where we have to start upping the ante, I suppose, in enforcement requirements.250

NEW ZEALAND

5.83 The Committee spoke with Ms Kathryn Lockyer from JAS‐ANZ about her experience as an auditor working in New Zealand. She told the Committee that food safety regulation in New Zealand operates on a two tier basis:

Small businesses in low risk environments tend to favour food control plans based on a standard template and audited by territorial authorities’ (local government) environmental protection officers

Large businesses operating in more high risk environments usually prefer food safety programs monitored by the federal government.

248 Mr Adrian Holbrook, above n 209. 249 Ibid. 250 Ibid.



5.84 Ms Lockyer said:

New Zealand has recognised that there are various levels of organisations. You have the Fonterras of the world with this great big mammoth infrastructure, and then you have the mum‐and‐dad corner dairies and that sort of thing. They have tried to recognise that full thing, and also by risk. What currently operates is that you have food safety programs. The larger organisations tend to go for the food safety programs, and the smaller ones go for food control plans. If you look at the website of the Ministry for Primary Industries, you will see that they have generated a number of generic food control plans, and what they have done is look at particular business groupings and said that these are the common things you need to have in place. Therefore if you take this food control plan and implement it in your business, then you should generally comply.

They have actually approved a number of environmental health officers from the territorial authorities who are now approved to go in and do those food control plan audits. It has actually taken away some of the costs of setting up some of these food safety programs, which can be quite involved and very large, but it has also given the people enough information about what is critical around hazard analysis within the food sector.251

5.85 Ms Lockyer added that local government in New Zealand is currently focused on improving its knowledge of HACCP‐based systems.

251Ms Kathryn Lockyer, Accreditation Manager Services Domestic, JAS‐ANZ, Public Hearing, Melbourne, 20 October 2012.


Seafood

KEY MESSAGES

Some members of the seafood industry believe they were not fully consulted about changes to food safety regulation in 2003. Remnants of this dissatisfaction remain today.

Seafood processors believe fees should be based on the amount processed rather than throughput.

Live seafood presents a very low risk to food safety.

Unnecessarily regulating a low‐risk sector creates animosity between industry and regulators.

Yabbies present a very low risk to food safety.

Aquaculture fees do not reflect the small size of the industry in Victoria.

6.1 This chapter deals with various issues that have arisen in the seafood industry with regard to the food safety framework in place and the role of the regulator. The Committee is not in a position to provide scientific views or advice but can provide a perspective on how it believes the industry and regulator should approach the common goal of providing safe food to the community.

HISTORY

“We can agree that consultation can be challenging.” Mr Brian Casey, Melbourne

6.2 The seafood industry was brought under the Seafood Safety Act 2003 as enforced by PrimeSafe (still known as the Victorian Meat Authority at the time) in 2003. Prior to this retail and seafood processing businesses were regulated for food safety



purposes under the Food Act 1984 with local councils responsible for enforcement. The wildcatch and aquaculture sectors were not regulated for food safety purposes.252

6.3 The decision to regulate the seafood industry came about through discussions the Department of Primary Industries held with three industry peak bodies: Seafood Industry Victoria; the Victorian Aquaculture Council (no longer in existence); and Seafood Services Victoria. The Victorian Competition and Efficiency Commission states that there was support for regulating the whole of the supply chain and handing responsibility to the Victorian Meat Authority because ‘... it was not feasible for local councils to manage food safety regulation on boats and it was not cost‐effective to establish a new statutory body’.253

6.4 Following these discussions a Seafood Safety Management Working Group was established comprised of: representatives from the seafood industry; seafood businesses; two peak bodies (Seafood Industry Victoria and the Victorian Aquaculture Council); and government departments and agencies. The Working Group relied on the two peak bodies to represent the views of their members and update their members about the impending regulation.254

6.5 Although there was consultation with the seafood industry a portion of the industry did not believe that it had been either properly consulted or its opinions heeded. The Victorian Competition and Efficiency Commission reports that the Department of Primary Industries was aware of this concern at the time and wrote to all businesses licensed under Fisheries Victoria to inform them of the work being undertaken by the Seafood Safety Management Working Group, ‘... however this happened at the end of the review process’.255

6.6 ‘Effective communication of regulations’ is a key principle of the Victorian Guide to Regulation.256

6.7 Thus, a portion of the seafood industry in Victoria was dissatisfied with the 2003 process regulating seafood for food safety. Throughout this Inquiry, the Committee observed that, at least in part, this dissatisfaction still exists and from an observer’s perspective appears to drive much of the criticism some in the seafood industry have of PrimeSafe and the food safety regulation framework.

6.8 For example, in its submission to this Inquiry, abalone divers Thirteenth Mount Cope Pty Ltd were critical of what they perceived as the industry being ‘bullied’ into being regulated by PrimeSafe, as well as focussing on the personal motivations of individuals within the regulator.257

252 Victorian Competition and Efficiency Commission, Regulation and Regional Victoria: Challenges and opportunities,

Victorian Competition and Efficiency Commission, Melbourne, 2005. 253 Ibid, p 260. 254 Ibid. 255 Ibid, p 261. 256 Department of Treasury and Finance, Victorian Guide to Regulation, [Edition 2.1], Victorian Government, Melbourne,

2011, p 29. 257 Thirteenth Mount Cope, Submission, Number 10, 27 August 2012.

Chapter six: Seafood


6.9 In Sale, Ms Mary Aldred from the Committee for Gippsland, a peak industry organisation in the region, told the Committee that there was “quite some dissatisfaction” among seafood businesses in Gippsland with the food safety regulations.258

6.10 The Committee also notes that at the time the Seafood Safety Act 2003 was introduced the Victorian Government had yet to require business impact assessments to be carried out on legislation that has an ‘appreciable impact on competition or business’.259

6.11 The Committee is mindful of the reality that legislation can never appease every member of the community. However, it agrees with the Victorian Competition and Efficiency Commission’s finding that had a business impact assessment been carried out in 2003 it may have led to a more agreeable outcome across the whole of the seafood industry.

6.12 The Committee also accepts the view that the seafood industry must share responsibility with government for ensuring its members are aware of any changes to legislation.

6.13 The Committee believes that the recent history of food safety regulation and the Victoria seafood industry underlines the more general point made throughout this Report: that legislation should only be introduced when the benefits outweigh the cost.

FEES

6.14 During this Inquiry the Committee heard evidence from the seafood industry regarding both the fee structure and level of fees payable to PrimeSafe. A brief discussion of this evidence is included here, however it does not directly relate to the main considerations of this Inquiry. The Committee believes that there may be merit in further consideration of these issues by government.

6.15 Mr Brian Casey told the Committee that the current licence categories are those recommended in 2003 by Seafood Industry Victoria as part of the consultation process and that the revenue collected by PrimeSafe was approved by the then Victorian Government:

We engaged PricewaterhouseCoopers to devise a pricing structure that would deliver the revenue stream for us that was necessary to manage the seafood industry; that was all done at the time. As you would appreciate, if you are going to go through this process in a legislative framework what we needed to do was to ensure that we met the requirements for consultation and that was signed off by the Victorian Government solicitor at the time.260

258 Ms Mary Aldred, Executive Director, Committee for Gippsland, Public Hearing, Sale, 18 October 2012. 259 Victorian Competition and Efficiency Commission, above n 252, 263. 260 Mr Brian Casey, Chief Executive, PrimeSafe, Public Hearing, Melbourne, 20 November 2012.



6.16 The fees were reviewed one year after they were introduced resulting in a reduction in the fees paid by the wildcatch and aquaculture sectors.261

6.17 However, the Committee heard that fees may not fairly reflect activities carried out by businesses. One area of contention is that the fees for retail seafood businesses ($567 per year) are higher than those paid by retail butchers ($245 per year).

6.18 Mr Casey explained that this difference is not a result of a risk‐based approach to fee setting. Rather it is a combination of historical factors and cross‐subsidies in the meat and poultry industries:

Mr KATOS — Why are seafood retailers paying higher fees than meat retailers? Is that purely on a risk basis or is there another reason?

Mr CASEY — No, it is primarily historical. It relates to a government direction at the time that retail butchers came on – not relating to seafood ... The government provided a direction at the time that the introduction of retail butchers to the PrimeSafe system of management was not to cost more than $200, so that was a government decision at that time.

Mr KATOS — There was no such direction given for seafood?

Mr CASEY — No. I will come to your point – I understand the question – that fees for retail butchers are clearly subsidised by the remainder of the meat and poultry industry and the meat and poultry industry are more than prepared to subsidise those fees for retail butchers ... The initial licence fee for retail business, as I said, was set at $175, and that fee has simply been increased in line with government charges since that time.262

6.19 Mr Casey added that the overall costs for the two sectors are roughly the same because retail butchers are audited more frequently:

I have explained why the fee for retail seafood is higher than it is for retail meat, but retail meat is subject to two audits a year because of the assessment of risk involved in the production process. Retail seafood is subject to one audit a year. When you add up the cost of complying with PrimeSafe requirements, whether it be auditing or licence fees, the fees are about the same.263

6.20 Another area of contention raised by witnesses was that the cost of meeting food safety requirements for the seafood industry is higher in Victoria than in other states. Comparing costs across states is difficult because:

261 Ibid. 262 Ibid. 263 Ibid. Audit costs depend on the size and complexity of the business as well as how many reports need to be produced

e.g. if a business is supplying three supermarkets, its audit report costs would be higher than a business supplying one supermarket. See Chapter 4 for a further explanation of the auditing process.



Industry size varies in different states The different approach to risk and cost structures taken by the states (as

discussed at 6.25 by Mr Casey) The time taken for audits may vary Different species are caught in the different waters around Australia.

6.21 In 2009, the Productivity Commission selected a group of regulatory requirements to compare across the states. It found:

All jurisdictions, except Queensland, require shellfish operators to be licensed for food safety purposes. For seafood other than shellfish only New Zealand, New South Wales and Victoria require operators to be licensed for food safety purposes

All bivalve mollusc (such as mussels, cockles, oysters, pipi and scallops) businesses are required to have a food safety program, but only Victoria and New South Wales require other seafood harvesters and processors to have a food safety program

Licences are generally determined by where businesses operate on the production chain. Differences vary across states according to other determinants; for example, New South Wales and South Australia take business size into account. In Victoria, fees vary according to annual throughput

Annual licence fees for shellfish producers / processors are highest in Victoria According to the requirements checked by the Productivity Commission, the

regulatory burden falls equally on most states For shellfish producers / processors the annual cost of meeting both licensing

and compliance audit requirements is highest in Victoria (due mostly to licence charges) and New South Wales.264

264 Productivity Commission, Performance Benchmarking of Australian and New Zealand Business Regulation: Food safety,

Commonwealth of Australia, Canberra, 2009.



6.22 In its submission to this Inquiry, the Lakes Entrance Fishermen’s Co‐operative compared food safety regulation costs in New South Wales, Victoria and South Australia:

Table 3: Seafood food regulation cost comparison265

NSW Victoria SA Boat $308 Regardless of

tonnage $733 ‐ Nil

Co‐op $851 6–50 staff $7,547 Category B Nil Truck $308 ‐ $105 ‐ Nil Market $851 6–50 staff $7,547 ‐ Nil Processors $851 6–50 staff $7,547 Category B Nil Retail Nil ‐ $567 ‐ Nil Supply chain cost

$3,169 ‐ $24,046 ‐ Pay for council

inspections

6.23 Another cost comparison was provided by Seafood Industry Victoria in its submission:

265 Source: Lakes Entrance Fishermens Co‐Operative, Submission, Number 3, 10 August 2012, p 2.



Table 4: States with a seafood safety scheme and associated costs compared with Victoria266

SA NSW1 Tasmania Victoria Wildcatch Nil2 $308 Nil <10 tonnes:

$123 application fee $245 annual fee

10–50 tonnes: $218 application fee $435 annual fee

>50 tonnes: $367 application fee $733 annual fee

Processing Nil 0–5 food handlers: $414 x no. premises

Nil Depending on seafood processed and tonnage. $378–3,774 application fee $755–7,547 annual fee

6–50 food handlers: $851 x no. premises >51 food handlers: $3,727 x no. premises

Retail Nil 0–5 food handlers: $414 x no. premises

Nil $284 application fee $567 annual fee 6–50 food handlers: $851

x no. premises >51 food handlers: $3,727 x no. premises

Transport Nil $308 per boat$308 per vehicle

Nil $105

Aquaculture $193 plus activity‐based fees3

‐ TSQAP4

Nil

Depending on seafood harvested and tonnage $123–367 application fee $245–733 annual fee

1. All businesses that process, pack, store and transport seafood, seafood wholesalers, fishing vessels that handle seafood after catch, and aquaculture businesses for oysters, fish and crustacea are required to hold an Authority licence to operate. All other NSW food businesses are required to notify the NSW Food Authority of their business details.

2. A primary food producer is required to produce safe and suitable (as defined by the Food Act 2001) food and conform to the requirements of the Food Standards Code including the Seafood Standard 4.2.1.

3. Primary Produce (Food Safety Schemes) (Seafood) Regulations 2006 established the Seafood Scheme and requires the holder of an aquaculture or fishery licence authorising the farming or taking of bivalve molluscs for human consumption to be accredited. An accredited producer must have an approved food safety arrangement.

4. Tasmania has adopted an internationally accepted program for the reduction of food safety risks of shellfish consumption. This program has been successfully carried out by the Tasmanian Shellfish Quality Assurance Program (TSQAP) since the mid‐1980s. TSQAP implements the Australian Shellfish Quality Assurance Program.

266 Source: Seafood Industry Victoria, Submission, Number 26, 3 September 2012, p 5.



6.24 The Committee raised the issue of fee discrepancies between states with Mr Casey. He told the Committee that fees being lower in other states can be ascribed to:

Other states not operating a full cost‐recovery model Other states not regulating the whole of supply chain as in Victoria; that is, a

result of the inconsistent application of the national regulations.267

6.25 Mr Casey said:

I think the question to ask is, ‘Do all states regulate all aspects of the seafood industry?’, and they do not. And all the states do not operate on a cost‐recovery model. All of the costs of the operation at PrimeSafe are borne by the PrimeSafe licensee. There is no subsidy whatsoever from government and it is clearly transparent; that is clearly what is included in our annual report.

In terms of this issue though, which is about regulating all aspects of the seafood industry, I go back to my earlier comment, which is where you are talking about areas of low risk, do all states require that all aspects of the seafood industry, for example, are subject to direct regulatory intervention and the answer to that question is they do not.

The CHAIR — So you are saying that we have regulation within the fishing industry in Victoria that we do not have in other states because there is not the risk? Other states deem that there is not the risk?

Mr DRUM — That governments have deemed.

Mr CASEY — I think that comment is correct. It is up to the government to decide does it want to impose on the industry a direct regulatory burden and some states have decided not to do that. I think that is very true.268

6.26 The Victorian Guide to Regulation states: ‘Where fees and charges are imposed, these should generally be set on a full‐cost recovery basis.’269

6.27 The Committee spoke with several members of the seafood industry in South Australia, who expressed the view that Victoria has a reputation for being more stringent with its food safety requirements without a corresponding reputation for higher quality or safer seafood.270

6.28 Industry can also, and does, lobby government to change legislation in Victoria so that it is consistent with practices adopted by other states.

267 The Committee is aware that this is a commonly held view across regulators and government departments in Victoria. 268 Mr Brian Casey, above n 260. 269 Department of Treasury and Finance, above n 256, 20. 270 Mr Mario Del Medico, Manager, International Oyster and Seafoods, Consultation, South Australia, 1 November 2012;

Mr Andrew Ferguson, Owner, Ferguson Fisheries, Consultation, Adelaide, South Australia, 1 November 2012.



6.29 The Committee has heard that this issue of inconsistency of approach by the states is being reviewed by FSANZ in 2013.

SEAFOOD PROCESSORS

6.30 The Committee heard criticism that PrimeSafe’s fee structure for seafood processors is based on throughput rather than the amount actually processed. In its submission to this Inquiry, the Lakes Entrance Fishermen’s Co‐operative says that its annual fee of $7,547 is based on its total throughput of 4,000 tonnes of product landed rather than the 110 tonnes of product it processes.

6.31 The Lakes Entrance Fishermen’s Co‐operative states that it has been disputing the fee level with PrimeSafe: ‘For a meat facility to incur the same level of costs as a Fish Co‐op they must be an abattoir processing in excess of 80,000 head of cattle a year, is this cost comparison fair? Does it represent risk? What is the justification?’271

6.32 Mr Casey told the Committee that the reason the Lakes Entrance Fishermen’s Co‐operative’s fee is determined by its throughput rather than the amount processed is because PrimeSafe is unable to accurately assess the amount processed:

In the event that you are processing, if you do process, then we do not as part of our fee schedule separate out how much processing you do and how much wholesaling you do, because the simple question is: how could we possibly know that? How could we sensibly manage and audit that? How could we responsibly apply that across the industry?272

6.33 However, the Committee believes that PrimeSafe should be able to assess the amount of seafood processed based on the Lakes Entrance Fishermen’s Co‐operative’s records. The Co‐operative showed the Committee an FDB (Fish Data Base) Report that includes all fish landed and processed for the Financial Year 2011/2012.273 The Committee understands that PrimeSafe has also viewed this document.274

6.34 On its ‘Fees and charges’ page for Seafood Processors the PrimeSafe website states: ‘Throughput is defined as the weight of seafood product brought into the facility for processing.’275

6.35 Mr Casey added the warning that PrimeSafe’s fee structure is designed such that the burden is spread across the whole seafood industry, including cross‐subsidies. He stated that a fee reduction for one business would result in an increase for others:

271 Lakes Entrance Fishermens Co‐Operative, above n 265. The submission contains correspondence with PrimeSafe

regarding the fee dispute. 272 Mr Brian Casey, above n 260. 273 Personal Communication, Mr Dale Sumner, General Manager, Lakes Entrance Fishermen’s Co‐operative and Leftrade

Limited, 28 November 2012. 274 Ibid. 275 See: www.primesafe.vic.gov.au.



Put simply, as a regulatory authority we know the amount of funding that we need to receive from the seafood industry ... The question is premised – and I understand you have not put it, but it has been put to the Committee – on the basis that, ‘We should pay less’. We just need to understand that if you pay less, someone else will pay more ... The fee structure, as I explained, is complex. Put simply, what is behind it is that if one party is paying too much, or thinks that they are, then that cost would be placed upon someone else.276

6.36 These comments raise concerns for the Committee about the PrimeSafe fee structure which it believes should be more transparent to industry.

6.37 The Committee wishes to recommend that processing fees be reduced but does not desire an outcome where other fees are increased. Clarification from PrimeSafe to the Victorian Government is necessary, as is an opportunity for industry involvement in changes.

RECOMMENDATION 5

That PrimeSafe base its seafood processing fees on the amount of seafood processed, in accordance with its own definition of ‘throughput’ as the weight of seafood product brought into the facility for processing.

VALUE FOR MONEY

“It is our ticket to trade.” Ms Jocelyn Bevin, Terang

6.38 A common theme running through evidence provided to this Inquiry by the seafood industry was that fees paid do not represent ‘value for money’.

6.39 For example, Ms Renee Vajtauer, Executive Director, Seafood Industry Victoria told the Committee: “What I have been hearing from industry is that they pay fees to PrimeSafe to administer food safety regimes but they do not see a lot of service out of that.”277

6.40 In its submission to this Inquiry, Apollo Bay Fisherman’s Co‐operative, which exports much of its product and is audited by the Department of Agriculture, Fisheries and Forestry but also pays an annual fee of $1,406 to PrimeSafe, states: ‘PrimeSafe does not offer any value to our output and so is just a cost burden.’278

6.41 The Committee has recommended that businesses audited by DAFF Biosecurity on behalf of PrimeSafe should only pay a nominal fee to PrimeSafe.

276 Mr Brian Casey, above n 260. 277 Ms Renee Vajtauer, Executive Director, Seafood Industry Victoria, Public Hearing, Melbourne, 12 November 2012. 278 Apollo Bay Fisherman’s Co‐operative, Submission, Number 20, 31 August 2012, p 2.



RECOMMENDATION 6

That the Minister for Agriculture and Food Security work with PrimeSafe to replace current requirements for full registration with PrimeSafe with a nominal fee, for businesses audited by DAFF Biosecurity, including when these businesses sell product in Victoria.

6.42 Nautilus Seafoods states: ‘The impact of PrimeSafe is made worse by the complete lack of value for money ...’. It also argues that the fees are ‘... a significant and unnecessary burden …’. 279

6.43 And in its submission to this Inquiry, the Lakes Entrance Fishermen’s Co‐operative describes the fees as a ‘service provision’.280

6.44 These quotes above display the way in which the issues of fees can be blurred by the two different arguments: that the fees offer no value for money; and that the fees related to wildcatch are not necessary because the regulation itself is not necessary.

6.45 This raises a question inherent to any discussion on the cost of food safety regulation: should businesses receive a service from the regulators for their fees, as suggested by Ms Vajtauer above; or should fees be viewed as a contribution to the food safety system with all the benefits it confers to industry (reputation) and the public (safe food)?

6.46 The Committee takes the view that an industry should only fall under the remit of a regulator should the level of risk demand it. As Ms Vajtauer asked regarding the wildcatch sector: “... they are relatively low risk so why would they be included under PrimeSafe?”281

6.47 Evidence received by the Committee, in particular from abalone businesses, suggests that the wildcatch sector presents a very low risk to food safety.282

6.48 For example, Mr Chris Daniels, a professional fisherman from East Gippsland, states: ‘Our product is live – there is marginal, if any, food safety risk for humans.’283

279 Nautilus Seafoods, Submission, Number 5, 19 August 2012, p 1. Similar evidence was provided by: Mr Geoff Ellis,

Chairman, Lakes Entrance Fishermens Co‐Operative, Public Hearing, Bairnsdale, 17 October 2012; Lakes Entrance Fisherman’s Co‐operative, above n 265; Eastern Zone Abalone Industry Association, Submission, Number 9, 24 August 2012; Mr John O’Neill, Submission, Number 8, 24 August 2012; Thirteenth Mount Cope, above n 257; Hayes Seafood, Submission, Number 11, 29 August 2012; Victorian Abalone Divers Association, Submission, Number 12, 29 August 2012; Abalone Industry Committee, Submission, Number 16, 31 August 2012; Victorian Abalone Processors’ Association, Submission, Number 24, 3 September 2012; Mr Chris Daniels, Submission, Number 31, 3 September 2012; Western Abalone Divers Association, Submission, Number 32, 3 September 2012; Australian Sea Fisheries Group, Submission, Number 17, 31 September 2012; Lonimar Australia, Submission, Number 18, 31 August 2012; Tasmanian Seafoods, Submission, Number 22, 3 September 2012; Seafood Industry Victoria, Submission, Number 26, 3 September 2012; Fishermen Direct Pty Ltd, Submission, Number 47, 3 October 2012.

280 Lakes Entrance Fishermens Co‐Operative, ibid 8. Also see Eastern Zone Abalone Industry Association, ibid. 281 Seafood Industry Victoria, above n 277. 282 Veteran Fishing, Submission, Number 4, 14 August 2012; Nautilus Seafoods, above n 279; Eastern Zone Abalone

Industry, above n 279; Mr John O’Neill, above n 279; Thirteenth Mount Cope, above n 257; Hayes Seafood, above n 279; Victorian Abalone Divers Association, above n 279; Abalone Industry Committee, above n 279; Victorian Abalone Processors’ Association, above n 279; Western Abalone Divers Association, above n 279; Seafood Industry Victoria, above n 277.

283 Mr Chris Daniels, Submission, Number 31, 3 September 2012.



6.49 In its submission to this Inquiry, Southern Rocklobster Limited argues that regulation of rocklobster is not required because:

It is a low risk product It is caught live The industry self‐regulates via good handling practices.284

6.50 Regarding abalone, Nautilus Seafoods Pty Ltd states that this sector’s self‐regulation is also effective: ‘The handling of abalone on board the fishing vessel is controlled by an Industry Harvesting Code of Practice and Supply Agreements with licensed receivers.’285

6.51 In Portland, Mr Gary Kenyon, General Manager, Sou’west Seafoods, provided further evidence to the Committee that placing the low‐risk abalone sector under the control of PrimeSafe is a cause of animosity in the sector:

Our divers, to put it mildly, think it is an absolute waste of time ... the only product they have on board is live abalone. They have been targeted by PrimeSafe to be registered. They tick all the boxes every day doing their inspections on their boat. I spoke to one diver who found I was coming down to the committee and he has been audited once in seven years by PrimeSafe. They think it is just a grab for money and abalone being a high‐priced commodity they will be able to pay it.286

6.52 Mr Ellis was another witness to argue that the audits associated with the abalone sector achieve little food safety benefits and that the fees are a source of friction in the sector:

[Abalone divers] pay $733 a year. They very rarely get audited, if at all. Recent history would suggest that when the auditors do come up there, which is very infrequent, the diver will take a day off work, the auditor will come along and want to inspect the books. They do not want to inspect the boats. It is a matter of five minutes to look at the material. What we would be suggesting is: if that is what they want to look at, why can we not send that material in? There is clearly an inequity in $733.287

6.53 In its submission to this Inquiry, Nautilus Seafoods Pty Ltd provides a first‐hand view of audits on an abalone boat:

For my $733 I receive one visit from a PrimeSafe inspector. The inspector does not bother to look at the vessel because PrimeSafe acknowledges the negligible risk associated with abalone vessels and the fact that the vessel, equipment and operating procedures have

284 Southern Rocklobster Ltd, Submission, Number 30, 3 September 2012. 285 Nautilus Seafoods, above n 279. 286 Mr Gary Kenyon, General Manager, Sou’west Seafoods, Public Hearing, Portland, 20 September 2012. 287 Mr Geoff Ellis, above n 279.



not changed from the year before. The inspector asks to see my food safety manual and spends five minutes checking to see if I have ticked the boxes on the daily check list and that’s it $733 please! PrimeSafe already have an electronic copy of my food safety plan on file as they requested. Surely I can submit an update of the plan by email, once per year at a fraction of the cost.288

6.54 In Portland, Mr Elleway told the Committee that audits achieve little because boat owners are able to update any necessary records prior to PrimeSafe attending. According to Mr Elleway, responsibility for monitoring the wildcatch sector should be returned to local councils. Mr Elleway said:

... what PrimeSafe do is ring up and say, ‘We’re going to come and audit you’, so the fisherman panics.

Mr TREZISE — He gets it all in order.

Mr ELLEWAY — He runs around and enlists everybody he can to tick the boxes and put the dates in so that he has got it all ready when the PrimeSafe inspector arrives.

Mr HOWARD — He has got some paperwork to show.

Mr ELLEWAY — And that is not a food safety program or regime; it is nothing. As we had before, it is nothing. So we are actually paying for nothing and we’re worrying about nothing. In my opinion we probably should go back to what we had before the Seafood Safety Act and just have nothing, because there is no evidence to support the fact that we need to be audited or need to be inspected, other than by the local council inspector. They are the people who are much better placed, because they get around the traps, and if there is a boat which is really doing the wrong thing, the local council inspector will hear about it and he will march down there and say, ‘Christ, you’ve got a boatful of cockroaches’ or something, you know, and sort it out. Whereas this way there is nothing.

The CHAIR — So you are saying that there is not a need for PrimeSafe in the fishing industry and that when it comes to boats it is better to just have the local health inspector from local government, as it was prior to 2003?

Mr ELLEWAY — Yes, I am saying that. Yes, because there is no evidence – there is no spate of poisonings from fishing boats – to support the fact that we need a sort of increased regime. But there is

288 Nautilus Seafoods, above n 279, 2.



evidence, I reckon, to support the fact that the market will control the quality of the product you are sending.289

6.55 Mr Casey told the Committee that PrimeSafe does not charge for audits of boats. He also explained that the reason for audits being conducted on a random basis, where only a selection are audited, is that the nature of the seafood industry makes it inherently difficult to audit on a regular basis.

6.56 Mr Casey said:

The audits are basically endpoint inspections and they are undertaken by PrimeSafe. It is just not possible commercially for a commercial auditor to conduct an audit of a seafood vessel. Clearly you would understand better than me the problem that when the conditions are right I need to be out there harvesting fish; when they are not right, I am sitting in port. You cannot possibly set up a commercial audit based on those sorts of arrangements. What PrimeSafe does is it samples a number in the fleet.290

6.57 The seafood industry, then, is arguing strongly that the wildcatch sector is a low‐risk activity that does not need to be regulated for food safety purposes. Ms Vajtauer suggested that risk begins at the processing stage: “You would probably start to regulate once the product has been value‐added or processed, so filleting or changing that raw product into something else. That is when you would probably start doing food safety.”291

6.58 Mr Casey agreed with the assertion that wildcatch is a low‐risk activity:

I do think that there are businesses in this low‐risk arena where there should be a very critical analysis of whether you impose direct regulatory intervention, because as I said before, there is a burden, there is the cost of this regulation, and it is unavoidable that any regulatory burden, whether it be a government burden or a burden imposed for commercial reasons, is always sheeted home to the producer ... If the government decided – to use an illustration – that wildcatch harvest is low risk and that risk does not warrant direct regulatory intervention, PrimeSafe would agree with the government that it is clearly low risk.292

6.59 The Committee understands the animosity caused when an industry feels it is regulated unnecessarily and that any financial imposition harms a sector’s

289 Mr Lisle Elleway, Owner, Veteran Fishing, Public Hearing, Portland, 20 September 2012. 290 Mr Brian Casey, above n 260. 291 Ms Renee Vajtauer, above n 280. 292 Mr Brian Casey, above n 260.



competitiveness. The Committee heard several examples from the seafood industry of ill feeling between businesses and PrimeSafe.293

6.60 For example, in its submission to this Inquiry, East Gippsland Estuarine Fisherman’s Association states: ‘PrimeSafe will not reply to correspondence and are rude and aggressive should you ring their office.’294

6.61 However, the Committee believes that in the case of wildcatch fishing directing animosity regarding legislation towards PrimeSafe is misplaced. As Mr Casey made clear to the Committee, he believes that if the Victorian Government does not believe a sector needs to be regulated then it should remove that sector from the legislation. PrimeSafe should also understand that it is part of the regulators’ obligation, as discussed in Section 2.71, to be proactive in its relationship with government, and that this can occur in the context of a healthy, impartial regulatory regime.

6.62 The Committee believes that live seafood presents a very low risk to food safety and should not be included in food safety regulation.

RECOMMENDATION 7

That the state government remove the regulatory requirements around the handling of live seafood in Victoria, in a way that is consistent with the approach taken in other states in Australia.

YABBIES

6.63 This discussion on yabbies provides a case study for examination of the need for regulation of low risk industries.

6.64 In Victoria, yabbies are most commonly found in farm dams. For human consumption, yabbies can be grown commercially for direct sale to consumers or markets, as well as for on‐farm ‘catch and eat’ businesses. Yabbies are also caught and eaten ‘in the wild’ and can be sold for bait.

6.65 Purging is the process of placing yabbies in clean water for 24–48 hours, to remove their gut content and any contaminants that may be present in their system (such as from dam water that may contain potential contaminants from livestock manure or pesticide residue from run off).

6.66 Up until mid‐2012, PrimeSafe included purging of yabbies as part of its licensing requirements. This requirement was removed following an appeal taken to VCAT by Mr Stephen Chara of Moora Moora Pty Ltd.

6.67 According to the VCAT finding, PrimeSafe had been influenced by the ‘Victorian Yabby Producers Manual 2000’ when developing its licencing requirements. The

293 Ms Jeanne Kelly, Owner, Arrow Fisheries, Public Hearing, Portland, 20 September 2012; Mr Lisle Elleway, above n 289;

Mr Geoff Ellis, above n 279; Eastern Zone Abalone Industry Association, above n 279. 294 East Gippsland Estuarine Fisherman’s Association, Submission, Number 1, 30 July 2012.



Manual recommends purging for yabbies grown in dam water at risk of contamination.

6.68 However, VCAT found that the practice of purging developed in the 1990s as a marketing exercise – some people argue that purging removes the ‘muddy’ taste295 – and that there is no scientific evidence that purging addresses any food safety issues. Any potential contaminants are considered to be addressed by the combination of gill washing (also a PrimeSafe licence requirement) and the fact that yabbies are cooked before eating.

6.69 Section 4D of the Food Act 1984 states that food is only considered unsafe if it causes physical harm after being ‘… consumed by the person according to its reasonable intended use’.

6.70 As VCAT states: ‘There are no reported health issues in humans arising from the consumption of unpurged yabbies, where yabbies have been cooked.’296

6.71 Purging is not required by any other state in Australia or by the Commonwealth Department of Agriculture, Fisheries and Forestry as an export requirement. In his evidence to VCAT, Mr Chara provided correspondence from the relevant food safety authorities in New South Wales, South Australia and the Department of Agriculture, Fisheries and Forestry to support this statement.297

6.72 FSANZ classifies yabbies as ‘low risk’ and does not mandate purging.298

6.73 Mr Casey explained to the Committee that PrimeSafe’s actions are based on the belief that food safety is determined by the quality of the water from which yabbies are harvested:

In the case of wildcatch harvest, if you are harvesting from the open ocean, you clearly do not need to worry about the water quality. In the case of yabby production, put simply, if you are harvesting from a dam, water quality is one of the hazards that you have to manage.299

6.74 Evidence presented to VCAT and to the Committee strongly suggests that the cost of purging makes Victoria’s yabby industry uncompetitive compared with the rest of Australia300 and that yabby farming currently represents a lost opportunity for regional development, in particular in the west of the state.301

295 Mr Trevor Domaschenz, Vice President, Victorian Yabby Growers Association, Public Hearing, Portland, 20 September

2012. 296 Victorian Civil and Administrative Tribunal, Applicant Moora Moora Pty Ltd, Respondent PrimeSafe, Ref no: G893/2011,

p 7. 297 Moora Moora, Submission, Number 14, 29 August 2012; and regarding Western Australia, Mr Trevor Domaschenz,

Submission, Number 37, 3 September 2012. 298 Food Standards Australia and New Zealand, Final Assessment Report Proposal P265, Primary Production and Processing

Standard for Seafood, Food Standards Australia and New Zealand, Canberra, 2005. 299 Mr Brian Casey, above n 260. 300 Moora Moora, above n 297; Little Nippa Yabbies, Submission, Number 50, 5 October 2012. Figures on purging, water

testing and other licencing requirements available in Mr Trevor Domaschenz Submission above n 297; Mr Trevor Domaschenz, above n 295.

301 Cr Ron Hawkins, Councillor, West Wimmera Shire Council, Public Hearing, Portland, 20 September 2012.



6.75 In 2004, Hon Philip Davis informed the Legislative Council: “In the yabby sector alone there has been a reduction from 150 enterprises to 20, and in terms of licensed enterprises producing yabbies for human consumption we now have only three of 60 that were previously registered.”302

6.76 The Committee heard that unpurged yabbies are currently imported into Victoria, possibly including yabbies grown in Victoria:

Mr DOMASCHENZ — We honestly cannot make money under PrimeSafe, so the growers up around Strathmerton and Shepparton take the yabbies to Echuca Moama to the licence place there and they come straight back into Victoria. They do not always even open the box.

You would talk to PrimeSafe and bring that up and they would say they do not care. That is the honest answer we get. They do not care. Those yabbies are produced in New South Wales and South Australia under a legal framework under the health department, so that state has assessed them as safe and they come into Victoria as safe yabbies ...

The CHAIR — So you are saying that your yabbies go from you to Moama?

Mr DOMASCHENZ — No, I have never done it.

Mr KATOS — But it has been done.

The CHAIR — Victorian growers could take their yabbies that PrimeSafe will not allow to New South Wales and then they can enter back in because we accept protocols from New South Wales?

Mr DOMASCHENZ — That is right. They go into the fish market and into the shops. The VCAT member was pretty astute; he grilled us pretty hard on that. You cannot pick them in a shop; you have got no way of knowing.303

6.77 Yabby farming in Victoria has traditionally been a way of farmers adding to their income, as well as young rural Victorians earning extra ‘pocket money’ when rains are good.304

6.78 Mr Stephen Bull, a farmer from Patyah, explained:

I was looking at [yabbies] not for myself as such but for my kids. Being out of town, you cannot do paper runs. We are not like you; we have not got a McDonald’s for them to work at. They do not have

302 Hansard, Legislative Council, Vol. 464, 15 December 2004, p. 2172 303 Mr Trevor Domaschenz, above n 295 304 Mr Trevor Domaschenz, above n 297; Little Nippa Yabbies, above n 297.



opportunities for employment that people or other kids have got. I thought, ‘Here’s something they’ll be able to do. They can just trip around in the soft‐top Suzuki with pots and catch yabbies. They can get what they can and away they go. It will give them something to do’. I know that in the early days Trevor used to get his kids to help; ten per cent they used to get. That is something that was done.305

6.79 In their submission to this Inquiry, Christine and Tony Milton describe having a successful yabby business that was in the process of being HACCP certified and meeting AQIS standards:

We walked away from all of this in February 2005 when after having several discussions with PrimeSafe regarding regulations, fees, permits, licences and no set systems to go by we closed our gates. Our farm has not reopened and we have this entire infrastructure lying idle.306

6.80 In its findings, VCAT found that PrimeSafe is entitled to require yabby growers to meet its licencing requirements but stated that PrimeSafe ‘… is directed not to require the Applicant to purge yabbies as a precondition to issuing such a licence’.307

6.81 In its response to the VCAT decision, PrimeSafe advised Mr Chara that ‘… Moora Moora Pty Ltd’s food safety plan will need to satisfy PrimeSafe that risks ordinarily addressed by purging are addressed by another means of control’.308

6.82 VCAT found that purging yabbies in water does not address any risks, and has found no scientific evidence supporting the purging of yabbies or its equivalent. Indeed, VCAT found that PrimeSafe agrees there is no scientific evidence supporting the need to purge yabbies.309 However, the Committee acknowledges PrimeSafe’s concerns that food safety can be compromised by poor water quality in dams, particularly if they are affected by run‐off. We also acknowledge that the decision was made by PrimeSafe after consultation with the ‘Yabby Producers Manual 2000’.

6.83 The Committee is also concerned that PrimeSafe is taking an adversarial approach to yabby licensing, instead of basing its decisions on scientific evidence. It was suggested to the Committee that PrimeSafe’s testing requirements are in excess of those required for oysters and mussels, which present a higher risk than yabbies.310

6.84 At the Committee’s public hearing in Portland, Mr Domaschenz said: ‘[PrimeSafe] have been unwilling in nine years to interact, learn about the industry or develop a collaborative approach to safe food.’311

305 Mr Stephen Bull, Farmer, Public Hearing, Portland, 20 September 2012. 306 Little Nippa Yabbies, above n 297, 1; Personal Communication, Ms Christine Milton, 30 October 2012. This issue was

also raised in the Victorian Legislative Assembly by Mr Ken Jasper MP, 15 September 2004. 307 Victorian Civil and Administrative Tribunal, above n 296, 1. 308 Moora Moora, above n 297, 27. 309 Ibid 310 Mr Trevor Domaschenz, above n 297. 311 Mr Trevor Domaschenz, above n 295.



6.85 As discussed in Chapter 5, when businesses resent the presence of a regulator in their field this may be a result of that regulator not being a ‘natural fit’. In the case of yabbies, the Committee believes that PrimeSafe is not the best body to monitor small yabby farmers in Victoria.

6.86 As there have been no recorded incidents of foodborne illness in Australia caused by eating cooked yabbies312 it would appear that a combination of low risk product and self‐regulation have worked well in the yabby industry. As such, the approach taken in Victoria goes against a High Order Principle of the Legislative and Governance Forum on Food Regulation, namely that the Primary Production and Processing Standards should ‘… provide a regulatory framework that applies only to the extent justified by market failure’.313

6.87 VCAT also stated: ‘It is open to the Victorian Government, through Parliament (although of course entirely a matter for it) to choose to provide certainty on the issue by an alternative regulatory pathway, either mandating purging or making it clear that purging is not to be required as a precondition to the sale of yabbies for human consumption.’314

RECOMMENDATION 8

That the state government manage the yabby industry in Victoria, in a way that is consistent with the approach taken in other states in Australia. This approach should include ensuring the quality of water used for production.

AQUACULTURE

6.88 In Wangaratta, the Committee spoke with Mr Simon Noble, an aquaculturalist and owner of Brimin Lodge Murray Cod. Mr Noble argued that PrimeSafe’s minimum category for fin fish processing should be reduced in acknowledgement of the fact that aquaculture is a small industry in Victoria.315

6.89 The current categories for processing fin fish and annual fees are:

Up to 150 tonnes ($755) 151–300 tonnes ($1,134) 301–750 tonnes ($2,640) 751–1,500 tonnes ($5,661) Over 1,500 tonnes ($7,547).316

6.90 Mr Noble said:

312 Mr Trevor Domaschenz, above n 297. 313 Australia New Zealand Food Regulation Ministerial Council, ‘Overarching policy guideline on Primary Production and

Processing Standards’, Food Standards Australia and New Zealand, Canberra. 314 Victorian Civil and Administrative Tribunal, above n 296, 22. 315 Mr Simon Noble, Owner, Brimin Lodge Murray Cod, Public Hearing, Wangaratta, 22 November 2012. See also: Brimin

Lodge Murray Cod, Submission, Number 43, 12 September 2012. 316 See: www.primesafe.vic.gov.au/licensing/seafood/processor/fees‐and‐charges.



The main problem that I have had with PrimeSafe is trying to get small processors recognised. As you may have noticed in my submission, the minimum category is 150 tonnes of seafood, and as I have pointed out to PrimeSafe on numerous occasions, that is more than the total process of all Murray cod and probably all fin fish – other than trout obviously; I mean warm water fin fish – grown in Victoria. So even if one person produced it all, it still would not get up to their minimum category ...

Mr KATOS — So a licence for aquaculture, permitting you to process up to 15 tonnes or something of that ilk?

Mr NOBLE — Yes, that is what I have argued: that we should be allowed to have 15 tonnes and that it may be, instead of $700 for the licence, $200 or $300 for the licence.317

6.91 The categories for aquaculture businesses that ‘grow out’ fin fish – that is, without any processing – and annual fees are:

Less than 15 tonnes ($245) 15–60 tonnes ($435) Over 60 tonnes ($733).318

RECOMMENDATION 9

That the state government work with PrimeSafe to encourage the development of aquaculture in Victoria through devising a more graduated scale of processing fees in recognition of the low production rates in the industry.

317 Mr Simon Noble, above n 315. 318 See: www.primesafe.vic.gov.au/licensing/seafood/aquaculture/fees‐and‐charges.


Maintaining industry reputation

KEY MESSAGES

Food safety legislation protects both the health of the consumer and the reputation of the food industry.

Cross‐subsidies exist in the dairy industry.

Dairy Food Safety Victoria maintains a close relationship with the specialty cheese sector.

Maturing cheese on wood is permitted in Victoria.

The issue of raw milk is a contentious issue among regulators and small specialty cheese makers.

Generally, big dairy businesses tend to have fewer complaints about the food safety framework than small dairy businesses.

There is no small dairy wholesalers category in Victoria.

Industry would like wider use of information collected during food safety audits.

“Certainly the focus of the industry must be on maintaining market access, ensuring the safety of our product and ultimately the image of our industry.” Ms Kerry Callow, Melbourne

7.1 This chapter discusses the importance of maintaining Victoria’s reputation for producing safe food and the means by which that can be achieved in the context of the dairy industry.

7.2 During the Inquiry, at regional hearings and in Melbourne, the Committee received evidence from a wide variety of members of the Victorian dairy industry. One of the



subjects raised at each public hearing was the value of the overall reputation of food production in Victoria, both domestically and globally. There is awareness in the industry that food safety regulation protects both the health of the consumer and the industry’s reputation.

7.3 In a submission to this Inquiry, Mr Kevin Tesselaar states:

If government intervention was withdrawn from food safety it would result in the risk of a serious potential for market failure involving an extensive dairy food poisoning outbreak. Such an incident could seriously harm the reputation and market share of the manufacturer/processor concerned, and could also impact the entire local and/or export dairy market, causing the whole industry to suffer.319

7.4 Ms Michelle Hill, Quality Assurance Manager at Warrnambool Cheese & Butter, described to the Committee how Warrnambool Cheese and Butter’s customers look for reassurance whenever they hear any negative news in the industry:

If there is an issue with any one of the dairy companies within Australia, small or large, we will certainly receive phone calls from our customers internationally and domestically to say, ‘Have you got the same problem?’. In being able to state across the board that we have registered with our state regulatory authorities for domestic manufacture or that as exporters we have across the board registered as export establishments, that carries a lot of weight with our international customer, and domestically it gives a lot of assurance that there is that level of care being shown across the whole industry.320

7.5 Incidents in any business within the industry can directly influence how people view the sector and other companies in it.

7.6 A number of businesses spoke to the Committee about the need to maintain the reputation of the industry overall.321

7.7 The risk to food safety presented by soft cheeses in particular was revealed recently when over 100 different soft cheese products produced by Jindi Cheese were recalled following an outbreak of listeria.322

7.8 The Committee learnt that food safety fee structures are designed in such a way that larger dairy companies are cross‐subsidising smaller businesses. This is because it is thought that smaller businesses generally present a greater risk to food safety than

319 Mr Kevin Tesselaar, Submission, Number 52, 24 October 2012, p 3. 320 Ms Michelle Hill, Quality Assurance Manager, Warrnambool Cheese & Butter, Public Hearing, Camperdown, 19

September 2012. 321 Mr Franck Beaurain, Chief Executive Officer, Jindi Cheese, Site Visit, Jindivick, 16 October 2012; Mr Matthieu Megard,

L’Artisan Cheese and Mouse Trap Café, Site Visit, Timboon, 19 September 2012; and Mr Ron Paynter, Owner, Paynter Farms Ellinbank, Public Hearing, Bairnsdale, 17 October 2012.

322 ‘More illness cases linked to soft cheese products’, Department of Health, 18 January 2013.

Chapter seven: Maintaining industry reputation


larger businesses and the cross‐subsidies act as an insurance premium to protect the reputation of the whole industry.

7.9 Dr Catherine Hollywell, Dairy Food Safety Victoria’s Chief Executive Officer, told the Committee:

The dairy industry is very cognisant of the fact that you would not need too much of an issue with quite a small manufacturer for dairy to get a bad name. That gets picked up internationally as well. That is what I was talking about – cross‐subsidy – earlier on. I do think that the larger manufacturers here do cross‐subsidise a lot of the work we do at the smaller end. I have had no complaints about that. I just want to be more transparent back to industry. I think largely some of the small manufacturers can see where the resource goes, so they can actually understand the resource implications for their end of town because they tend to have quite specific needs. I need to keep balancing that outcome. But you are absolutely right; that is a very strong feeling in the dairy industry.

The CHAIR — They want to protect the image, and they are quite happy to cross‐subsidise.

Dr HOLLYWELL — Absolutely.323

7.10 These cross‐subsidies also exist in South Australia for the same purpose according to Mr John Crosby, General Manager, Dairy Authority of South Australia.324

SPECIALTY CHEESE

“The kind of relationship we have with Dairy Food Safety is that we are not frightened of audits or regulation. We think they are important for our industry, and we want them there. We want them to be partners with us in providing safe food for Victorians, but education is needed on both sides of the specialty cheese industry.” Ms Ann‐Marie Monda, Sutton Grange

7.11 The Committee heard evidence from a number of Victorian specialty cheese makers. The sector is a small but vibrant one with debate focused on the level of assistance provided to the sector by Dairy Food Safety Victoria.

7.12 In Castlemaine, the Committee spoke with Ms Carla Meurs and Ms Ann‐Marie Monda from Sutton Grange Organic Farm and makers of Holy Goat Cheese.325 Ms Meurs argued that both the private and public sectors in Victoria need to increase their knowledge of specialty cheese making techniques:

323 Dr Catherine Hollywell, Chief Executive Officer, Dairy Food Safety Victoria, Pubic Hearing, Melbourne, 20 November

2012. 324 Mr John Crosby, General Manager, Dairy Authority of South Australia, Consultation, South Australia, 1 November 2012. 325 See also Sutton Grange Organic Farm, Submission, Number 27, 3 September 2012.



Ms MEURS — I think probably the biggest problem is not so much the safety regulation of our cheese; it is for the speciality cheese industry, the capacity of us as cheese makers to really produce very high quality specialty cheeses. It is a market that has great potential; that is why we are importing so much of that cheese, because there is a market out there for that cheese. I know for myself we do produce very high quality goat’s cheese, but I am extremely aware of my limitations as a cheese maker and the things I do not know and cannot find out in this country. There is no knowledge here. There are thousands of varieties of cheeses made in the world, and in Australia currently we are really just producing, in our speciality cheese market mainly, white mould cheeses, washed rind cheeses – there are very few hard‐ripened cheeses in the speciality cheese market – and some goat cheese.

Ms MONDA — Marinated.

Ms MEURS — And some marinated fettas. Actually we are nowhere near our capacity to meet the markets.326

7.13 Pressed as to whether developing this capacity is industry responsibility or the responsibility of the regulator Ms Meurs said: “It is a bit of a combination because if we want to grow the options, the regulator has to be up to speed.”327

7.14 The role of government is also important to consider.

7.15 The Committee notes the current Ministerial Statement of Expectations for Dairy Food Safety Victoria, which states: ‘I recognise the importance of your sector to Victoria and I understand that you, as the regulator, are expected to actively support Victorian Government initiatives to enhance the economic growth of your sector.’328

7.16 The Victorian Government’s concern is that the industry grows and prospers and that its objectives, such as those that can be found in the Statement of Expectations, will contribute to the growth.

7.17 This Committee believes that a strong regional development focus by government is an adjunct to support for the development of the food production industry. The Committee supports and encourages all regional businesses, including both larger producers and specialty cheese makers. As part of this Inquiry the Committee met with many rural and regional food producers who are committed to developing the sector as well as their own business and who are also making a contribution to their community.

7.18 Ms Monda and Ms Meurs informed the Committee of a partnership between the speciality cheese sector, Dairy Food Safety Victoria and Swinburne University. The

326 Ms Ann‐Marie Monda, Owner, Sutton Grange Organic Farm, Public Hearing, Castlemaine, 5 September 2012 and Ms

Carla Meurs, Owner, Sutton Grange Organic Farm, Public Hearing, Castlemaine, 5 September 2012. 327 Ibid. 328 The Ministerial Statement of Expectations can be found at Dairy Food Safety Victoria’s website:

www.dairysafe.vic.gov.au.



aim of the partnership is to examine cheese making techniques new to Victoria, in order to prove their safety. The value of such a partnership is that it shares the burden of proving food safety across the private and public sectors.329

7.19 Ms Meurs explained:

The reason we like partnerships is because somewhere like Swinburne University of Technology has very sophisticated testing equipment. For example, if you wanted to prove the case about maturing cheese on wood I would like it to be then just a project that happens with Swinburne University in partnership with cheese makers in Victoria and Dairy Food Safety Victoria. We give them the stuff, they get the report and that is the end of that forever – not ‘I prove it’, ‘You prove it’. It is a scary area. We can improve this.330

7.20 Ms Meurs added that in her experience it is easier to make speciality cheese in Europe than in Victoria. This is because countries in Europe have a longer history of cheese making, so their understanding of the microbiology involved in the process is greater, among industry and regulators alike.

7.21 While this is undoubtedly true Mr Franck Beaurain, who grew up in France, told the Committee that it is difficult to make a direct comparison between Australia and a country such as France. Mr Beaurain said that not only is there a greater knowledge of cheese making in France, there is also a different food eating culture, one that is both more open to eating higher risk products such as soft cheese and accepting of the risk of illness arising from eating such products. Whereas in Australia, consumers do not have such a strong acceptance and, as stated above, the industry in Australia must be more active in protecting its reputation.331

7.22 Ms Monda expressed concern about the approach taken by Dairy Food Safety Victoria in which each stage of the cheese making process is placed under scrutiny to ensure its safety. Ms Monda argued that testing the final product itself should suffice:

What we always say is that it is not up to the small cheese makers to prove [the process]. The proof is in the cheese being tested and passing the microbiological tests as they exist. You cannot take the pieces of cheese independently and say, ‘These cultures are safe; this is safe; that’s safe’. What you say is, ‘This is the food’. We get that tested for microbiological levels, and if that says it is safe, it is safe. You do not break it down into its parts.332

329 The Committee also notes Dairy Food Safety Victoria’s work with Melbourne University’s Microbiological Diagnostic

Unit. 330 Ms Carla Meurs, above n 326. 331 Mr Franck Beaurain, above n 321. 332 Ms Ann‐Marie Monda, above n 326.



7.23 Dr Hollywell explained that the main ethos of a HACCP‐based system – on which Victoria’s food safety system is based – is to examine each point in a food manufacturing process to identify potential risks to food safety:

What we do is look at risk. If somebody is doing something that is very innovative, it can be quite high risk even though it can be quite a small manufacturer. The question also seems to go to the heart of what we do, which is to focus on the procedures of anything, because that is where the risks are, and we look at HACCP – hazard and critical control point – based systems, because that is where our manufacturers have identified what the critical control points are through the process. We do not rely on end‐point inspection, so we would look at a specialty cheese just as we would look at any other product.333

7.24 Dr Hollywell added that Dairy Food Safety Victoria is committed to helping specialty cheese makers develop their capacity:

Some specialty cheese manufacturers provide some significant challenges, because some of them want to do some quite innovative things, and we would endeavour to help them with that in understanding their food safety risks ... In terms of some work we have done recently to try and help those smaller manufacturers, we have developed a Food Safety Risk Assessment Framework, and we have done that in conjunction with a lot of the smaller players and even some of the bigger players. What we have attempted to do is pull together a logic tree that helps people understand where they can introduce new risks if they are thinking about developing new products. If they want to marinate something – or add herbs or sundried tomatoes or whatever – it makes them think about the individual risks they might be putting in. We point out to them where those risks might be and leave it to them to take a look at the data they are going to need to pull together to determine whether their system is going to be managing risks effectively. That is something we are rolling out right now through our Learning Network Forum.334

7.25 In Camperdown, the Committee spoke with Mr Simon Schulz, a dairy farmer and cheese maker from Schulz Organic Farms. Mr Schulz agreed that Dairy Food Safety Victoria is supportive of the specialty cheese making sector, adding that the nature of outcomes‐based regulation determines the way in which regulators are free to encourage innovation whenever a process has been proven as safe:

I probably understand, from a regulator’s point of view, that you need to prove your method rather than when my grandfather did it – the experience he told me was that back when he was doing it the

333 Dr Catherine Hollywell, above n 323. 334 Ibid.



regulator was very strict on following a particular set of guidelines, and you could not deviate at all, whereas I think nowadays, as long as you can prove that the end product is safe and clean, then you can pretty much – it is prescribed, but there are a lot more variables there that you can use for innovations and so forth. I feel that I can innovate without being restricted by Dairy Food Safety as long as I can prove that the product is safe at the end of the day and the quality is there. That is more important for me ... Dairy Food Safety now have a forum online, and we can post questions there about new technologies and rebound from Dairy Food Safety’s own experience, but it is also sort of like a social network in a way that we can draw off the experience of others without a competitive nature.335

7.26 Ms Monda also acknowledged the way in which Dairy Food Safety Victoria is working with the sector to improve the sector’s capacity:

And there has been a willingness on Dairy Food Safety’s part to interact more with dairy producers. They have been having these forums every three months. They have them in Melbourne and they also have them in the regions. They want to disseminate information, they want to support people to lift their game in their auditing and they are willing to share the body of knowledge they have, instead of just saying, ‘We’re the regulators; that’s not our job to inform you’. They have actually moved positions.

I know their position now is that they are able to contribute to economic development, and it is not just about auditing and being a regulator. I think that is a really fantastic move, and I was really inspired. That is what inspired us to put in a submission, because they have a body of knowledge that is strong and that can grow, and we have a body of knowledge that is mediocre. I think we have got a lot of mediocre cheeses in Australia, and with some support from Dairy Food Safety Victoria and some additional educational training we can compete with European cheeses. We are not doing that at the moment, and we will not be able to do that unless we have some changes.336

7.27 The specialty cheese making sector itself must also show some initiative to improve its capacity, which the Committee was reminded of by Ms Meurs:

We are talking about the cheese that people are happy to pay $80 a kilogram for, not $12 or $10 or $7. It is a small part of the market, but it is a very vibrant part of the market. It is like the specialty wine industry; it is like high‐profile restaurants. There is a whole lot of

335 Mr Simon Schulz, Owner, Schulz Organic Farms, Public Hearing, Camperdown, 19 September 2012. 336 Ms Ann‐Marie Monda, above n 326.



money out there for this part of the industry, and at the moment the Europeans are collecting the money and we are not. We are a dairy state, and we should have big maturing caves in this state; that should be a specialised business. We have the quality of milk to really churn out aged fabulous cheeses. The way maturing caves work is that usually that is a separate business. A business like ours would make some cheese that we just sell on to an aphanite, and they sell those cheeses for $100 a kilo.337

7.28 The examples below – maturing on wood; and the use of raw (unpasteurised) milk in cheese products – are indicative of the issue of innovative or non‐standard practice in the food production sector, particularly in relation to small businesses. The goals of the regulator, and government, to ensure public health and safety can be challenged when food producers wish to manufacture new products.

7.29 This issue is discussed in terms of the regulators’ education role in Chapter 9.338

MATURING ON WOOD

7.30 The Committee heard conflicting evidence regarding the process of maturing cheese on wood. Most cheeses are matured on stainless steel or plastic racks because that is accepted as a safer process, whereas wood presents a greater risk of pathogens developing during the maturing process.

7.31 Some specialty cheese makers are of the opinion that maturing on wood is prohibited in Victoria. Dr Hollywell clarified that maturing on wood is in fact allowed, acknowledging that it is Dairy Food Safety Victoria’s responsibility to make this more widely known to the sector:

Obviously there are some learnings for me in that in terms of some internal sharing of information about what has been allowed. Maybe it was approved some years ago in manufacture, maybe the food safety manager who did that assessment is no longer with us; I do not know. That is not an excuse; I need to look at our systems.339

7.32 Dr Hollywell added the caveat that Dairy Food Safety Victoria must take Intellectual Property rights into account before sharing information throughout the sector:

In terms of us unfortunately not being as helpful as we could be with a manufacturer who wants to mature cheese on wood, that is something that we can address immediately and will, and we can share those learnings with our current Learning Network Forum. The issue there will be that if a manufacturer wants to do it and have their own commercial or proprietary arrangement, we cannot share

337 Ms Carla Meurs, above n 326. 338 Also see: www.dairysafe.vic.gov.au/products‐and‐services/knowledge‐and‐information. 339 Dr Catherine Hollywell, above n 323.



that information, so I would need to explore that a little more closely in terms of what the specifics of the issue were and how we can help them.340

7.33 Mr Crosby told the Committee that maturing on wood is also allowed in South Australia, where it is common practice to use a sealed wood and a heavy varnish. However, the Dairy Authority of South Australia believes that maturing on stainless steel and plastic is a safer process.341

RAW MILK

7.34 An ongoing issue of contention among specialty cheese makers is that of using raw (unpasteurised) milk to make cheese products. While some believe raw milk products are a good commercial opportunity for the sector, others believe such products present too great a risk to the small specialty cheese sector in Australia.342

7.35 FSANZ has made a determination that raw milk products are to be divided into three categories distinguished by their moisture content (the more moisture in a dairy product the greater the risk of pathogens developing):

Category 1 – hard cheeses – are allowed Category 2 – semi‐hard cheeses – FSANZ is yet to make a final determination Category 3 – soft cheeses, raw milk for drinking (although goats milk may be an

exemption) – are not allowed.343

7.36 Regarding Category 2 products, Dr Hollywell said: “It is going to be quite a difficult process to work out what we do in that area, but there may well be opportunities there for innovative production systems from smaller manufacturers. We are yet to see.”344

7.37 The evidence the Committee heard about raw milk was strongly influenced by business size. As a general rule, small businesses wanted more freedom to manufacture raw milk products, while larger businesses and regulators were more accepting of the status quo.

7.38 For example, Ms Kris Lloyd, Manger of Woodside Cheese Wrights, a specialty cheese company in South Australia, said that she would like to make soft cheeses using raw milk. Ms Lloyd acknowledged that manufacturing a safe raw milk product is difficult but argued that such products would prove valuable for the sector.345

340 Ibid. 341 Mr John Crosby, above n 324. 342 For further discussion of raw milk products see 1.41. 343 Dr Catherine Hollywell, above n 323. 344 Ibid. Also see: FSANZ ‘Proposal P1022 – Primary Production and Processing Requirements for Approved Raw Milk

Products’. 345 Ms Kris Lloyd, Manager and Head Cheese Maker, Woodside Cheese Wrights, Site Visit, South Australia, 1 November

2012.



7.39 However, Mr Crosby countered that in fact the small size of the sector makes it too vulnerable to any loss of public confidence caused by an outbreak linked to raw milk products.346

7.40 A similar argument about industry reputation was made by Ms Helen Dornom, Manager, Sustainability, Dairy Australia. Ms Dornom told the Committee:

Certainly as an industry – and Dairy Australia understands that obviously small cheese makers are also part of the industry – the bulk of the industry, in looking at this, feels that whilst we have not negated the ability to produce raw milk products, we have also looked at the risks associated with that and the capacity of different companies and our industry to be able to produce those in a way that does not put that food safety reputation at risk.

… we have now looked at some raw milk cheeses, where the risks in producing those are not great – that is the hard‐type cheeses. We have now moved into the hard end, which is looking at those soft cheeses in particular, and the industry has taken the view in the past that we believe at this stage pasteurisation or a heat treatment process is still the most appropriate means of ensuring safety. We are not closed to alternatives, but we actually want to make sure that the systems do allow for product to be produced in a way that does not put the whole industry at risk.347

7.41 In Victoria, Mr Beaurain told the Committee that although it is possible to manage raw milk pathogens Jindi Cheese has no desire to start making raw milk products, partly because they are high risk products which therefore makes the process expensive.348

7.42 Mr Crosby added another observation that regulators are by nature more cautious than industry, stating: “The last people to move will be the regulators because the system works well at the moment.”349

7.43 This tension that can exist between cautious regulators and businesses keen to innovate is a key lesson that the Committee is taking out of this Inquiry. However, the Committee does not believe these different viewpoints are an inherent fault of the food safety system. Nor does it believe they are irreconcilable differences, merely a point for both the private and public sectors to be aware of.

7.44 The Committee adds that these are generalisations made for the sake of brevity here. The Committee is aware of the regulators’ willingness to encourage innovation, as well as Victorian food businesses’ overriding commitment to producing safe food.

346 Mr John Crosby, above n 324. 347 Ms Helen Dornom, Manager Sustainability, Dairy Australia, Public Hearing, Melbourne, 22 October 2012. 348 Mr Franck Beaurain, above n 321. 349 Mr John Crosby, above n 324.



SMALL VERSUS LARGE

7.45 As with the issue of raw milk, dairy industry complaints about the food regulation system were mostly determined by business size. In general, the larger the business, the more satisfied they were with the system – albeit with the frustration caused by national inconsistencies as noted in Chapter 2 – and their professional relationship with Dairy Food Safety Victoria.

7.46 In its submission to this Inquiry, United Dairy Power states that it has ‘support and faith in the current system’ and that Dairy Food Safety Victoria has a ‘strong calibre board with excellent knowledge in multiple areas’.350

7.47 Ms Ceridwen Brown of Milawa Cheese Factory referred to Dairy Food Safety Victoria as “Australia’s leading dairy food safety regulator”. However, Ms Brown did make a request for a change to the Dairy Food Safety Victoria licence, to help businesses with HACCP accreditation:

We would like to see a change to the licence itself to include the fact that we have implemented a food safety program in compliance with HACCP due to the fact that we have a licence. That would help to reduce administrative time in chasing proof that a licence should already show, and it would help us to increase sales, because we have got a licence but it does not actually tell people what it does. To get an official HACCP tick – it is a separate organisation – we would need to apply to have more auditors come to our factory from New South Wales to oversee the same or lower level of food safety at a further cost to the audits we already have to pay for under the DFSV. Why can it all not come under the same licensing and auditing that we already comply with?351

7.48 On the other hand, small dairy businesses were more likely to have had a bad experience.

7.49 Mr Daniel Encel, a small mixed food business owner in Gippsland, told the Committee that although Dairy Food Safety Victoria understands the systems used by big dairy processors, it is not so comfortable working with smaller businesses. Mr Encel said: “They have no concept of a business like ours. They are set up for Parmalat and Unilever. A little place like us, they just do not know how to deal with it.”352

7.50 Ms Monda made a similar point, referring to the way in which Dairy Food Safety Victoria’s approved third party auditors can fail to understand a small cheese maker’s unique approach to their business. Ms Monda was reiterating her argument

350 United Dairy Power, Submission, Number 56, 28 December 2012. Similar evidence was presented by Fonterra, Site Visit,

Stanhope, 21 November 2012; Ms Michelle Hill, above n 309; Ms Jocelyn Bevin, Acting Chief Executive Officer, WestVic Dairy, Public Hearing, Camperdown, 19 September 2012; and Mr Franck Beaurain, above n 321.

351 Ms Ceridwen Brown, Assistant General Manager, Milawa Cheese Factory, Public Hearing, Wangaratta, 22 November 2012.

352 Mr Daniel Encel, Owner, Walkerville Kiosk, Public Hearing, Sale, 18 October 2012.



that Dairy Food Safety Victoria and industry must continue learning from each other to improve the overall sector:

But every little cheese factory has its little idiosyncratic ways. Our pasteuriser would be different to, say, Sue from Locheilan Cheese’s pasteuriser. We have had serious disagreements with Dairy Food Safety when we have had auditors come in who do not understand our pasteurisation set‐up. We have to sort that out. So we have meetings with their regulators, they visit the farm. We do not just accept that this is the regulation and we have to stick to it. This is the regulation, but this is the way it can be interpreted.

In that instance it was about a particular pipe that we put on when we were doing a cleaning‐in‐place procedure. The auditor just did not understand that that pipe was used for that cleaning process. I think what happens to a lot of cheese makers is that they just sort of give up then and go, ‘They’re the auditors, and we’ll accept it’. But we have actually risen to the challenge of Dairy Food Safety and said, ‘Yes, some of your procedures are great, but this one, for example, with this auditor not knowing this process is not good enough. You need to know how this process works’.353

7.51 Dr Hollywell acknowledged that it is difficult for a regulator to understand every single process present in the specialty cheese sector, in particular because of the way in which their processes differ from larger processors:

At the smaller end of the market one of the things that we would take into consideration that is quite challenging is the competency of the individuals in the systems, because we cannot judge somebody to be a fit and proper person. We have to look at what they are doing and whether we have confidence that they are going to be able to put that into practice. Sometimes the risk is not even the product; it is the individuals who are attempting to set up a business. But at the large end, the risks can be very different and much more subtle in terms of very advanced and complicated manufacturing systems and processes that have multiple critical control points that need to be looked at.354

7.52 However, Dr Hollywell added that Dairy Food Safety Victoria is aware of this problem and is working with the sector to improve its understanding:

But one of the challenges we have there with the smaller manufacturers is they tend to have some quite different needs, and we cannot tailor the business to meet everybody’s needs all the time. So we have been working really closely with a body that is in the

353 Ms Ann‐Marie Monda, above n 326. 354 Dr Catherine Hollywell, above n 323.



process of being reinvigorated, and that is the Australian Specialist Cheese Manufacturers Association. It has worked very, very well in the past. It has sort of drifted and lost its way a little bit and it is now reinvigorating itself and has a fair bit of new blood in it and new interest. I am working with them and saying to them, ‘It would be really fantastic if you can help your industry, your specialist manufacturers, identify what their key issues are’. That would give us some priorities to interact with, work with and share information with. That is what I would really like to do.355

7.53 The Committee understands the challenge regulators face trying to work with all businesses in their sector. Notwithstanding the resources required for this to take place, there may be innovative ways to communicate across the sector and to engage proactively with the industry. The Committee heard a great deal of evidence that Dairy Food Safety Victoria is willing to pursue this level of engagement and communication with the dairy industry and commends Dairy Food Safety Victoria for its efforts.

7.54 The Committee agrees with Dr Hollywell’s point that industry also has an important role to play in this field – responsibility for mutual understanding of unique processes does not rest solely with the regulator.

7.55 Ms Callow suggested that the National Centre for Dairy Education Australia could take responsibility for proving the safety of new or unique processes.356

7.56 It should be acknowledged that overall the Committee heard very few complaints from the dairy industry about the food regulation system in Victoria. It is also important to acknowledge the compliments heard from small dairy businesses.

7.57 For example, Mr Schulz described the way in which Dairy Food Safety Victoria guided him in the development of his food safety program, adding that the regulator was also helpful in developing his overall business:

As I have grown in terms of size and experience, Dairy Food Safety has been there a lot of the way just as a sounding board. Rather than coming out with a big stick if something went wrong, initially they were always guiding and allowing me to improve through advice and through direction to other experts and so forth. I think the way they helped us to set up was very handy. Without that help, things would certainly have been a lot harder.357

WHOLESALE

7.58 The issue of the way in which Dairy Food Safety Victoria regulates small wholesalers was raised by Mr Daniel Encel, Owner, Walkerville Kiosk.

355 Ibid. 356 Ms Kerry Callow, President, United Dairyfarmers of Victoria, Public Hearing, Melbourne, 22 October 2012. 357 Mr Simon Schulz, above n 335.



7.59 Walkerville Kiosk is a mixed food business located in Gippsland. Mr Encel and his partner began making their own ice‐cream several years ago, which they sold retail from their business. Under the Memorandum of Understanding between Dairy Food Safety Victoria, PrimeSafe, the Department of Health and the Municipal Association of Victoria, Walkerville Kiosk was regulated by its local council, South Gippsland Shire Council. However, under the same Memorandum of Understanding when Walkerville Kiosk began wholesaling Dairy Food Safety Victoria assumed responsibility for regulating the business.358

7.60 Mr Encel argued that because his ice‐cream was of a very high quality and his food safety program was HACCP based (albeit unaccredited) his business presented a very low risk that had been well regulated by South Gippsland Shire Council.

7.61 Mr Encel said:

They keep a pretty close eye on us and they are the people on the ground. They know our situation, they know who our suppliers are …

The CHAIR — And when the council food inspector came, what would she or he do?

Mr ENCEL — She would check our kitchen exhaustively – she is very thorough – and check all our shop to make sure there was nothing after the use‐by or the best‐before date. And, because we sent in a system of traceability, so for every single bit of ice‐cream that we make we know exactly where the raw materials came from, the date they arrived, the day the ice‐cream was made, the day it went out – everything – she would check to make sure we were complying with the plan that we had put in place with her.359

7.62 Mr Encel had also been informed that under the Memorandum of Understanding small wholesalers remained under the auspices of their local council for food safety purposes.

7.63 The Committee has no reason to question either the quality of Mr Encel’s ice‐cream or the extent of his food safety program. However, Appendix A to the Memorandum of Understanding, which covers ice‐cream and frozen yoghurt manufacturers, states that local councils have responsibility for food safety purposes for retail sales only where: ‘None of the ice‐cream and / or frozen yoghurt is wholesaled to other proprietors.’360

7.64 That is, there is no ‘small wholesalers’ category under the Memorandum of Understanding.

358 Memorandum of Understanding between Dairy Food Safety Victoria, PrimeSafe, the Department of Health and the

Municipal Association of Victoria, 2012. 359 Mr Daniel Encel, Owner, above n 352. 360 Memorandum of Understanding between Dairy Food Safety Victoria, PrimeSafe, the Department of Health and the

Municipal Association of Victoria, 2012. p 11.



7.65 However, Appendix A to the Memorandum of Understanding includes ‘smaller scale’ and ‘larger scale’ categories for dairy manufacturers and retailers. The Committee believes that it would be easier for regional businesses to plan for expansion were these categories to be defined.

RECOMMENDATION 10


7.66 The Committee raised the issue of wholesaling in the dairy industry with Dr Hollywell. She explained that from Dairy Food Safety Victoria’s perspective businesses present a higher level of risk once they begin wholesaling:

We do not make a determination about whether you are wholesaling a large amount or a small amount because it is incredibly difficult to keep tabs on; you would actually have to be there watching it very closely … The issue of risk management here is that once you start to wholesale, you are in a different risk category. Your level of record‐keeping, your level of business acumen – we deem that to be a higher risk activity. Often at the smaller end of the market when people are wholesaling and we have a problem that we need to investigate, following where the batches have gone and what went where and who’s got what can be quite difficult. That is just the way we look at that situation.361

7.67 The small amount of ice‐cream being wholesaled by Walkerville Kiosk led Mr Encel to question Dairy Food Safety Victoria’s commitment to an outcomes‐based approach to regulation.

7.68 Dr Hollywell explained that Dairy Food Safety Victoria is motivated by its responsibility to food safety in Victoria: “If somebody has decided to undertake an activity and there is a good business proposition in it but it tends to be higher risk, we are going to take a closer look at what they are doing and we are going to require certain standards to be maintained.”362

7.69 Another issue common to all small businesses is when the amount of product being traded is so small that compliance fees (especially audit costs for small regional businesses) can make expansion seem not worthwhile. The Committee understands that regulators have to define boundaries and wherever those boundaries are drawn will cause some businesses to feel aggrieved.

361 Dr Catherine Hollywell, above n 323. 362 Ibid.



7.70 Many businesses decide that a period of time without significant profit will be worthwhile in terms of their overall business goals, however for others the lack of flexibility and lengthy periods without profit may be an impediment to their plans for business expansion.

7.71 Given the commitment of government to regional business development it is important that a balance is struck between setting acceptable boundaries and encouraging business development and growth, particularly in regional Victoria. This Committee believes that with ever improved communication and understanding between the regulator and the food production industry this balance can be achieved.

SINGLE ON‐FARM AUDITS

7.72 It is Victorian Government policy for food businesses to be regulated by one body only.363

7.73 Dairy Food Safety Victoria and the Commonwealth Department of Agriculture, Fisheries and Forestry have signed a Memorandum of Understanding in which DAFF recognises Dairy Food Safety Victoria audits as meeting export obligations.364 However, addressing non‐compliance regarding export obligations remains the responsibility of DAFF.

7.74 The Committee believes this Memorandum of Understanding is recognition of the high regard in which Victoria’s dairy regulator is held.

7.75 The Memorandum of Understanding was signed in December 2011 and as Dr Hollywell explained:

… that signalled an incredibly big challenge for us and a big responsibility, because it formalises a one‐audit approach that incorporates the audit for food safety and the audit for export market access. It removes the duplicate audits that used to be conducted where we would do food safety and the federal agency would audit for export market access.365

7.76 In its submission to this Inquiry, Dairy Food Safety Victoria states that the agreement can also be used to prevent ‘regulation creep’ in the domestic market:

An important function which DFSV provides to industry as a result of the MoU with DAFF is to arbitrate on what additional management practices are required to meet the export requirements that are above those required to comply with the national dairy standard. The expert advice provided by DFSV ensures that practices which a business might implement to ensure market access do not result in

363 Memorandum of Understanding between Dairy Food Safety Victoria, PrimeSafe, the Department of Health and the

Municipal Association of Victoria, 2012. 364 The MoU was also signed by the Tasmanian Dairy Industry Authority and the Dairy Authority of South Australia. 365 Dr Catherine Hollywell, above n 323.



increases in the regulatory burden of businesses that sell their product in the domestic market only.366

7.77 The Memorandum of Understanding has generally been received positively across industry, with United Dairy Power stating: ‘It is beneficial to us as an industry to have one audit process that covers off the requirements of all other bodies … This is well communicated and audited at factory level.’367

7.78 The establishment of the agreement itself represents a great milestone for the industry. However, the Committee did hear that ongoing improvements can be made to how the agreement functions. For example, Fonterra has called for greater clarification of the roles and responsibilities of each body involved in the agreement.368

DAIRY AUDITS FOR OTHER REQUIREMENTS

7.79 The Committee heard conflicting evidence regarding the use of single on‐farm audits in which information collected by the food regulator would be made available to other bodies, to decrease the burden on farmers.

7.80 The Dairy Australia submission states:

The Current Deed of Undertaking DFSV has with dairy farm auditors would appear to preclude auditors from using information collected during regulatory food safety audits for other audit purposes. Thus, a single, multifaceted farm audit is not possible at this stage.369

7.81 Dairy Australia is referring to dairy companies collecting information during its audits on behalf of Dairy Food Safety Victoria and using that information for other purposes, such as animal welfare requirements, determining water use and private sector Quality Assurance demands.

7.82 The submission adds:

There is opportunity for DFSV to maintain its regulatory oversight of on‐farm food safety programs while allowing information collected through compliance audits to be used by other groups and not controlled by DFSV. The Deed of Undertaking should be reviewed to facilitate greater flexibility to achieve a single audit for multiple requirements.

DFSV has noted previously that under its single assurance system it could include additional audit requirements if all dairy companies agreed what should be included. DFSV would then collect this

366 Dairy Food Safety Victoria, Submission, Number 39, 3 September 2012. 367 United Dairy Power, above n 350. 368 Ms Carol Bate, Regulatory Manager, Fonterra, Public Hearing, Melbourne, 22 October 2012; Fonterra, Submission,

Number 48, 3 October 2012. 369 Dairy Australia, Submission, Number 46, 2 October 2012, p 4.



additional information and provide it to nominated groups. This is an unnecessary responsibility for DFSV.

DFSV should continue to collect information on food safety compliance – but it should allow others to determine what additional information is collected during a single audit. The food safety and additional information should be able to be held by the dairy companies and dairy farmers to use as needed to assure commercial and other regulatory requirements, without DFSV being involved. There will be an increasing differentiation of the assurance information required by individual dairy companies and farm businesses, depending on the markets being supplied. DFSV would provide a valuable service by continuing to ensure the integrity of the food safety assurance process and working with other regulators to continue to streamline the regulatory requirements at state, national and export level.370

7.83 At a public hearing in Melbourne, Ms Kerry Callow, President, United Dairyfarmers of Victoria suggested that there are regulatory barriers currently in place preventing the wider dissemination of information collected during dairy audits:

One of the principles that the UDV does support is a single‐audit process. One thing you must understand is that our QA systems on‐farm cover more than just food safety. There is also a market access and quality assurance part, which is largely put there by factories or processors so that they can ensure that the product they receive off‐farm has an end use.

This tends to cause some problems perhaps on farms of farmers not necessarily understanding that not everything in that audit is a food safety issue. Sometimes there are market access issue questions in there. However, having said that, our position would still be that we have a single‐audit system that has multiple purposes. The industry beyond the farm gate needs to be reporting to different organisations, and that should be able to be done.

My understanding at the moment is that there are perhaps some barriers for the dissemination of information that is collected at an audit process, and if you wanted to streamline something, that is probably the area that is well worth having a look at.371

7.84 However, Dairy Food Safety Victoria’s Annual Report 2011–12 contains information on how the regulator is using a ‘single system’ approach to reduce the audit burden for dairy farmers, in particular with regard to Environmental Protection Authority requirements:

370 Ibid, p 11. 371 Ms Kerry Callow, above n 356.



In addition, the Dairy Food Safety Victoria ‘single system’ also provides assurance that other requirements, as agreed by industry, are also met. An example of this is the sharing of the Dairy Food Safety Victoria approach with the Environment Protection Authority (EPA) in Victoria, on the better management of effluent on dairy farms. Dairy Food Safety Victoria now has six active MoUs, all aimed at strengthening partnerships with key stakeholders for the benefit of public health, the economic development of Victoria and the reduction of regulatory burden.372

7.85 Mr Ron Paynter, a dairy farmer near Warragul, told the Committee that his one audit covers his dairy, Environmental Protection Authority and meat supplier requirements:

If you go through and do purely a dairy food safety audit, in fact you have probably answered about 80 or 90 per cent of the questions that would be there if you were doing a meat audit anyway. The EPA component of the dairy audit is essentially maybe half a dozen questions, and often it is really just as you are walking around the dairy. You walk out with the auditor, and they have a quick glance at the system you are using for dealing with effluent, and they may make some recommendations. They will make a few notes, and there is not a lot of pain involved with that.373

7.86 The Committee is also aware of Murray Goulburn’s new ‘Farmcare’ program, a multi‐audit program designed to manage compliance in four areas:

Food safety Environmental management Livestock management Human resources.374

7.87 The establishment of a system of single on farm audits includes complex elements to be resolved through ongoing negotiation between industry and the regulator, such as:

Privacy issues regarding the dissemination of information collected from businesses

The need to establish agreements between the regulator and manufacturers The need for auditors to have a range of expertise relevant to different bodies Possible issues around shifting regulatory burden to manufacturers.375

7.88 The Committee is aware that this remains an ongoing area of discussion within the dairy industry and that Dairy Food Safety Victoria is working with manufacturers,

372 Dairy Food Safety Victoria, Annual Report 2011–12, Dairy Food Safety Victoria, Melbourne, 2012. Dairy Food Safety

Victoria also lists as a Core Strategic Outcome: ‘Maximise value from a single system approach’. 373 Mr Ron Paynter above n 321. 374 ‘New food safety audit system cuts costs’, Australian Dairy Farmer, 1 December 2012. 375 The final point was made in the submission to the Committee from Fonterra. Fonterra above n 368.



farmers and industry bodies towards a reduction of auditing on farms. As such the Committee does not believe a recommendation is required but that measures which lead to such a reduction should continue to be pursued.


Horticulture

KEY MESSAGES

The horticulture industry currently refers to food safety guidelines for fresh produce developed by Commonwealth and state agencies as well as private sector standards.

Horticulture demonstrates the efficacy of self‐regulation for low risk industries.

Horticulture does not represent a significant risk to food safety in Australia.

It is not necessary to regulate the industry through Primary Production and Processing Standards.

Introduction of a national Product Identification Code (PIC) number would be beneficial for the horticulture industry.

Small business should be consulted before any new regulatory or other changes are introduced.

Seed sprouts are regulated by Primary Production and Processing Standard 4.2.6.

FSANZ has no plan to regulate animal feed as animal feed is not classified as food.

“I do not want two layers of regulation, being regulated by the state or the federal [government] and then self‐regulated by the industry.” Mr William Bulmer, Lindenow

8.1 This chapter discusses horticulture in Victoria in light of proposals to introduce a national Primary Production and Processing Standard covering the sector.

8.2 The Victorian Government has expressed concern about the approach taken by FSANZ in devising a national standard for seed sprouts, as well as FSANZ’s proposed



national standard for the horticulture sector. The Committee discusses these two standards in the context of risk‐based regulation.

8.3 This chapter also contains a short discussion on the issue of regulating animal feed.

8.4 In Australia the horticulture industry is currently not covered by national Primary Production and Processing Standards.

8.5 FSANZ is working on a Primary Production and Processing Proposal for horticulture, including fruit, vegetables and nuts (Proposal P1015). The Proposal focuses on primary production activities from on‐farm activities through to wholesale, retail and processing such as washing and trimming. Other processing activities such as peeling, cutting, slicing and shredding are already covered by Chapter 3 of the Food Standards Code.

8.6 There are food safety guidelines currently available to the fresh produce sector produced by Commonwealth and state agencies, such as:

Department of Agriculture, Fisheries and Forestry’s ‘Guidelines for on‐farm food safety for fresh produce’376 and ‘Guidelines for Implementing EUREPGAP for Australian Fresh Fruit and Vegetable Producers 2004’377

The Western Australia Department of Agriculture ‘Guidelines for the management of microbial food safety in fruit packing houses’378

Victorian Department of Natural Resources and Environment ‘Safe vegetable production, microbial food safety guide’.379

8.7 Following discussions with industry representatives during this Inquiry the Committee believes that horticulture does not present a significant risk to food safety in Australia. This is a view shared by many in the sector in Victoria and in other states. In its submission to FSANZ regarding Proposal P1015 the Victorian Department of Primary Industries argued that although small growers may present some risk it is hard to determine just how significant this risk is.

8.8 Furthermore as the Department of Primary Industries points out, most of the horticulture industry is already covered by private sector assurance programs:

It is important to avoid unnecessary duplication where existing assurance, regulation or other arrangements can provide effective management of food safety risks … Overall, the small number of recorded incidents, and other relevant information such as food recall data, suggests that food safety risks in fresh horticultural produce are currently well managed.380

8.9 South Australian government representatives shared this view (see below 8.23).

8.10 In Bairnsdale, Mr William Bulmer from the East Gippsland Food Cluster stated that the majority of horticulture businesses operate to a high level and that any

376 See: www.daff.gov.au/__data/assets/pdf_file/0003/183171/guidelines_onfarm_food_safety_fresh_produce_2004.pdf. 377 See: www.daff.gov.au/agriculture‐food/food/publications/eurepgap. 378 See: www.agric.wa.gov.au/objtwr/imported_assets/content/hort/fn/pw/bull4567.pdf. 379 See: www.vgavic.org.au/research_and_development/Researchers_PDFs/vg98093_safe_vegetable_production_.htm. 380 Victorian Government, Submission, Number 45, 17 September 2012.

Chapter eight: Horticulture


improvement to food safety could be better achieved by directing efforts to targeting the growers who are currently “falling through the net”:

The people who are complying with the rules and regulations follow a fairly stringent and strong practice ... the basis of what we are talking about here is not the 75 per cent of people who are really complying, it is that bottom layer of 25 per cent of people who are falling through the net and who could be detrimental to the industry and to the people in the community.381

8.11 Mr Bulmer added that in his opinion an alternative measure, a national Property Identification Code (PIC) number would be the best way of ensuring consistently high standards across the horticulture industry because:

Traceability of all produce would be guaranteed, even for produce crossing state borders382

Markets and supermarkets could refuse to take produce without a PIC number, thus weeding out the poor operators

It would not impose an onerous burden on the industry.383

8.12 Another argument supporting the introduction of a national PIC number for the horticulture industry is the high standards that growers already meet when supplying supermarkets. In his submission to this Inquiry, Mr David McKerrell provided the Committee with the certification requirements for Woolworths, Coles and Aldi, as listed in the table below:

381 Mr William Bulmer, Member, East Gippsland Food Cluster, Public Hearing, Bairnsdale, 17 October 2012. 382 The importance of traceability and food safety can be found in the recent case involving cheap ‘beef’ burgers in the

United Kingdom being found to contain equine DNA. The burgers had been processed in Ireland using material sourced from the Netherlands and Spain. See: www.guardian.co.uk/environment/2013/jan/17/horse‐dna‐burger‐additives.

383 Mr William Bulmer, above n 381. The idea of a PIC number was also supported by Cr Michael Freshwater, Councillor, East Gippsland Shire Council, Public Hearing, Bairnsdale, 17 October 2012.



Table 5: Supermarket certification requirements for the horticulture industry384

Supermarket Direct supply Known indirect supply

Unknown indirect supply

Woolworths 1. WQA 2. HACCP /

SQF1000 / Freshcare 3

1. WQA1 2. HACCP /

SQF1000 / Freshcare 31

1. HACCP / SQF1000 / Freshcare 3

Coles 1. SQF1000 / SQF2000 / Freshcare 3

2. Coles requirements

1. SQF1000 / SQF2000 / Freshcare 3

2. Coles requirements

1. SQF1000 / SQF2000 / Freshcare 3 / HACCP

Aldi 1. A GFSI certified standard



8.13 The Committee spoke with Mr McKerrell at its public hearing in Bairnsdale, during which Mr McKerrell advised the Committee that Woolworths audits on a six monthly basis, with Coles and Aldi conducting their audits annually.385

8.14 Mr McKerrell added that were the Victorian Government required to introduce food safety legislation covering horticulture it should work closely with the Freshcare industry‐owned on‐farm assurance program.386

8.15 Mr McKerrell said:

… there are very good growing and packing systems, like the Freshcare one, which is an industry‐owned code of practice that most of the Australian growers and packers work under. It is a very good system and they can build specific industry programs. They have built an environmental program. They have built a winery program and one for viticulture. They are currently structuring one to meet the Global Food Standards Initiative, covering export stuff ...

Also, the way that they actually deliver their programs is through training; you must have farmer training to pick up their compliance. They provide the training and as part of that training they have a fully templated system, which saves the farmers a lot of work in having to develop their own structures.387

8.16 Regarding horticulture the Victorian Auditor‐General’s Office said:

384 Source: McFresh Vegetables, Submission, Number 53, 15 October 2012. 385 Mr David McKerrell, Member, East Gippsland Food Cluster, Public Hearing, Bairnsdale, 17 October 2012. 386 See: www.freshcare.com.au. 387 Mr David McKerrell, above n 385.



VAGO believes that this model of relying on industry self‐regulation is a reasonable approach at this time given that nationally, food safety risks for these products is low to medium. In addition, both state and national product testing and foodborne illness data have indicated low risks, and there was only one recall of Victorian products from these industries between January 2010 and August 2011.388

8.17 The Committee believes that there is no compelling need to introduce further regulation into the horticulture sector, in particular because of the coverage already provided by private sector standards. The Committee does support the introduction of a national PIC number for the horticulture industry. However, it believes that industry itself needs to own and promote the idea, ideally through bodies such as Ausveg and Horticulture Australia.

8.18 The Committee believes that if a national standard on horticulture production is introduced responsibility for its implementation should rest with the Department of Primary Industries. Ideally, this should be under a code of practice developed in consultation with industry.389 The Committee believes that the model used by the Department to regulate eggs, which does not requires producers to be licensed or pay a fee, should be considered as a model for the horticulture sector.390

8.19 The Committee bases its belief on the fact that discussion around legislation should always consider both whether governments should regulate as well as how they regulate.

8.20 If the Victorian Government does believe that legislation is required to manage food safety risks in the horticulture industry, the Committee notes the requirement to consult small businesses, either as part of a Business Impact Assessment (for primary legislation) or a Regulatory Impact Statement (for subordinate legislation).391

RECOMMENDATION 11

That the Minister for Agriculture and Food Security lobby FSANZ not to introduce Primary Production and Processing Standards for the horticulture sector.

RECOMMENDATION 12

That the Minister for Agriculture and Food Security work with the Standing Council on Primary Industries to introduce a national Product Identification Code (PIC) number for the horticulture industry in place of increasing regulatory requirements.

388 Victorian Auditor‐General’s Office, Agricultural Food Safety, Victorian Government, Melbourne, 2012, p 12. 389 The Committee notes that DPI acknowledges the importance of traceability in ensuring the safety of seed sprouts. See:

‘Submission to Food Standards Australia New Zealand Proposal P1004 – Second Assessment Report – Primary Production and Processing Standard for Seed Sprouts (Australia Only)’.

390 For more information see: www.dpi.vic.gov.au/agriculture/animals‐and‐livestock/Poultry/poultry‐legislation‐regulations‐and‐standards/introduction‐of‐a‐national‐food‐standard‐for‐eggs.

391 Department of Treasury and Finance, Victorian Guide to Regulation, [Edition 2.1], Victorian Government, Melbourne, 2011.



OTHER JURISDICTIONS

8.21 In New Zealand, all businesses growing, processing or selling plant products as food must comply with the Food Act 1981, including Standards for Maximum Residue Limits.392 Ms Kathryn Lockyer from JAS‐ANZ told the Committee that food safety programs increase in complexity as risk increases:

At the moment they have a food safety criteria and it is very simple. It is all based around HACCP, so if people actually did it in line with that, it would be quite a simple document, but because the processes around some of the food become more complex then the actual programs become more complex. So fresh fruit and produce is relatively straightforward, but –

Mr HOWARD — It depends on the risk.

Ms LOCKYER — But if you look at it from a HACCP perspective, what are your control points? What are the key issues around that? And some of the key ones would probably be around your pesticides and those sorts of things.

Mr KATOS — So, for example, if you were canning those fruit and vegetables, you would go into another program, completely separate?

Ms LOCKYER — Exactly, because then you are talking about heat treatment, thermalisation, all those sorts of things, and under controls around that the measures and the factors and the calibrations – it goes on and on.393

8.22 Around 80 per cent of growers in New Zealand also participate in the New Zealand GAP (Good Agricultural Practice) quality assurance scheme.394

8.23 In South Australia, the Committee spoke with Mr Geoff Raven, Manager Food and Plant Standards, Department of Primary Industries and Regions South Australia. Mr Raven told the Committee that South Australia already has a PIC number in place for the horticulture industry. Mr Raven said that the level of risk presented by the industry does not warrant the introduction of a national standard, with increasing industry awareness and education his preferred approach. Mr Raven argued that in his view the proposed national standard will not pass the Commonwealth Office of Best Practice Regulation’s cost‐benefit analysis.395

392 See: www.foodsafety.govt.nz/industry/sectors/plant‐products/selling. 393 Ms Kathryn Lockyer, Manager Accreditation Services Domestic, JAS‐ANZ, Public Hearing, Melbourne, 22 October 2012. 394 See: www.newzealandgap.co.nz. 395 Mr Geoff Raven, Manager Food and Plant Standards, Department of Primary Industries and Regions, Consultation,

South Australia, 1 November 2012.



SEED SPROUTS

8.24 FSANZ has developed a Primary Production and Processing Standard for seed sprouts (Standard 4.2.6). Seed sprouts are a germinated form of seeds and beans, such as alfalfa sprouts, onion sprouts, radish sprouts and mung bean sprouts. They are eaten either raw or cooked. Food Standard 4.2.6 was ‘made’ on 5 January 2012 and commences on 12 July 2013.

8.25 Standard 4.2.6 is very general, with the relevant extracts being:

5 General food safety management requirements

A sprout processor must comply with the general food safety management requirements.

6 Receiving seed

A sprout processor must not produce or process seed sprouts if the processor ought reasonably know or suspect that the seed is of a nature or in a condition that would make the seed sprouts unacceptable.

7 Inputs

A sprout processor must take all reasonable measures to ensure inputs do not make the seed sprouts unacceptable.

8 Decontamination

A sprout processor must implement effective decontamination processes prior to sale or supply of seed sprouts.

9 Traceability

A sprout processor must have a system to identify –

a. from whom seed or seed sprouts were received;

b. to whom seed or seed sprouts were supplied.

10 Sale or supply

A sprout processor must not sell or supply seed sprouts for human consumption if the sprout processor ought reasonably know or reasonably suspect that the seed sprouts are unacceptable.

8.26 As discussed in Chapter 2, small businesses, although supportive of an outcomes based system, expressed a wish for more comprehensive guidance on definitions of terms such as ‘unacceptable’ and ‘all reasonable measures’, as quoted above.

8.27 In its submission to this Inquiry, the Victorian Government included the Department of Primary Industry’s ‘Submission to Food Standards Australia New Zealand Proposal P1004 – Second Assessment Report – Primary Production and Processing Standard for Seed Sprouts (Australia Only)’.

8.28 In its submission to FSANZ, the Department of Primary Industries identified the risk associated with seed sprouts – the sprouting process is well suited to microbiological



growth; and sprouts are generally eaten raw – and therefore agreed with assessing the need for regulation. However, it concluded that:

Evidence does not suggest that sprouts currently present an unacceptable level of risk in Australia

The proposed regulation is not commensurate with the level of risk that does exist; that is, the burden imposed on the sector would outweigh any benefits

Some costs were not included in the Regulation Impact Statement Health cost savings were overestimated.396

8.29 The Committee acknowledges that the ‘Guidelines for Australian and New Zealand Sprout Producers’ developed by the Australia and New Zealand Sprouters Association (ANZSA) was not as widely taken up as hoped and understands the industry’s concern about protecting its reputation. Regardless, the Committee agrees with the Department of Primary Industry’s recommendation to FSANZ:

The DPI suggests that there is an opportunity for government, led by FSANZ, to work with ANZSA to develop an additional set of guidelines that draw from the current industry guidelines and the draft Standard to provide a flexible, risk‐based approach to manage public health risks associated with sprout production. This should be accompanied by an education initiative that would communicate the benefits of complying with the guidelines to those sections of the sprout industry that are currently the cause for concern to ANZSA.397

8.30 It added that had its recommendation been accepted it may have provided ‘… a model to trial to help inform the future development of a horticulture standard where similar issues are likely to be encountered’.398

8.31 The Committee notes the following FSANZ wording with some concern: ‘In recent years, outbreaks of food‐borne illness both in Australia and overseas have been associated with eating seed sprouts. Contaminated seed sprouts present an unacceptable health risk to consumers.’399

8.32 The Committee believes that two elements of this statement must be questioned:

Comparisons between Australia and other countries should be made with caution, for reasons such as Australia’s shorter supply chain and generally better water quality

Anything ‘contaminated’ poses a risk to the public.

8.33 The Committee does acknowledge the FSANZ statement that the Standard was developed in accordance with COAG’s principles of best practice regulation.

396 Submission to FSANZ Proposal P1004 Second Assessment Report, Primary Production and Processing Standards for

Seed Sprouts (Australia Only), Department of Primary Industries, Victoria. In: Victorian Government, Submission, Number 45, 17 September 2012.

397 Ibid. 398 Ibid. 399 See: www.foodstandards.gov.au/foodstandards/primaryproductionprocessingstandardsaustraliaonly/seedsprouts.cfm.



8.34 Based on evidence and advice received during the Inquiry the Committee believes that the Victorian Department of Primary Industry is best placed to administer this sector.

ANIMAL FEED

8.35 This section discusses the animal feed industry in light of a submission and evidence received from stockfeed producer Ridley AgriProducts.

8.36 Ridley AgriProducts believes that the food supply chain includes not just primary producers but also the animal feed industry. It points out that in Europe animal feed has been linked with Bovine Spongiform Encephalopathy (BSE) and dioxin outbreaks, while in Australia lead from animal feed has been found in pig meat. Ridley AgriProducts has also detected medication cross‐transference incidents through its own testing regime.

8.37 Ridley AgriProducts’ accreditation includes:

FeedSafe (Stockfeed Manufacturers Council of Australia code of good practice) HACCP plans ISO9000.400

8.38 The Committee spoke with Mr Robert Parkes, Ridley AgriProducts’ General Manager Quality and Technical, at a public hearing in Melbourne. Mr Parkes told the Committee that there is a need for a national standard on animal feed, to replace the current state‐by‐state approach:

One of those gaps is the fact that there has been some discussion and debate for many years at a federal level on a national feeding standard. I represent the technical animal nutrition and regulatory side of my business. At this point in time there are no fundamental regulations that I can look at in Australia that hinge on what I can and cannot do with animal feed necessarily from a residue level point of view, so from dioxin and all those types of things. There is definitely legislation around the BSE or the RAM – the restricted animal material – so fundamentally I have to look at places like Europe, where there are these guidelines. I will reference back to the European guidelines for things as simple as things like mycotoxins, heavy metals or these types of things. In Australia, the various states have some regulations in place, like Queensland will have something, Victoria will have something and New South Wales, but there is no consolidated approach.401

8.39 At this point in time a national standard would not fit into FSANZ’s remit, as animal feed is not considered a food.402

400 Ridley AgriProducts, Submission, Number 25, 3 September 2012. 401 Mr Robert Parkes, General Manager, Ridley AgriProducts, Public Hearing, Melbourne, 12 November 2012. 402 Personal Communication, Ms Cathie Humphries, Standards Management Officer, FSANZ, 18 January 2013.



8.40 According to Mr Parkes, one issue the national standard should decide on should be the maximum acceptable residue levels of medicines in feed stock:

One of the problems is that in Australia we use a whole heap of registered medicinal additives through the APVMA [Australian Pesticide and Veterinary Medicine Authority]. In some cases they only have what we call an MRL – a maximum residue level – for the species that that particular product is registered for. They do not have MRLs for non‐target species. That makes it very difficult to then use that medicinal product or additive in a feed mill where you are making multiple species of feed.

For people who manufacture feed on farm or in a small feed mill for their own purpose that is not so much an of issue, but for the feed industry where you have feed mills that could manufacture feed for four or five different species it does become a concern. It is a concern for Victorian feed mills as well, in our eyes. We believe there is a gap there which the APVMA really needs to look to close. It is something again on which we would seek some support through this type of committee. If you are going to have a feed additive registered for animal feed use, whether it be medicinal or not it should have an MRL for basically every species of animal that supplies food through to the food supply chain.403

8.41 Mr Parkes also called for the registration of all animal feed manufacturers:

… anybody can start making and selling feed today. You can have anybody in any one of your electorates out in the back shed making feed and they can sell that into the food supply chain without any scrutiny at all. Industry has programs in place like FeedSafe for the stockfeed industry in Australia. If you are not a member of the Stock Feed Manufacturers Council, you do not have to have FeedSafe. All the regulatory groups, including in Victoria, reference FeedSafe. They look at FeedSafe and make sure that they understand what FeedSafe does. Again, anybody can start making feed without any duress at all.

We would like to make a recommendation and it is something that we have mentioned in a number of submissions. We are not talking about an onerous regulatory process, but something similar in effect to your PICs – your property identification numbers. I own property. Every property has got a number. I have had to list the type of animals I have on that property. Could we not use a similar process just to say that if you are going to make feed, for example, on a property, there be a registration process? There are probably in the

403 Mr Robert Parkes, above n 401.



order of 130 feed mills in Australia; in Victoria there are probably only 40 in total. We are not talking about this massive onerous process, but if you are going to be supplying a product to the food supply chain, which overseas and even here in Australia has been shown to contribute to potential food safety risks, we would like there to be consideration of the fact that maybe there should be some process of at least logging it.404

8.42 The Ridley AgriProducts submission states: ‘Not all animal feed manufacturers are members of SFMCA [Stockfeed Manufacturers Council of Australia] and therefore may not have a third party audited quality system implemented. Additionally feed mills (including on farm milling) are currently free to manufacture whatever feed they can sell.’405

8.43 It is hoped that registering animal feed manufacturers would protect the reputation of the whole industry: ‘We are trying to lift the bar to make sure that somebody else does not bring us down. That is our fear.’406

8.44 It is difficult for the Committee to make a recommendation regarding animal feed due to the small amount of evidence it received. However, it agrees that animal feed is part of the food supply chain and is an important issue worthy of further examination by the Victorian Government.

8.45 The Committee notes that several of the standards relating to animal feed have been developed by the Codex Alimentarius Commission. They include standards on:

Reduction of Aflatoxin B1 in Raw Materials and Supplemental Feeding stuffs for Milk‐Producing Animals

Classification of Foods and Animal Feeds Code of Practice for Good Animal Feeding.407

8.46 The Committee is also aware that animal feed is already a component of many on‐farm Quality Assurance programs.

404 Ibid. 405 Ridley AgriProducts, above n 400. 406 Mr Robert Parkes, above n 401. 407 See: www.daff.gov.au/agriculture‐food/codex/committees/animal‐feeding.


Improving regulation

KEY MESSAGES

Food safety and business innovation and growth can coexist and food safety regulators must support both of these government goals.

Much of the compliance burden on industry comes from private sector requirements.

Non‐regulatory approaches to improving food safety should always be employed where it is safe to do so.

The use of earned recognition could be extended in Victoria.

Outcomes‐based approaches require more education of producers than prescriptive approaches.

PrimeSafe and Dairy Food Safety Victoria should embrace an education and advisory role as requested by small business.

A robust system of performance reporting can be used to measure the effectiveness of the regulatory regime in Victoria.

‘What impact has food regulation had on food safety in Victoria? In short, there is no reliable way to estimate the contribution of food regulation to food safety.’ Victorian Competition and Efficiency Commission

9.1 This chapter draws on evidence and advice to the Committee from rural and regional businesses, food production industry bodies, and regulators. This is used to provide advice to the Victorian Government about encouraging innovation and business growth in rural and regional Victoria while maintaining high food safety standards.



9.2 This chapter also looks at best practice in the regulation of food safety.

9.3 The Victorian Government’s submission to this Inquiry argues that Victoria’s good food safety record suggests:

…existing controls are providing a high level of protection of public health and safety for Victorians.

However:

… it could suggest that there are currently regulatory controls in place that place a burden on industry that offer no additional benefits to public health and safety. This is inconsistent with the principle that regulation, and the way that regulation is enforced, should be efficient, effective and be the minimum needed to achieve the outcome sought.408

9.4 The Committee believes that food safety and business innovation and growth can coexist and that food safety regulators must support both of these government goals.

9.5 The Committee acknowledges the difficult challenge of balancing the need to protect public safety while also encouraging innovation and business growth. The Committee believes that both PrimeSafe and Dairy Food Safety Victoria do attempt to address this challenge and take their professional responsibilities seriously.

9.6 For example, PrimeSafe’s ‘Mission’ states: ‘To regulate and advance food safety in the Victorian meat, poultry and seafood industries through a credible, effective and efficient quality assurance system that facilitates opportunities for industry growth and innovation.’409

9.7 Dairy Food Safety Victoria’s Strategic Plan 2012–2015 states: ‘While our central regulatory remit is food safety, other core activities include market access, support for industry training and development, participation in the national food safety regulatory system and implementation of our single system approach.’410

9.8 These two statements make it clear that for the regulators the protection of public health via the production of safe food is the priority. This is as it should be. However, these statements also make clear that this role should be complemented by a commitment to supporting industry development.411 It is also a reminder that government’s overriding role in maintaining food safety for the public is non‐negotiable.

9.9 A recent listeria outbreak in Australia which was traced to a Victorian cheese producer demonstrates that food safety cannot be taken for granted and that the consequences of any breach are severe. The incident demonstrates the importance

408 Victorian Government, Submission, Number 45, 17 September 2012, p 19. 409 See: www.primesafe.vic.gov.au/about‐us/vision‐and‐mission. 410 Dairy Food Safety Victoria, Strategic Plan 2012–2015, Dairy Food Safety Victoria, Melbourne, 2012, p 2. 411 Also see Australian Food and Grocery Council, Submission, Number 42, 11 September 2012, which argues that any

regulatory reform must guarantee food safety as well as lifting regulatory burden from businesses.

Chapter nine: Improving regulation


of established relationships and efficient communication channels between government and industry which can facilitate an early response once a problem has been identified. It also raises the need to ensure that the community is well informed about high risk food, particularly vulnerable people such as the elderly.412

9.10 In the case of Dairy Food Safety Victoria the Committee believes that the regulator has evolved in line with industry expectations and development to embrace a role beyond policing non‐compliance. In the case of the meat sector this is happening less so. The Committee has heard that PrimeSafe has focussed on its ‘policing’ role sometimes to the detriment of industry growth and development, particularly with regard to small business.

9.11 From the evidence heard throughout this Inquiry, the Committee does not believe that, aside from some particular instances, food businesses in Victoria are over‐regulated. The exceptions are:

Poultry Yabbies Live seafood.

9.12 The Committee further concludes that it is the often onerous demands of and duplication caused by private sector requirements that are burdensome to the food production industry. However, government influence over these requirements is limited. This is the conclusion that was reached in Chapter 4.

BEST PRACTICE LEGISLATION

9.13 There is a great deal of research and discussion surrounding best practice principles that should inform the development of all legislation. For example, the Victorian Competition and Efficiency Commission provides a useful summary, including:

Regulations should be understandable and introduced only after proper consultation

Regulatory effort should be the minimum necessary given the scale of the problem

Regulations should not be unduly prescriptive Regulations and their administration should be consistent with other

regulations Regulations should be enforceable There should be processes for the continual improvement of regulation Regulators should be accountable.413

9.14 Similar principles are contained in the Victorian Guide to Regulation, regularly updated by the Department of Treasury and Finance. The Guide is heavily focused on

412 Personal Communication, Margaret Darton, Manager Food Policy, Agriculture and Food Industries Policy, Department of

Primary Industries, 11 February 2013; ‘More illness cases linked to soft cheese products’, Department of Health, 18 January 2013.

413 Victorian Competition and Efficiency Commission, Regulation and Regional Victoria: Challenges and opportunities, Victorian Competition and Efficiency Commission, Melbourne, 2005.



purely economic discussions, such as allocation of goods and services and production efficiencies. However particularly relevant to this Inquiry is the acknowledgement that government intervention in markets is justified in cases of:

Consumers having insufficient or inadequate information (also referred to as ‘information asymmetries’) – such as on food production techniques or additives

Managing public risk – such as safe food.414

9.15 The evidence received during this Inquiry shows that Dairy Food Safety Victoria, PrimeSafe and the Department of Primary Industries have a very good understanding of these principles.

9.16 The Committee is concerned that at a federal level FSANZ does not always adhere to these principles, especially those relating to risk assessment and risk management. The example of the need for a national poultry standard (4.2.2) is particularly relevant here, as discussed in this report at 4.87.

9.17 The Committee believes that it is important for state government to continue to work with FSANZ to ensure best practice principles are adhered to when developing national standards. The Victorian Government’s submission to this Inquiry indicates an awareness of the need for a proactive approach with FSANZ.

RECOMMENDATION 13

9.18 Throughout this Inquiry the Committee remained open to hearing specific examples of where legislation could be replaced by Codes of Practice415 or co‐regulation and encouraged witnesses to provide evidence on that basis. The strongest evidence it heard concerned the national poultry standards; the call for recognition of private Quality Assurance standards (both discussed in Chapter 4); and changes in the seafood sector (Chapter 6).

414 Department of Treasury and Finance, Victorian Guide to Regulation, [Edition 2.1], Victorian Government, Melbourne,

2011. 415 The regulators are given the authority to implement Codes of Practice in the three relevant Acts.

That the Minister for Agriculture and Food Security take the key messages to FSANZ:

That a high standard of evidence and risk‐based analysis is used in its consideration of further Primary Production and Processing Standards

That non‐regulatory approaches to improving food safety should be employed, where it is safe to do so, before considering additional legislation.



MESSAGE FOR GOVERNMENT

9.19 The Victorian Guide to Regulation states that:

… government should not resort to explicit regulation unless it has clear, continuing evidence that:

A problem exists;

Government action is justified; and

Regulation (i.e. in the form of primary or subordinate legislation) is the best option available to government, and the regulatory model chosen is best able to deal with this concern in the most effective and efficient manner.416

9.20 The challenge for the Committee, and the Victorian Government, is two‐fold. Firstly, food regulation exists in a different sphere to most regulation. In the case of this Inquiry, the first two points above are removed from the equation by the fact that national food standards are decided at a federal level (albeit with inputs from the states).

9.21 The final point then becomes particularly relevant because the Victorian Government retains the power to decide its response to national food standards, in the form of the four relevant Acts (including the Food Act 1984). However, the commitment to the principle of minimum necessary regulation must always be a complement to the primary commitment to food safety.

9.22 It is important for governments to consider alternatives to regulation where possible, such as:

Self‐regulation: voluntary codes of practice or standards are developed by industry, with industry also responsible for enforcement

Quasi‐regulation: governments influence businesses to comply, but without explicit government regulation

Co‐regulation: industry and government develop regulation in partnership.417

9.23 It is not the intention of the Committee to add to the broad body of research on best practice legislation, beyond encouraging the state government to adhere to these principles when determining its response to impending national standards around horticulture and meat. In the case of food safety legislation the Victorian Government should only write new legislation if it:

Can explain why existing legislation is not sufficient Is based on an adequate risk analysis Quantifies the financial cost and benefit of the proposed legislation.418

416 Department of Treasury and Finance, above n 414, 18. 417 Ibid. 418 Banks G, ‘Reducing the regulatory burden: the way forward’, Speech, Taskforce on Reducing the Regulatory Burden on

Business, Monash Centre for Regulatory Studies, 17 May 2006.



9.24 Regarding the proposed national standards for meat, Mr Frank Herd recommended that Victoria should simply refer to the standards rather than draft new legislation (akin to a ‘quasi‐regulation’ approach as discussed in 9.22):

Referring to the national standards seems to us to be a more practical approach. Standards with a national framework – unless you blokes are going to change federation; we have got problems with that as well – as the previous speaker said, can be difficult. But clearly working through that national framework as far as standards go and having the legislation refer back to standards rather than having it set in legislation is certainly our preference.419

9.25 Mr Herd’s comments remind us that the Victoria Government and the regulators can expect businesses to refer to Commonwealth legislation and that it is not always necessary to add a layer of State level legislation.

AN EDUCATION AND ADVISORY ROLE

‘A food safety regulation body who does not support businesses and farmers in difficult situations and provide appropriate guidance and advice is not one who focuses on small businesses or the community at large.’ Community Support for L E Giles and Sons

‘In cases where producers and processors lack any awareness of their obligations, the business (and other parts of the sector) may be exposed to financial and reputational risks associated with non‐compliance.’ Victorian Government

9.26 This section discusses the role of regulators in providing education and advice to businesses.

9.27 For some businesses the broad nature of outcomes‐based legislation can pose problems.

9.28 In its Annual Report 2011–12, the Victorian Competition and Efficiency Commission states: ‘Outcomes‐based approaches to regulation offer flexibility in how businesses comply but can create uncertainty if regulators are unwilling, reluctant or unable to provide authoritative advice on whether proposed activities comply.’420

9.29 It adds: ‘Lack of advice from regulators can increase uncertainty and costs, especially for small businesses.’ 421

9.30 In a discussion on risk management plans the Victorian Guide to Regulation states that this flexibility ‘… is often cited as a problem for those being regulated as it can

419 Mr Frank Herd, Chairman, Australian Meat Industry Council, Public Hearing, Melbourne, 12 November 2012. 420 Victorian Competition and Efficiency Commission, Annual Report 2011–12, Victorian Competition and Efficiency

Commission, Melbourne, 2012, p 4. 421 Ibid, p 12.



lead to uncertainty as to whether the actions they undertake are sufficient to satisfy the standards set by the regulations’.422

9.31 The evidence that the Committee heard on the issue of education is not straightforward because of the differing attitudes of the regulators and industry. The regulators were clear that they require businesses to prove their competency; yet some businesses require a closer approach to aid development of their knowledge base.

9.32 Many in the primary production and processing industry expect PrimeSafe and Dairy Food Safety Victoria to play an education or advisory role, to complement their ‘policing’ role. This was something that the Committee heard many times over during its public hearings throughout rural and regional Victoria, especially from small businesses.

9.33 For example, the Victorian Farmers’ Market Association, which represents around 1,000 small food producing businesses, argues that the regulators should provide ‘… consistent advice on regulations and their implementation’.423 Rose Dairy Company, a milk supply company based in East Gippsland, advises that education should be expressed in language that is easily understood by industry; that is, it should avoid or at least explain regulatory jargon as much as possible.424

9.34 The Victorian Competition and Efficiency Commission found that educating food businesses can reduce the need for regulation. Its Simplifying the Menu report states that some small or new businesses may not understand the regulations or may not have the financial ability to meet the regulations. There is a role for government and government agencies to assist these businesses – often through Codes of Practice and other forms of education and advice – in choosing, handling, storing and preparing food correctly.425

9.35 In its submission to this Inquiry, the Victorian Government suggests that the regulators may need to develop formal guidelines to ensure businesses understand their food safety requirements. The Victorian Government also suggests that, as with the cost burden of food safety regulation, understanding the requirements can prove particularly challenging for small businesses ‘… that do not have the capability, expertise or resources necessary to achieve food safety outcomes unless they are also provided with sufficient guidance on how to comply’.426 As well, the City of Greater Geelong states that in its experience small businesses report that the regulators ‘… provide little advice and guidance …’ whereas local government takes what it describes as a more ‘substantive education approach’.427

422 Department of Treasury and Finance, above n 414, 26. 423 Victorian Farmers’ Markers Association, Submission, Number 23, 3 September 2012, p 5. 424 Rose Dairy Company, Submission, Number 51, 22 October 2012. 425 Victorian Competition and Efficiency Commission, Simplifying the Menu: Food regulation in Victoria, Victorian

Competition and Efficiency Commission, Melbourne, 2007. 426 Victorian Government, above n 408, 21. A similar argument is found in Victorian Competition and Efficiency

Commission, above n 420. 427 City of Greater Geelong, Submission, Number 49, 4 October 2012.



9.36 Mr Kevin Cottrill, Chief Executive Officer of the Australian Meat Industry Council, agreed that small businesses, such as butchers, may find it harder to understand the complexities of food safety programs than better resourced big businesses:

AMIC has had a fair bit of experience in dealing with audit reports and dealing with individuals, and I think it is fair to say that in the larger end of businesses where you have a food safety officer – a fully trained person – a quality assurance manager … you have got a lot of knowledge. But people running smaller businesses – the average butcher shop only employs two and a half people – the smaller end of business in a lot of cases do not really understand what is involved behind their food safety plan. So if it goes wrong or they are not utilising the information to run their business better, they tend to start asking: ‘Why do I have to do all of this? What is the problem here?’.428

9.37 Mr Cottrill added that industry must share in the responsibility of educating businesses to understand not just their food safety requirements but the reasoning behind the regulators’ expectations:

AMIC’s position is that you would probably get a better food safety outcome if people operating those businesses had better training. Obviously AMIC can do so much, but at the end of the day I think there are benefits that would come, and you would get a higher level of compliance and you would get a safer product.429

9.38 This position received support from Mr Brian Casey, Chief Executive, PrimeSafe, albeit with the proviso that regulators should remain independent of the training process:

I think, for what it is worth, that more industry training is a great thing for governments to get involved in and a great space for governments to be in. I do not think that the regulator should take responsibility for the training, because the danger is you then become part of the problem. As an organisation we think training is much better delivered by industry. We are very supportive, for example in the meat space, of the Australian Meat Industry Council and their work in that regard.430

9.39 In the dairy industry, Ms Kerry Callow from United Dairyfarmers of Victoria agreed that education is a dual responsibility shared between industry and the regulators. Ms Callow said: “I suspect that for Dairy Food Safety Victoria to get wholly into the space by itself on education, it may well be duplicating work that is already being

428 Mr Kevin Cottrill, Chief Executive Officer, Australian Meat Industry Council, Public Hearing, Melbourne, 12 November

2012. 429 Ibid. 430 Mr Brian Casey, Chief Executive, PrimeSafe, Public Hearing, Melbourne, 20 November 2012.



done by the industry, and I would encourage partnerships rather than duplication.”431

9.40 A similar argument was made by Fonterra’s Ms Carol Bate, who suggested such partnerships could be comprised of Dairy Food Safety Victoria and a dairy company’s field officers. Ms Bate agreed that education is a necessary component of the more flexible and less prescriptive outcomes‐based approach that defines food safety regulation in Australia: “Once you move away from less prescription into an outcomes‐based system, you do tend to find that you have to educate people and keep bringing them up to an understanding.”432

9.41 Including local government in ‘education partnerships’ would reflect their food safety role.

9.42 The idea of what constitutes an education role, however, is a subjective one: for some businesses education is simply a matter of being told where information on regulatory requirements can be found; others prefer to be told exactly how to complete their food safety program. The Committee believes that the regulators should not be expected to assist businesses with development of new products but rather with how to do so safely. The Committee heard that Dairy Food Safety Victoria achieves this balance well and is responsive to businesses who wish to develop and innovate.

9.43 The Victorian Auditor‐General’s Office found that Dairy Food Safety Victoria provides ‘… information, education, training and advice to individual businesses and industry associations’.433 Dairy Food Safety Victoria requires its licencees to prove their competency via their understanding of food safety regulation. However, as Dr Hollywell told the Committee, Dairy Food Safety Victoria is still committed to helping new businesses reach this understanding:

… you can go into a small business that is establishing and they could have a fantastic background. They can be highly competent, they can be very, very skilled. They may have run similar businesses elsewhere. You will have an interaction with them about what they need to put in place in terms of their HACCP plan, and they understand it and they get it immediately and it is a very smooth, streamlined process. You can have others who really struggle with the concept, struggle with recording, struggle with understanding how to keep records or data management or even track product. We would spend a great deal of time with those individuals, but we will not tell them how to do it because the competency of an individual in understanding the program they are building gives you confidence that they will be able to run it when they have built it. If we tell them how to do it and give them a template and say, ‘This is how you need to run your business’,

431 Ms Kerry Callow, President, United Dairyfarmers of Victoria, Public Hearing, Melbourne, 22 October 2012. 432 Ms Carol Bate, Regulatory Manager, Fonterra, Public Hearing, Melbourne, 22 October 2012. 433 Victorian Auditor‐General’s Office, Agricultural Food Safety, Victorian Government, Melbourne, 2012, p 15.



invariably they will have difficulty in meeting those requirements when the business is up and running.434

9.44 Dairy Food Safety Victoria has also established a business unit in the organisation to help licensees make well‐informed risk‐based decisions following cases of non‐compliance.435 Other education programs include:

The National Auditor Working Group Residues Management Forum Dairy Food Safety Victoria / Environmental Protection Agency Memorandum of

Understanding Working Group.436

9.45 The evidence received from witnesses, including small businesses, regarding Dairy Food Safety Victoria’s approach to providing advice was overwhelmingly positive. In Camperdown, Ms Michelle Hill, Quality Assurance Manager, Warrnambool Cheese and Butter said that Dairy Food Safety Victoria is a “fantastic educator”. Ms Hill was particularly complimentary of its contribution to industry forums, as well as its commitment to helping new businesses understand their food safety programs:

We have an industry forum around every three months. They come out to Camperdown and all the quality managers and food safety staff attend. We will sit down and there will be a set agenda, but you are also allowed to participate in any points of issue that are presented by each of the factories. They will bring CSIRO representatives to those meetings to talk about developments in microtesting and analysis. They may bring in consultants who are viewed to be doing good things within industry – cleaning, optimal cleaning, routines and these sorts of things. In the last five years there seems to have been a big focus on that education program. We also know that the vast majority of their time is spent with the small‐scale manufacturers. They very much focus on education there as a first stop. Rather than letting the horse bolt, they really focus on getting those good food safety programs in place to start with.437

9.46 Also in Camperdown, Mr Simon Schultz complimented the way in which Dairy Food Safety “… gave me knowledge and understanding of why the practices that I had been taught … were applicable to food safety. I felt that was instrumental in establishing my business.”438

9.47 Regarding PrimeSafe, the evidence received as part of this Inquiry suggests a weakness in the level of education provided and its overall approach in this regard.

434 Dr Catherine Hollywell, Chief Executive Officer, Dairy Food Safety Victoria, Public Hearing, Melbourne, 20 November

2012. 435 Dairy Food Safety Victoria, Submission, Number 39, 3 September 2012. 436 Fonterra, Submission, Number 48, 3 October 2012. 437 Ms Michelle Hill, Quality Assurance Manager, Warrnambool Cheese and Butter, Public Hearing, Camperdown, 19

September 2012. 438 Mr Simon Schulz, Owner, Schulz Organic Farms, Public Hearing, Camperdown, 19 September 2012.



9.48 Ms Kristine Milburn, Production Manager at Glenloth, an abattoir in Wycheproof, acknowledged that licensees must prove their competency but still felt that PrimeSafe and its auditors could provide more assistance, especially for businesses in remote locations:

I do not think it is their job to teach the plants, but I think that there can be more help when you do not know which direction to take. When you are presented with a problem – especially in places like ours; we are so isolated – and you do not know who to ask, you are not saying, ‘Tell me what to do. Do I do this or do I do that?’, you are saying, ‘Tell me where can I get help. Who can advise me on this?’.439

9.49 Mr Allen Snaith from Warialda Belted Galloway Beef told the Committee about the lack of help he received from PrimeSafe when trying to understand the regulations covering listeria control during the manufacture of smallgoods. According to Mr Snaith, the only advice he received was a direction to read the regulations:

You can actually learn it in other ways, but as an industry body it was a little disappointing, and the listeria one in particular, because at that stage – and that was six years ago – I did not know anything about microbiology testing. I was a sponge, and they basically said, ‘Read that’, and I waded through pages of it and I thought, ‘No, I can’t do it’.440

9.50 Mr Snaith eventually understood the requirements but only after spending two weeks working alongside a smallgoods manufacturer in Tasmania.

9.51 In the seafood industry, the Committee heard similar complaints about the lack of assistance provided to businesses regarding their food safety programs. Seafood Industry Victoria’s Executive Director, Ms Renee Vajtauer, told the Committee that Seafood Industry Victoria has developed food safety program templates for seafood businesses and believes that PrimeSafe should be doing more to help businesses understand the requirements:

Even with simple things like that, if they call PrimeSafe beforehand there is very little assistance or education with them on how to fill out those forms or what should be included within them. We have noticed that we are taking up a lot of that role, so we are walking them through what they need to include, but I really think that should be the job of the regulator.441

9.52 Mr Casey explained that PrimeSafe does indeed expect its approved auditors to provide advice to licensees:

439 Ms Kristine Milburn, Production Manager, Glenloth, Public Hearing, Castlemaine, 5 September 2012. 440 Mr Allen Snaith, Owner, Warialda Belted Galloway Beef, Public Hearing, Castlemaine, 5 September 2012. 441 Ms Renee Vajtauer, Executive Director, Seafood Industry Victoria, Public Hearing, Melbourne, 12 November 2012.



What we say is: not only can you provide advice but we expect you to provide advice. What you cannot do is separately charge for it, because then you breach your auditing arrangements. We would expect – very much so – that there are a number of parties in this space. The auditors are engaged by the licensee, and the licensee has every reason to say to the auditor, ‘You are going to assess my program. What is it I need to do to comply?’.442

9.53 Mr Marc Barnes, an auditor from NCS International, a PrimeSafe approved auditor, told the Committee that the challenge for auditors is defining the boundary between acting in a helpful advisory role and providing advice that may not be suited to a particular business:

We have to be really careful that we do not advise clients in doing something which could be wrong at the same time. Are we in a capacity to judge whether that is the right path for that particular company, being the third‐party certification body or third‐party auditor? I do not think we are. I do not think the auditors would have the skill set. Are they in a position to be able to not so much suggest but advise the consideration of a particular process or the introduction of a particular system that they have seen successfully implemented in another private place? Yes, and they do. An auditor might see something and say, ‘Look, no, Jack down the road at that cheese factory does it this way. Why don’t you give him a call? Here’s his number. He’ll show you what he does. I think he does it really well’. That is the boundary, I suppose.443

9.54 The Victorian Auditor‐General’s Office found that PrimeSafe’s auditors provide advice to its licensees, however:

… PrimeSafe has determined that, as a regulator, it should not have a direct role in education and nor is it staffed to deliver it. PrimeSafe advised that it seeks to improve education by supporting industry associations and educational bodies to deliver it, but could not demonstrate how it does this.444

9.55 It concluded that although Dairy Food Safety Victoria has demonstrated a ‘strong rationale’ for its approach to educating licensees, PrimeSafe should ‘… similarly document its rationale for not including education as part of its core activities…’.445 The Committee supports this observation.

9.56 Mr Geoff Raven, Manager Food and Plant Standards, Department of Primary Industries and Resources South Australia, told the Committee that the Department

442 Mr Brian Casey, above n 430. 443 Mr Marc Barnes, Manager Food Division, NCS International, Public Hearing, Melbourne, 12 November 2012. 444 Victorian Auditor‐General’s Office, above n 433, 15. 445 Ibid, 16.



delivers workshops and provides advice during audits as well as in cases on non‐compliance.446

EARNED RECOGNITION

“What is my reward for maintaining a great food safety standard and hygiene program? There is not any.” Mr Felix Gamze, Wangaratta

9.57 Earned recognition is a system whereby ‘… regulators officially recognise ongoing achievement of high standards of compliance by regulated businesses through rewarding those businesses with reduced controls such as fewer inspections’.447

9.58 Earned recognition is a risk‐based or outcomes‐based approach to enforcement. It recognises efforts made by individuals and businesses in proving a practical understanding of legal requirements – the history of compliance – and uses third party information to assess risk and therefore the need for governments or government agencies to inspect businesses and premises.

9.59 The basic principles of earned recognition are:

Comprehensive risk assessment Inspections should be done for a reason Data requirements for less risky businesses should be lower than for riskier

businesses Savings of resources should be directed to advice to improve compliance Fewer, simpler forms Coordination of data requirements and the design of forms across

regulators.448

9.60 Earned recognition is a co‐regulatory (essentially self‐regulation with government oversight) approach that can both reduce regulatory burden (‘red tape’) and increase compliance through rewarding excellence.

9.61 In Victoria, food safety risk is judged according to two factors: the processes involved in making a product; and the past behaviour of the business (in terms of meeting compliance). Food safety regulation seeks to match the risk to the level of compliance, to reduce the regulatory burden on businesses in categories deemed low risk.

9.62 Both PrimeSafe and Dairy Food Safety Victoria use risk profiling to determine the frequency of audits or inspections, classify businesses and determine compliance history. For example, PrimeSafe audits all compliant seafood processing facilities once a year, increasing the frequency for those facilities that do not meet the regulatory requirements. An earned recognition system would reward seafood

446 Mr Geoff Raven, Manager Food and Plant Standards, Department of Primary Industries and Regions, Consultation,

South Australia, 1 November 2012. 447 Victorian Government, above n 408, 22. 448 Ibid.



processing facilities with a proven record of compliance by reducing the frequency of audits – the frequency of audits would be based on the behaviour of the facilities as well as the level of risk of the product they are processing.

9.63 It can be argued that earned recognition is currently being practised by regulators in Victoria to a certain extent, in that new businesses are audited often until they can prove their competence, at which time auditing frequency is reduced.

9.64 The regulators have the legal authority to determine the frequency of audits. For example, Section 12A (2) (b) of the Meat Industry Act 1993 states that PrimeSafe can require audits to be carried out on a one‐off basis, annually or ‘at any other specified frequency’.

9.65 It could also be argued that the principles of earned recognition are used for cases of non‐compliance i.e. companies that breach the regulation face an increased number of audits until they prove compliance. Along with recognition for consistently passing audits, earned recognition can apply to cases where businesses meet a different or higher standard; for example, ISO requirements.

9.66 Mr Felix Gamze, a butcher in Wangaratta, told the Committee that the way in which compliant food businesses in New South Wales are rewarded is preferable to the system in Victoria. As a retail butcher shop that manufactures smallgoods Mr Gamze is audited four times a year. Retail butcher shops that do not manufacture smallgoods in Victoria are audited twice a year.

9.67 Mr Gamze said:

I get audited quarterly because of my listeria management plan, which means most other shops in Victoria, if they do not do that, would be audited twice. We who do make and manufacture smallgoods et cetera are audited four times. In New South Wales they will get audited, and if they reach an A category, they then will only be audited once per annum, because they have proven that everything is great, terrific, and this is the reward that you get for running your business in the manner that we would all like to run our businesses in. But in a normal butcher shop situation where there is not any manufacture of those products – in New South Wales, for example – they would have up to a two‐year grace period from audits if they reach an A category.449

9.68 The New South Wales Food Authority uses a national risk profiling tool, the Food Safety Risk Priority, to classify food businesses in New South Wales. There are four possible classification outcomes:

Priority 1 (P1) Priority 2 (P2) Priority 3 (P3) Priority 4 (P4).

449 Mr Felix Gamze, Owner, Felix’s Plaza Meats, Public Hearing, Wangaratta, 22 November 2012.



9.69 Businesses in the P1 tier represent the highest food safety risk, P4 businesses represent the lowest food safety risk. In New South Wales, a retail butcher shop that manufactures smallgoods, such as Mr Gamze’s business, is classified as P1; a retail butcher that does not manufacture smallgoods is classified as P2.450

9.70 Businesses are then rated using a points system:

Rating A: 0–15 points Rating B: 16–31 points Rating C: 32–47 points Rating D: 48–63 points Rating E: 64 points and above.

9.71 The frequency of audits is dependent on the rating a business receives, as the table below shows:

Table 6: NSW Food Authority ratings451

Food Business Rating Priority 1 Priority 2 Rating A 12 months 24 months Rating B 6 months 12 months Rating C 3 months 6 months Rating D Additional audits Additional audits Rating E Additional audits Additional audits

9.72 Therefore, in New South Wales a business such as Mr Gamze’s that received an A Rating would be audited once a year.

9.73 In principal, in this situation described by Mr Gamze, earned recognition is applied in the same way in the two states. The difference lies in the frequency of audits.

9.74 Calls for increased use of earned recognition are not confined to food businesses in Victoria. Speaking generally, the United Kingdom’s Department of Business, Innovation and Skill made the point that many businesses feel that their compliance efforts go unrecognised by regulators:

Businesses have told us that they sometimes feel ‘over‐inspected’ by regulators; and that regulators don’t always take account of the efforts they have made to comply. Many businesses invest considerable time and resources in making sure they do the right thing, developing internal systems, using external checks and achieving a good track record of compliance. They would like this effort to be acknowledged and reflected in the way that enforcement is carried out.452

450 See ‘Priority Classification System, Version 4, 27 April 2010 at:

www.foodauthority.nsw.gov.au/_Documents/science/priority_classification_system.pdf. 451 See: www.foodauthority.nsw.gov.au/industry/audits‐inspections‐compliance/audits‐of‐licensed‐businesses. 452 Department of Business, Innovation and Skills (UK), Transforming Regulatory Enforcement: Freeing up business growth,

[Discussion Paper], United Kingdom Government, London, 2011, p 5.



9.75 In Australia, much of the current research on earned recognition refers to programs in the United Kingdom. Examples of these include the ‘Red Tractor’ assurance scheme and the United Kingdom Environment Agency’s Pig and Poultry Assurance Scheme. These are referred to in the Victorian Government’s submission to this Inquiry.453

9.76 It is clear that the principles of earned recognition as applied in the United Kingdom are well understood by Victorian regulators and have been adopted here. It may be possible to look at them further and extend the application of this approach.

9.77 The Committee believes that earned recognition could also be utilised when businesses identify and fix faults through their own testing process. Mr Julian Benson from Apostle Whey Cheese told the Committee that his testing regime was increased from monthly to fortnightly after a crack developed in his vat, an obvious increase in his business expenses.

9.78 Mr Benson said:

The good thing about the testing, even though everything is pasteurised, is that you still have to send off product for testing to make sure there is no E. coli, salmonella or listeria in the product. This particular time we got it back we immediately realised what was going on because the E. coli reading was so high that it could not just be a simple matter that somebody has made a mistake or had not washed their hands or anything like that. The fact was that we reckoned it had to be the vat.454

9.79 Mr Benson was clear in stating that testing frequency should be increased when new systems are brought into place or faults are identified.

9.80 However, the question remains as to whether regulators could use earned recognition to ‘reward’ businesses when they identify and fix problems with their processes.

9.81 The Victorian Government’s submission to this Inquiry acknowledges that recent reports have found that PrimeSafe and Dairy Food Safety Victoria have been effective in achieving high compliance rates among Victorian food businesses. The submission concludes: ‘Any earned recognition scheme should focus on increasing this good compliance rate and achieving better food safety outcomes.’455

453 Victorian Government, above n 408. 454 Mr Julian Benson, Owner, Apostle Whey Cheese, Public Hearing, Camperdown, 19 September 2012. 455 Victorian Government, above n 408.



RECOMMENDATION 14

That the Department of Primary Industries work with Dairy Food Safety Victoria and PrimeSafe to extend the use of earned recognition principles in Victoria, to determine if opportunities exist for a reduction in food safety audit frequency, in particular in low risk areas. Any earned recognition system should be transparent so businesses can easily understand what is required to achieve a reduction in food safety audit frequency. The regulators may consider implementing a points‐based system based on the New South Wales model described at 9.68–9.72.

RECOMMENDATION 15

That as part of the regulators’ use of earned recognition principles the Minister for Agriculture and Food Security work with Dairy Food Safety Victoria and PrimeSafe to become advisory as well as ‘policing’ organisations, as requested by industry. This would also allow industry to educate the regulators about product developments, new processes and non‐regulatory ways of improving food safety outcomes in Victoria.

PERFORMANCE REPORTING

‘Public reporting across the system almost exclusively describes activities and rarely demonstrates how these contribute to achieving goals or objectives.’ Victorian Auditor‐General’s Office

9.82 Performance reporting measures the effectiveness of food safety regulations.

9.83 Performance reporting by regulators is an issue that was raised in previous reviews of Victoria’s food safety regime – by the Victorian Competition and Efficiency Commission in 2007 and 2011; and the Victorian Auditor‐General’s Office in 2012. The reports expressed disappointment in the lack of performance reporting undertaken by Victorian regulators. Whilst acknowledging the challenges of reporting, this remains a concern to the Committee.456

9.84 Reporting on the effectiveness of legislation and its implementation serves several purposes:

It improves regulators’ accountability It provides information that helps improve regulation – this is particularly

relevant to outcomes‐based regulation

456 Victorian Competition and Efficiency Commission, above n 425; Victorian Competition and Efficiency Commission, Strengthening Foundations for the Next Decade / Priorities for Regulatory Reform: An Inquiry into Victoria’s regulatory framework, Victorian Competition and Efficiency Commission, Melbourne, 2011; Victorian Auditor‐General’s Office, above n 433.



It helps governments and regulators allocate resources and programs to where they are most effective.457

9.85 For example, in the case of the seafood sector the Committee believes that an accurate system of performance reporting would have identified wildcatch as low risk in terms of food safety and may have led to its removal from the regulations.

9.86 Efficient performance reporting could also improve market access for the industry. For example the Dairy Food Safety Victoria website says: ‘The Victorian dairy industry’s reputation for food safety and integrity of production makes our products internationally preferred.’458

9.87 The Victorian government or FSANZ could use performance reports when considering the need for new legislation or education campaigns around the issue of food handling. The Committee heard a number of times that in many instances food becomes unsafe not because of production processes but rather because of poor handling practices. Performance reporting may reveal that food handling campaigns would be effective in improving food safety outcomes.

9.88 The Victorian Competition and Efficiency Commission states that in the case of food safety regulation performance reporting should take account of:

Input measures, such as staff numbers and budgets Output measures, such as data measuring inspection and enforcement /

compliance rates Outcome measures, such as foodborne illness rates and product recalls.459

9.89 Of these three, outcome measures are the hardest to collect, as is discussed below.

9.90 Both the Victorian Auditor‐General’s Office and the Victorian Competition and Efficiency Commission have stated that PrimeSafe and Dairy Food Safety Victoria need to improve their performance reporting systems.

9.91 For example, the Victorian Auditor‐General’s Office found that although both regulators employ good processes for reviewing the efficiency with which they deliver their policies, ‘… none have sufficient performance information to assure themselves on either the quality of their performance or the food safety benefits they deliver’.460

9.92 It adds that the regulators will need to identify:

What aspects of performance need to be measured Relevant indicators and data How to collect and collate the data How to report.461

9.93 In 2009, the Victorian Government responded to the Victorian Competition and Efficiency Commission’s recommendation that a performance reporting system be

457 Ibid. 458 See: www.dairysafe.vic.gov.au. 459 Victorian Competition and Efficiency Commission, above n 425. 460 Victorian Auditor‐General’s Office, above n 433, ix. 461 Ibid.



established by the regulators. It was proposed that the Food Act would be amended ‘… to require regulators to collect and submit specified data to enable the Department of Human Services [now the Department of Health] to publish an annual report on the operation of the Food Act’.462

9.94 However, the amendment to the Food Act 1984 only covered local councils:

7C Annual report on food regulation

(1) For each calendar year the Department must publish an annual report on food regulation.

(2) The annual report must contain the following information—

(a) statistics relating to the registration of food premises under this Act by the Secretary and each council including—

(i) the number of newly registered food premises;

(ii) the number of food premises for which registration was renewed;

(iii) the number of registrations under each class of registration;

(iv) the number of food premises for which registration under this Act was revoked or suspended;

(b) statistics relating to the analysis of food samples submitted by each council under section 32;

(c) statistics relating to the enforcement action taken by the Secretary and each council under this Act including—

(i) the number and nature of infringement notices issued;

(ii) the number of prosecutions and the nature of the alleged offences;

(iii) the number of cases that resulted in either a conviction or a finding of guilt;

(iv) the nature of any sentences or other orders imposed by the court.

9.95 The Committee received detailed updates on the progress of this reporting process from both the Department of Health463 and the Municipal Association of Victoria.464

9.96 The Minister for Agriculture’s Statement of Expectations for PrimeSafe and Dairy Food Safety Victoria includes a requirement for the publishing of ‘outcome performance indicators’ in the regulators’ annual reports without specifying these indicators.465 However, the Victorian Government’s 2009 response to the Victorian

462 Victorian Government Response to Victorian Competition and Efficiency Commission, Simplifying the Menu: Food

regulation in Victoria, Melbourne, 2008, p 17. 463 Ms Pauline Ireland, Assistant Director Food Safety and Regulation, Department of Health, Public Hearing, Melbourne, 12

November 2012; Dr Heather Haines, Manager Evidence Team, Department of Health, Public Hearing, Melbourne, 12 November 2012; Ms Diane Scott, Principal Advisor Regulatory Policy, Department of Health, Public Hearing, Melbourne, 12 November 2012.

464 Mr Rob Spence, Chief Executive Officer, Municipal Association Victoria, Public Hearing, Melbourne, 20 November 2012; Ms Rosemary Hancock, Policy Officer, Municipal Association Victoria, Public Hearing, Melbourne, 20 November 2012.

465 The Statement of Expectations can be found on the regulators’ websites. See: www.primesafe.vic.gov.au and www.dairysafe.vic.gov.au.



Competition and Efficiency Commission report included the following fields: corporate governance; industry education; compliance; enforcement activities, including prosecutions for serious non‐compliance events. Information relating to these fields is included in the regulators’ annual reports.466

9.97 The Committee remains concerned that this performance reporting information does not include evidence on how the actions of the regulators are improving food safety in Victoria. However, it is keen to stress that it fully appreciates that the complexities of this issue mean there is no simple or quick solution.

OVERCOMING BARRIERS TO EFFECTIVE PERFORMANCE REPORTING

“It is very, very difficult to find sensible, effective KPIs to measure the effectiveness of the system …” Mr Brian Casey, Melbourne

9.98 The need for effective performance reporting in the food safety sector has been raised in discussions and reports on the sector over a number of years. Because of the ongoing importance of this issue it is discussed again here.

9.99 Ideally data would be available that reveals the exact number of people falling ill because of unsafe food; where the outbreaks occur; and the exact source of and reason for the outbreak. This would give the regulators, government and consumers an accurate indication of the effectiveness of food safety regulation.

9.100 Collating accurate data on foodborne illness outbreaks however, is difficult for several reasons. For example:

Food travels across state and country borders Eating habits constantly evolve – including the recent trend favouring less

processed, and therefore higher risk, food The influence of weather; for example, an increase in rainfall can contribute to

higher rates of salmonella Demographic changes in the population Rates are influenced by how medical staff report illness More resources have been put into reporting, naturally leading to an increase

in recorded illnesses A lot of illness can be traced to the home and restaurants i.e. cross‐

contamination from poor food handling.467

9.101 Ms Pauline Ireland, Assistant Director Food Safety and Regulation, Department of Health told the Committee:

466 Victorian Government Response to Victorian Competition and Efficiency Commission, Simplifying the Menu: Food

regulation in Victoria, Melbourne, 2008. 467 Mr Kevin Cottrill, Chief Executive Officer, Australian Meat Industry Council, Public Hearing, Melbourne, 12 November

2012; Ms Pauline Ireland, above n 463; Dr Heather Haines, above n 463; Mr Jeff Hole, Executive Director, Victorian Competition and Efficiency Commission, Public Hearing, Melbourne, 12 November 2012; Mr Mike Shaw, President, Victorian Farmers Federation Chicken Meat Group, Public Hearing, Melbourne, 12 November 2012; Mr Brian Casey, above n 430; Dr Catherine Hollywell, above n 434; Victorian Government, above n 408; Victorian Chicken Meat Council, Submission, Number 21, 3 September 2012.



I think it is a very difficult exercise trying to prove the impact of regulation and regulatory systems on things like the rates of foodborne illness. It is a complicated undertaking because it is a complicated business. There are so many opportunities, if you like, for illness throughout the chain because there is a lot of handling. There is the product from growing or being produced on farm, processing, transport, potentially wholesaling, all the way through to the retailer or the restaurant that might be cooking it, and ultimately to the consumer. So it is a complex exercise trying to prove that regulation makes a difference in this context.468

9.102 The Committee learnt of another way of measuring food safety. Dr Heather Haines told the Committee that microbiological hygiene of meat, a ‘de facto indicator’ of pathogens, has improved in Australia since the meat industry widely adopted HACCP principles.469

9.103 The main benefit to society of food safety legislation is a reduction in foodborne illness. However, it has been suggested that in Australia the majority of foodborne illnesses can be traced back to practices in the retail and food service sector.470 Further, it can be argued that much of the dramatic improvement in foodborne disease rates over the past two centuries can be attributed to improvements in sanitation and water supplies. For example, in many developing countries, poor hygiene practices and sewage disposal, inadequate facilities for food preparation and storage, and a lack of potable water contribute to high illness rates.471

9.104 As another example, in developed countries Campylobacter is thought to be responsible for most foodborne diseases. The Victorian Department of Health states that prevention of infection from Campylobacter depends on ‘… good personal and food hygiene, particularly the adequate washing of vegetables, thorough cooking of raw meats (especially chicken) and the prevention of cross‐contamination’. Similar advice pertains to the prevention of Salmonella infection.472

9.105 The Committee discussed the issue of performance reporting with both Dairy Food Safety Victoria and PrimeSafe. Dr Hollywell told the Committee that Dairy Food Safety Victoria is improving its performance reporting process:

[Performance reporting] has been a challenge for us throughout all of the reviews and reports that have been done of Dairy Food Safety Victoria for the past few years. I would hope that you could see in this year’s annual report that we have made a concerted effort to report more information about our performance and our compliance and

468 Ms Pauline Ireland, above n 463. 469 Dr Heather Haines, above n 463. 470 Food Safety Management Group, ‘Review of the Ministerial policy guidelines on food safety management in Australia:

food safety programs’, 2011. 471 Hall G, D’Souza R and Kirk M, ‘Food disease in the new millennium: out of the frying pan and into the fire?’, Medical

Journal of Australia, 2002, Vol. 177, pp 614–618. 472 Department of Health, Surveillance of Notifiable Infectious Diseases in Victoria, Victorian Government, Melbourne,

2009, p 14.



enforcement activity. We have more data in there, and we do not run publications or communication or publicity campaigns, so this annual report is basically the only instrument we have to report to the public. This year we have really tried to put more performance reporting data in there, and we intend to improve that.473

9.106 The Committee commends Dairy Food Safety Victoria for its proactive approach to improving its performance reporting.

9.107 Mr Casey argued that showing how food safety regulators improve food safety is a joint responsibility shared between the regulators and the Departments of Primary Industries and Health:

… PrimeSafe alone cannot measure the effectiveness of agricultural food safety. We are responsible for one component of the regulatory management of it. The responsibility for measuring the effectiveness of the government’s agricultural food safety system clearly has to sit with the Department of Health and the Department of Primary Industries, but we need to contribute to that. The Board agreed in April this year, which follows the Auditor‐General’s report, that we will work in support of DPI and work in conjunction with Dairy Food Safety Victoria with a view to including more performance data in public reports, which would link objectives, performance measures and performance data.474

9.108 The Committee repeats its earlier comment acknowledging the difficulty of measuring the effectiveness of food safety systems.

9.109 Within the Victorian framework for food safety regulation there is a Committee of Food Regulators, as discussed in Chapter 3. The Victorian Competition and Efficiency Commission’s report Simplifying the Menu argues for the establishment of a common performance reporting system overseen by the Committee. This has been accepted by the Committee of Food Regulators.475

RECOMMENDATION 16

That Dairy Food Safety Victoria and PrimeSafe develop a performance reporting strategy for presentation to the Minister for Agriculture and Food Security, in line with previous recommendations from the Victorian Auditor‐General’s Office and the Victorian Competition and Efficiency Commission.

Report adopted: 7 March 2013.

473 Dr Catherine Hollywell, above n 434. 474 Mr Brian Casey, above n 430. 475 See: 3.80.


Appendix: References

BOOKS, JOURNALS AND MAGAZINES

Hall G, D’Souza R and Kirk M, ‘Food disease in the new millennium: out of the frying pan and into the fire?’, Medical Journal of Australia, Vol 177, No 11, 2002.

Hampton P, Reducing Administrative Burdens: Effective inspection and enforcement, HM Treasury, London, 2005.

Hanson L, Zahn E, Sommer R et al, ‘Estimating global mortality from potentially foodborne diseases: an analysis using vital registration data’, Population Health Metrics, 2012, Vol 10, No 5, 2012.

Kirk M, McKay I, Hall G et al, ‘Foodborne disease in Australia: the OzFoodNet experience’, Clinical Infectious Diseases, Vol 47, No 3, 2008.

Kortt M, Dollery B and Grant B, ‘Regional and local tensions: the role of shared services’, Public Policy, Vol 7, No 1, 2012.

REPORTS: GOVERNMENT AND PARLIAMENT

Australia New Zealand Food Regulation Ministerial Council, ‘Overarching policy guideline on Primary Production and Processing Standards’, Food Standards Australia and New Zealand, Canberra, 2002.

Australian Government, National Food Plan Green Paper 2012, Commonwealth of Australia, Canberra, 2012.

Banks G, ‘Reducing the regulatory burden: the way forward’, Speech, Taskforce on Reducing the Regulatory Burden on Business, Monash Centre for Regulatory Studies, 17 May 2006.

Council of Australian Governments, ‘Food Regulation Agreement 2008’, Council of Australian Governments, Canberra, 2008.



Dairy Australia, ‘Dairy food standards: development, verification and surveillance summary’, Dairy Australia, Melbourne.

Dairy Food Safety Victoria, Annual Report 2010–11, Dairy Food Safety Victoria, Melbourne, 2011.

Dairy Food Safety Victoria, Annual Report 2011–12, Dairy Food Safety Victoria, Melbourne, 2012.

Dairy Food Safety Victoria, Strategic Plan 2012–2015, Dairy Food Safety Victoria, Melbourne, 2012.

Department of Business, Innovation and Skills (UK), Transforming Regulatory Enforcement: Freeing up business growth, [Discussion Paper], United Kingdom Government, London, 2011.

Department of Health and Ageing, The Annual Cost of Foodborne Illness in Australia, Commonwealth of Australia, Canberra, 2006.

Department of Health, Food Safety in Focus: Food Act Report 2010, Victorian Government, Melbourne, 2012.

Department of Health, Surveillance of Notifiable Infectious Diseases in Victoria, Victorian Government, Melbourne, 2009.

Department of Premier and Cabinet, Improving Governance of Regulators: Principles and Guidelines, Victorian Government, Melbourne, 2010.

Department of Treasury and Finance, Victorian Guide to Regulation, [Edition 2.1], Victorian Government, Melbourne, 2011.

Department of Treasury and Finance, Victorian Regulatory Change Measurement Manual, Victorian Government, Melbourne, 2010.

Food Regulation Standing Committee of the Australia and New Zealand Food Regulation Ministerial Council, ‘Protocol for the development of Primary Production and Processing Standards by FSANZ’, Food Standards Australia and New Zealand, Canberra, 2002.

Food Regulation Standing Committee, ‘Ministerial policy guidelines on food safety management in Australia: food safety programs’, Food Standards Australia and New Zealand, Canberra, 2003.

Food Safety Management Group, ‘Review of the Ministerial policy guidelines on food safety management in Australia: food safety programs’, Food Standards Australia and New Zealand, Canberra, 2011.

Food Standards Australia and New Zealand, Final Assessment Report Proposal P265, Primary Production and Processing Standard for Seafood, Food Standards Australia and New Zealand, Canberra, 2005.

Implementation Sub‐Committee of the Food Regulation Standing Committee, National Food Safety Audit Policy, Food Standards Australia and New Zealand, Canberra, 2006.

Peterson D and Fensling S, ‘Risk‐based regulation: good practice and lessons for the Victorian context’, Conference paper presented at the Victorian Competition and Efficiency Commission Regulatory Conference, 1 April 2011.

Appendix one: References


PrimeSafe, Annual Report 2010–11, PrimeSafe, Melbourne, 2011.

PrimeSafe, Annual Report 2011–12, PrimeSafe, Melbourne, 2012.

Productivity Commission, Performance Benchmarking of Australian and New Zealand Business Regulation: Food safety, Commonwealth of Australia, Canberra, 2009.

Senate Select Committee on Australia’s Food Processing Sector, Inquiry into Australia’s Food Processing Sector, Commonwealth of Australia, Canberra, 2012.

Victorian Auditor‐General’s Office, Agricultural Food Safety, Victorian Government, Melbourne, 2012.

Victorian Auditor‐General’s Office, Management of Food Safety in Victoria, Victorian Government, Melbourne, 2002.

Victorian Committee of Food Regulators, Strategic Plan for Food Regulation in Victoria 2011–2014, Victorian Committee of Food Regulators, Melbourne, 2011.

Victorian Competition and Efficiency Commission, Annual Report 2011–12, Victorian Competition and Efficiency Commission, Melbourne, 2012.

Victorian Competition and Efficiency Commission, Local Government for a Better Victoria: An inquiry into streamlining local government regulation, Victorian Competition and Efficiency Commission, Melbourne, 2010.

Victorian Competition and Efficiency Commission, Regulation and Regional Victoria: Challenges and opportunities, Victorian Competition and Efficiency Commission, Melbourne, 2005.

Victorian Competition and Efficiency Commission, Simplifying the Menu: Food regulation in Victoria, Victorian Competition and Efficiency Commission, Melbourne, 2007.

Victorian Competition and Efficiency Commission, Strengthening Foundations for the Next Decade / Priorities for Regulatory Reform: An Inquiry into Victoria’s regulatory framework, Victorian Competition and Efficiency Commission, Melbourne, 2011.

Victorian Meat Authority, Annual Report 1998–99, Victorian Meat Authority, Melbourne, 1999.

LEGISLATION

Dairy Act 2000.

Food Act 1984.

Food Standards Australia New Zealand Act 1991.

Meat Industry Act 1993.

Seafood Safety Act 2003.

MEDIA

‘Food safety forum here tomorrow’, Portland Observer, 19 September 2012.

Sim T, ‘Raw milk’s not for big cheeses’, Weekly Times, 26 September 2012.



‘Two sets of rules’, Bairnsdale Advertiser, 19 October 2012.

‘LEFCOL burdened by PrimeSafe fee structure’, Lakes Post, 24 October 2012.

‘Spotlight on safe food regulation’, Country News, 19 November 2012.

‘New food safety audit system cuts costs’, Australian Dairy Farmer, 1 December 2012.

‘Making our food safe’, Kyabram Free Press, 5 December 2012.

Walker G, More illness cases linked to soft cheese products, [Media Release], Department of Health, 18 January 2013.

AUSTRALIAN STANDARDS

Australian Primary Productions and Processing Standards.

Australian Standard for Construction of Premises and Hygienic Production of Poultry Meat for Human Consumption (AS 4465:2005).

Australian Standard for the Hygienic Production and Transportation of Meat and Meat Products for Human Consumption (AS 4696:2007).

Australian Standard for the Hygienic Production of Natural Casings for Human Consumption (AS 5011:2001).

Standard for the Hygienic Production of Pet Meat (PISC Technical Report 88 – Amended 2009).

Australian Standard for the Hygienic Production of Rabbit Meat for Human Consumption (AS 4466:1997).

Australian Standard for the Hygienic Production of Ratite (Emu/Ostrich) Meat for Human Consumption (AS 5010:2001).

Australian Standard for the Hygienic Production of Wild Game Meat for Human Consumption (AS 4464:2007).

Australian Standard for the Hygienic Rendering of Animal Products (AS 5008:2007).

VICTORIAN STANDARDS AND GUIDELINES

Food Safety Management Statement for Poultry Growers Guideline.

Microbiological Testing for Process Monitoring in the Meat Industry. Stage 1: Guidelines.

Microbiological Testing for Process Monitoring in the Poultry Meat Industry.

Regulatory Guidelines for the Control of Listeria.

Victorian Standard for Hygienic Production of Meat at Retail Premises.

DAIRY TECHNICAL STANDARDS

Milk cooling validation on dairy farms.

Technical Standard 1: High Temperature Short Time Pasteurisation of Milk.

Technical Standard 2: Low Temperature Long Time Pasteurisation of Milk.


Appendix: Submissions

No Organisation Location Date Received 001 East Gippsland Estuarine Fishermens

Association Lakes Entrance 30/7/12

002 Arrow Fisheries Portland 2/8/12 003 Lakes Entrance Fishermens Co‐Operative Lakes Entrance 10/8/12

004 Veteran Fishing Portland 14/8/12 005 Nautilus Seafoods Pty Ltd Tarneit 19/8/12 006 Miss M Kolovrat Melbourne 21/8/12 007 Mr M Schinkel Cowes 23/8/12 008 Mr J O’Neill Arbost 24/8/12 009 Eastern Zone Abalone Industry Association Mallacoota 24/8/12 010 Thirteenth Mount Cope Pty Ltd Mallacoota 27/8/12 011 Hayes Seafoods Mallacoota 29/8/12 012 Victorian Abalone Divers Association Rye 29/8/12 013 Bendigo Commercial Poultry Producers

Association Bendigo 29/8/12

014 Moora Moora Pty Ltd Bellbrae 29/8/12 015 Bobinawarrah Farm Bobinawarrah 31/8/12 016 Abalone Industry Committee Warrandyte 31/8/12 017 Australian Sea Fisheries Group Reservoir 31/8/12 018 Lonimar Australia Kensington 31/8/12 019 Australian Meat Industry Council St Leonards NSW 31/8/12 020 Apollo Bay Fishermen’s Co‐Operative Society

Ltd Apollo Bay 31/8/12

021 Victorian Chicken Meat Council Somerville 3/9/12



022 Tasmanian Seafoods Dandenong 3/9/12 023 Victorian Farmers’ Markets Association Brunswick 3/9/12 024 Victorian Abalone Processors Association Inc Warrandyte 3/9/12 025 Ridley AgriProducts Melbourne 3/9/12 026 Seafood Industry Victoria Melbourne 3/9/12 027 Sutton Grange Organic Farm Sutton Grange 3/9/12

028 Mr G Menke Mallacoota 3/9/12 029 Eastwind Rare Breeds Farm Macclesfield 3/9/12 030 Southern Rocklobster Ltd Hampton 3/9/12 031 Mr C Daniel Lakes Tyres Beach 3/9/12 032 Western Abalone Divers Association Geelong 3/9/12 033 Community Support for L E Giles and Sons Inc Trafalgar 3/9/12 034 Mr M Giles Trafalgar 3/9/12 035 Mrs V Giles Trafalgar 3/9/12 036 Municipal Association of Victoria Melbourne 6/9/12 037 Mr T Domaschenz Patyah 3/9/12 038 Joint Accreditation System of Australia and

New Zealand Hughes ACT 3/9/12

039 Dairy Food Safety Victoria Camberwell 3/9/12 040 L E Giles and Sons Trafalgar 10/9/12 041 Victorian Farmers Federation Melbourne 10/9/12 042 Australian Food and Grocery Council Canberra 11/9/12 043 Brimin Lodge Murray Cod Brimin 12/9/12 044 Walkerville Kiosk Walkerville 14/9/12 045 Victorian Government Melbourne 17/9/12 046 Dairy Australia Melbourne 02/10/12 047 Fishermen Direct Seaford 03/10/12 048 Fonterra Melbourne 03/10/12 049 City of Greater Geelong Geelong 04/10/12 050 Little Nippa Yabbies Bearii 5/10/12 051 Rose Dairy Co Wy Yung 22/10/12 052 Mr K Tesselaar Cooriemungle 24/10/12 053 McFresh Vegetables Lindenow 15/10/12 054 Hook and Spoon Benalla 3/12/12 055 Guendulain Farm Yarragon 6/12/12 056 United Dairy Power Melbourne 28/12/12


Appendix: Public consultation program – witnesses

4 September 2012 Kyneton Site Visit 4 September 2012 Castlemaine Site Visit 5 September 2012 Lockwood Site Visit 5 September 2012 Castlemaine Public Hearing 18 September 2012 Corio Site Visit 18 September 2012 North Geelong Site Visit 19 September 2012 Camperdown Public Hearing 19 September 2012 Timboon Site Visit 20 September 2012 Portland Public Hearing 16 October 2012 Jindivick Site Visit 16 October 2012 Warragul Site Visit 17 October 2012 Bairnsdale Public Hearing 18 October 2012 Sale Public Hearing 22 October 2012 Melbourne Public Hearing 1 November 2012 South Australia Consultations 2 November 2012 South Australia Consultations 12 November 2012 Melbourne Public Hearing 20 November 2012 Melbourne Public Hearing 21 November 2012 Rushworth Site Visit 21 November 2012 Stanhope Site Visits 22 November 2012 Wangaratta Public Hearing



4 September 2012 Kyneton – Site Visit Name Position Organisation Mr Gary Hardwick General Manager Hardwicks Mr Luke Hardwick General Manager Hardwicks Mr James Hardwick General Manager Hardwicks Mr Mark Hardwick General Manager Hardwicks 4 September 2012 Castlemaine – Site Visit Name Position Organisation Mr Josh Dray People and Performance

Manager KR Castlemaine

Ms Rachel Wood Quality Assurance Manager KR Castlemaine 5 September 2012 Lockwood – Site Visit Name Position Organisation Mr James Thompson Chief Executive Officer Hazeldene’s Chickens 5 September 2012 Castlemaine – Public Hearing Name Position Organisation Mr Dean Russell Managing Director Moira Mac's Poultry and

Fine Foods Ms Kristine Milburn Production Manager Glenloth Mr Steve Martin Meat Inspector Glenloth Ms Sue McGorlick Owner Locheilan Cheese Mr Allen Snaith Owner Warialda Belted Galloway

Beef Ms Carla Meurs Owner Sutton Grange Organic Farm

and Holy Goat Cheese Ms Ann‐Marie Monda Owner Sutton Grange Organic Farm

and Holy Goat Cheese 18 September 2012 Corio – Site Visit Name Position Organisation Mr Charles Giarusso Quality Assurance Manager Herd Foods Mr John Karounos HR Manager Herd Foods 18 September 2012 North Geelong – Site Visit Name Position Organisation Mr Kon Tsoumanis Managing Director Barwon Foods Mr Steven Mantzaris Director Mantzaris Fisheries Pty Ltd

Appendix three: Witnesses


19 September 2012 Camperdown – Public Hearing Name Position Organisation Mr Julian Benson Owner Apostle Whey Cheese Ms Jocelyn Bevin Acting Chief Executive

Officer Westvic Dairy

Mr Adrian Hoffmann Sustainable Agriculture and Communities Alliance

Ms Michelle Hill Quality Assurance Manager Warrnambool Cheese and Butter

Mr Simon Schulz Owner Schulz Organic Farms 19 September 2012 Timboon – Site Visit Name Position Organisation Mr Matthieu Megard Owner L’Artisan Cheese and Mouse

Trap Cafe 20 September 2012 Portland – Public Hearing Name Position Organisation Mr Gary Everett Prime lamb producer Ms Jeanne Kelly Owner Arrow Fisheries Ms Kim Bailey Administrative Officer Southern Canning Mr Don Ward Dairy farmer Mr Gary Kenyon General Manager Sou’west Seafoods Mr Trevor Domaschenz Vice President Victorian Yabby Growers

Association Cr Ron Hawkins Councillor West Wimmera Shire

Council Mr Stephen Bull Farmer Mr Lisle Elleway Owner Veteran Fishing 16 October 2012 Jindivick – Site Visit Name Position Organisation Mr Franck Beaurain Chief Executive Officer Jindi Cheese 16 October 2012 Warragul – Site Visit Name Position Organisation Mr Robert Radford Managing Director Radfords Meats Mr Paul Sheedy Quality Assurance Manager Radfords Meats 17 October 2012 Bairnsdale – Public Hearing Name Position Organisation Mr David McKerrell Member East Gippsland Food Cluster Mr Nelson Cox Member East Gippsland Food Cluster Mr William Bulmer Member East Gippsland Food Cluster Cr Michael Freshwater Councillor East Gippsland Shire Council Mr Alan Kennebury Managing Director Rose Dairy Co



Mr Mark Laity Director Rose Dairy Co Mr Jim Ashcroft Business Manager Rose Dairy Co Mr Ron Paynter Owner Paynter Farms Ellinbank Mr Geoff Ellis Chief Executive Officer

Chairman

Eastern Zone Abalone Industry Association Lakes Entrance Fishermens Co‐Operative

18 October 2012 Sale – Public Hearing Name Position Organisation Ms Debbie Di Sisto Representative L E Giles and Sons Ms Bronwyn Cowan Representative Community Support for L E

Giles and Sons Inc Mr John Buxton Livestock farmer Ms Heather Osborn Owner Merriman’s Creek Farm Mr Daniel Encel Owner Walkerville Kiosk Ms Mary Aldred Executive Director Committee for Gippsland 22 October 2012 Melbourne – Public Hearing Name Position Organisation Ms Kathryn Lockyer Manager Accreditation

Services Domestic JAS‐ANZ

Mr Ian Halliday Managing Director Dairy Australia Ms Helen Dornom Manager Sustainability Dairy Australia Ms Carol Bate Regulatory Manager Fonterra Ms Sarah Carter Supplier Excellence Manager Fonterra Ms Kerry Callow President United Dairyfarmers of

Victoria Mr Vin Delahunty Manager United Dairyfarmers of

Victoria Mr Reg Weine Chief Executive Officer Bulla 31 October 2012 South Australia – Consultations Name Position Organisation Mr Geoff Raven Manager Food and Plant

Standards Department of Primary Industries and Regions SA

Mr Paul Dowsett Manager Primary Industries Food Safety

Biosecurity SA

Mr Mario Del Medico Manager International Oyster and Seafoods

Mr Andrew Ferguson Owner Ferguson Fisheries Ms Kris Lloyd Manager and Head Cheese

Maker Woodside Cheese Wrights

Mr John Crosby General Manager Dairy Authority of South Australia

Appendix three: Witnesses


2 November 2012 South Australia – Site Visits Name Position Organisation Mr Franz Knoll Owner Barossa Fine Foods Mr Paul Sandercock South Australia Chairman Australian Meat Industry

Council Ms Victoria McClurg Director Barossa Valley Cheese

Company 12 November 2012 Melbourne – Public Hearing Name Position Organisation Ms Jodi Dixon Regulatory Affairs Manager Coles Supermarkets Ms Jackie Healing Quality Assurance Manager Coles Supermarkets Ms Pauline Ireland Assistant Director Food

Safety and Regulation Department of Health

Dr Heather Haines Manager Evidence Team Department of Health Ms Diane Scott Principal Advisor Regulatory

Policy Department of Health

Dr Matthew Butlin Chair Victorian Competition and Efficiency Commission

Mr Jeff Hole Executive Director Victorian Competition and Efficiency Commission

Mr Robert Parkes General Manager Ridley AgriProducts Mr Frank Herd Chairman Australian Meat Industry

Council Mr Kevin Cottrill Chief Executive Officer Australian Meat Industry

Council Mr Peter Skene Chief Executive Officer Aussie Farmers Dairy Mr Chris Melville Dairy Manager Aussie Farmers Dairy Ms Renee Vajtauer Executive Director Seafood Industry Victoria Mr Marc Barnes Manager Food Division NCS International Mr Darryl Harrison Policy Manager Victorian Farmers

Federation Mr Ian Blyth Chicken Meat Manager Victorian Farmers

Federation Mr Mike Shaw President Victorian Farmers

Federation Chicken Meat Group

Mr Alan Wilson President Victorian Chicken Meat Council

20 November 2012 Melbourne – Public Hearing Name Position Organisation Mr Rob Spence Chief Executive Officer Municipal Association of

Victoria Ms Rosemary Hancock Policy Officer Municipal Association of

Victoria Mr Steve Sodomaco Manager Health Local Laws City of Greater Geelong



Mr Adrian Holbrook Coordinator Health Services City of Greater Geelong Dr Catherine Hollywell Chief Executive Officer Dairy Food Safety Victoria Mr Grant Davies Chairman Dairy Food Safety Victoria Mr Brian Casey Chief Executive PrimeSafe Mr Bill Bray Chairman PrimeSafe 21 November 2012 Rushworth – Site Visit Name Position Organisation Mr Jeff Perry Owner Perry’s Butchery 21 November 2012 Stanhope – Site Visit Name Position Organisation Ms Carol Bate Regulatory Manager Fonterra Mr Brett Nilon Site Manager Fonterra Mr Nicholas Lembo Communications Fonterra 21 November 2012 Stanhope – Site Visit Name Position Organisation Mr Peter Chomley Director Countrywide Pet Foods 22 November 2012 Wangaratta – Public Hearing Name Position Organisation Ms Diahann Newell Manager Community Health

and Amenities Wangaratta Rural City Council

Mr Ross Cairns Senior Environmental Officer Wangaratta Rural City Council

Ms Lisa Giese Environmental Officer Wangaratta Rural City Council

Ms Megan Atar Owner Seven Hills Goat Farm Mr Nathan Wolter Owner Huon Distributors Mr Peter Thrum Chief Financial Officer Benalla Abattoirs Mr Simon Noble Owner Brimin Lodge Murray Cod Mr Felix Gamze Owner Felix’s Plaza Meats Ms Ceridwen Brown Assistant General Manager Milawa Cheese Factory Mr Geoff Dinning Owner/Manager Dinning’s Kelly Country Dairy


Appendix: Audit terms and definitions

The following terms and definitions are used across jurisdictions to describe regulatory food safety audits.476

Audit: A systematic, independent and documented process for obtaining evidence and evaluating it objectively to determine the extent to which the audit criteria are fulfilled.

Auditor review: a general term for review of an auditor’s performance which may include a range of monitoring mechanisms, such as investigation of complaints, review of documentation and client interviews.

Certification: the procedure by which official certification bodies and officially recognised bodies provide written or equivalent assurance that foods or food control systems conform to requirements; certification of food may be, as appropriate, based on a range of inspection activities, including continuous on‐line inspection, auditing of quality assurance systems and examination of finished products.

Check audit: an action taken to verify the effectiveness of a previous audit, including a full audit or a partial audit; it may be used to assess the performance of an auditor or be part of monitoring to assess whether a regulatory system is achieving its objectives.

Compliance audit: an assessment of whether a business is complying with its internal food safety program.

Corrective action: an action taken by a food business/primary food producer to rectify a non‐conformance or systems deviation to ensure ongoing compliance with its legislated food safety program and relevant regulatory scheme.

476 Source: Implementation Sub‐Committee of the Food Regulation Standing Committee, National Food Safety Audit Policy, Food Standards Australia and New Zealand, Canberra, 2006.



Corrective action request: a formal notification to a food business/primary food producer requesting the rectification of a non‐conformance or systems deviation to ensure ongoing compliance with the legislated food safety program and relevant regulatory scheme.

Critical control point: a step at which control can be applied and is essential to prevent or eliminate a food safety hazard or reduce it to an acceptable level.

Critical non‐conformance: a contravention of legislation that presents an imminent and serious risk to the safety of food intended for sale, or that will cause significant unsuitability of food intended for sale.

Follow‐up audit: a review in response to audit findings that identified areas of concern.

Hazard Analysis Critical Control Point (HACCP): a systematic approach to food safety that addresses risks presented by physical, chemical and biological hazards through prevention rather than finished product inspection. Hazard Analyses (HAs) are used in the food industry to identify potential food safety risks so that key actions, monitored at critical control points, can be taken to reduce or eliminate the risks of those hazards being realised. The system is used at all stages of food production and handling.477

Initial audit: the first full examination of a food safety program to ensure its adequacy and implementation, including desk and on‐site auditing.

Inspection: the examination of food or systems for control of food, raw materials, processing and distribution, including in‐process and finished product testing, to verify that they conform to regulatory requirements.

Non‐conformance: a deficiency or a failure of a food business to comply with its legislated food safety program or relevant regulatory scheme (Note: Food regulators may develop sub‐definitions of non‐conformance as major or minor non‐conformance consistent with their existing legislation.)

Regulatory system monitoring: a general term for activities to ascertain if a regulatory audit system is achieving its objectives; this may involve using a range of mechanisms, including auditor review and food safety program review.

Systems audit: the periodic review of a food safety program to ensure that the food safety management system continues to be effective in controlling the identified food safety hazards and ensuring the production of safe and suitable food.

477 HACCP Australia: www.haccp.com.au/index.php.


Appendix: Definition of ‘food’

Section 4A of the Victorian Food Act 1984 states:

(1) In this Act, food includes:

(a) any substance or thing of a kind used, or represented as being for use, for human consumption (whether it is live, raw, prepared or partly prepared);

(b) any substance or thing of a kind used, or represented as being for use, as an ingredient or additive in a substance or thing referred to in paragraph (a);

(c) any substance used in preparing a substance or thing referred to in paragraph (a) (other than a substance used in preparing a living thing) if it comes into direct contact with the substance or thing referred to in that paragraph, such as a processing aid;

(d) chewing gum or an ingredient or additive in chewing gum, or any substance used in preparing chewing gum;

(e) any substance or thing declared to be a food under a declaration in force under section 3B of the Australia New Zealand Food Authority Act 1991 of the Commonwealth.

(2) A substance, thing, chewing gum or ingredient or additive in chewing gum described in subsection (1) is food regardless of whether or not it is in a condition fit for human consumption.

(3) However, food does not include a therapeutic good.

(4) To avoid doubt, food may include live animals and plants.


Appendix: Foodborne disease rates

Foodborne disease mortality rates per 100,000 based on World Health Organization’s Initiative to Estimate the Global Burden of Foodborne Diseases* Country Rate Argentina 1.33 Australia 0.27 Austria 0.41 Brazil 4.20 Bulgaria 0.52 Canada 1.19 Cuba 2.81 Denmark 1.33 Egypt 21.03 Finland 0.89 France 1.53 Germany 0.69 Hungary 0.35 Israel 1.66 Italy 0.15 Japan 1.07 South Korea 0.47 Kyrgyzstan 6.96 Mexico 5.07 Netherlands 0.49 Norway 2.13 Panama 4.25 Poland 0.11 Portugal 0.16 Serbia and Montenegro 0.66 South Africa 25.84



Spain 0.94 Sweden 0.95 Switzerland 0.53 Thailand 1.55 Trinidad and Tobago 5.04 United Kingdom 1.89 United States 0.65 Uzbekistan 1.09 Venezuela 6.82

Source: Hanson L, Zahn E, Sommer R et al, ‘Estimating global mortality from potentially foodborne diseases: an analysis using vital registration data’, Population Health Metrics, 2012, Vol 10, No 5, 2012.

*For each of the 48 countries, mortality figures were combined and averaged across all available years (2000–2005). Mortality rates per 100,000 were calculated using 2005 population estimates from the 2006 revision of ‘The World Population Prospects’, a publication of the UN Department of Economic and Social Affairs.

AUSTRALIA

Foodborne disease rates are monitored in Australia by state governments, who then pass data to the national body, OzFoodNet. In turn, OzFoodNet publishes regular updates on nine foodborne diseases. OzFoodNet also funds an epidemiologist position in each Department of Health across Australia.

The following information is obtained from the OzFoodNet website: www.ozfoodnet.gov.au.

Exact figures are hard to obtain because foodborne disease is under‐reported – not every person affected by a foodborne disease presents to a doctor and not every illness is recorded and passed on to governments. The commonly used figure in Australia is that an estimated 5.4 million cases of foodborne disease occur annually, costing an estimated $1.2 billion per year. This figure is an estimate based on the extrapolating of reported figures, but it should be noted that the figure is also based on more than the nine foodborne diseases currently recorded by OzFoodNet.

It should also be noted that comparing rates among countries is difficult as countries use different methods of collating data.

Enhanced foodborne disease surveillance has been recognised as an essential tool to help reduce food poisoning by the World Health Organization and many countries around the world. The Australian Government Department of Health and Ageing established OzFoodNet in 2000 as a collaborative initiative with Australia's state and territory health authorities to provide better understanding of the causes and incidence of foodborne disease in the community and to provide an evidence base for policy formulation. It is a member of the Communicable Diseases Network Australia, and is supported by technical assistance from the National Centre for Epidemiology and Population Health at the Australian National University, Food Standards Australia New Zealand, the Department of Agriculture, Fisheries and Forestry, and the Public Health Laboratory Network.

Foodborne disease rates


MISSION

OzFoodNet's mission is to apply concentrated effort at a national level to investigate and understand foodborne disease, to describe more effectively its epidemiology and to identify ways to minimise foodborne illness in Australia.

AIMS

OzFoodNet aims to:

Estimate the incidence and cost of foodborne illness in Australia

Investigate the epidemiology of foodborne diseases, by enhancing surveillance and conducting special studies on foodborne pathogens

Collaborate nationally to coordinate investigations into foodborne disease outbreaks, particularly those that cross State, Territory and country borders

Identify foods and commodities that cause human illness and provide information to food safety agencies for risk assessment

Train people to investigate foodborne illness.

OPERATION OF THE NETWORK

Health departments from Australia's states and territories are funded to employ epidemiologists to focus on foodborne illness surveillance. A co‐ordinating epidemiologist ensures a consistent direction and methodology for OzFoodNet through consensus.

The OzFoodNet central team is based in the Office of Health Protection, a division of the Australian Government Department of Health and Ageing in Canberra. This team oversees the activities of the OzFoodNet Working Group.

Information sharing is crucial for the success of OzFoodNet. Network members communicate frequently about issues such as unexpected clusters of foodborne disease in Australia.

SURVEILLANCE DATA

OzFoodNet analyses important data on foodborne diseases in Australia. These analyses enable the network to identify outbreaks linked to particular infections, and to help health departments to detect problems with food or water safety.

PATHOGENS AND ILLNESS UNDER SURVEILLANCE

OzFoodNet and partner agencies follow up and investigate the following pathogens:

Campylobacter

Salmonella

Typhoid

Shigella



Shiga Toxin‐producing Eschericia coli

Haemolytic Uraemic Syndrome

Listeria

Hepatitis A.

State and territory legislation requires laboratories and doctors to report infections due to these organisms. New South Wales does not require notification of Campylobacter infections, except in outbreak settings. Other notifiable pathogens potentially transmitted by food include Hepatitis E, Vibrio cholerae, Cryptosporidium, and Giardia. OzFoodNet epidemiologists provide data and interpretation on these illnesses where a link with food is identified.

Other aetiological agents cause foodborne disease and outbreaks. Examples of these include: noroviruses, ciguatera, Clostridium perfringens, Staphlycoccus aureus, Vibrio parahaemolyticus and Aeromonas spp. These are usually notifiable by law under the category of 'food & waterborne disease'. This allows urgent notification and investigation in the case of an outbreak. OzFoodNet epidemiologists report fortnightly summaries of clusters investigated, and quarterly data from gastrointestinal disease outbreaks.

For more information on notification of individual cases and rates see the National Notifiable Surveillance System website: www9.health.gov.au/cda/source/CDA‐index.cfm.



NUMBER OF NOTIFICATIONS FOR DISEASES PER 100,000 POPULATION, 1991 TO 2011.478

Tasm

ania

Campylobacteriosis

1991: 157.7

1992: 90.9

1993: 92.9

1994: 105.5

1995: 100.9

1996: 98.9

1997: 70.5

1998: 75.0

1999: 87.4

2000: 109.0

2001: 143.5

2002: 128.0

2003: 131.9

2004: 126.8

2005: 156.7

2006: 122.3

2007: 144.6

2008: 97.4

2009: 124.8

2010: 143.1

2011: 169.2

Salm

onellosis

1991: 43.7

1992: 27.5

1993: 29.5

1994: 26.6

1995: 29.6

1996: 25.7

1997: 23.0

1998: 24.8

1999: 31.8

2000: 27.8

2001: 34.5

2002: 35.1

2003: 30.8

2004: 24.9

2005: 62.1

2006: 39.0

2007: 45.6

2008: 41.4

2009: 33.0

2010: 46.5

2011: 38.2

South Au

stralia

Campylobacteriosis

1991: 110.4

1992: 150.4

1993: 115.4

1994: 154.4

1995: 224.0

1996: 178.6

1997: 130.1

1998: 153.5

1999: 160.6

2000: 126.0

2001: 176.9

2002: 164.4

2003: 172.7

2004: 127.7

2005: 135.9

2006: 160.7

2007: 169.4

2008: 124.3

2009: 108.1

2010: 107.8

2011: 128.1

Salm

onellosis

1991: 34.2

1992: 24.2

1993: 27.7

1994: 34.2

1995: 43.1

1996: 25.8

1997: 38.3

1998: 34.9

1999: 63.6

2000: 29.8

2001: 40.7

2002: 34.1

2003: 29.2

2004: 34.2

2005: 37.9

2006: 36.4

2007: 55.5

2008: 41.3

2009: 41.9

2010: 40.6

2011: 63.7

Victoria

Campylobacteriosis

1991: 52.1

1992: 48.5

1993: 45.8

1994: 77.6

1995: 65.7

1996: 75.5

1997: 76.8

1998: 72.1

1999: 94.2

2000: 107.0

2001: 114.6

2002: 103.1

2003: 113.6

2004: 127.9

2005: 120.8

2006: 111.6

2007: 121.6

2008: 108.3

2009: 107.1

2010: 119.9

2011: 120.4

Salm

onellosis

1991: 20.4

1992: 18.0

1993: 15.5

1994: 23.5

1995: 21.6

1996: 20.0

1997: 38.5

1998: 22.8

1999: 23.3

2000: 21.4

2001: 23.0

2002: 25.8

2003: 26.4

2004: 22.6

2005: 29.1

2006: 27.2

2007: 36.0

2008: 31.0

2009: 30.2

2010: 41.2

2011: 48.6

478 Source: Department of Health and Ageing, National Notifiable Diseases Surveillance System. See: www.health.gov.au/internet/main/publishing.nsf/Content/cda‐surveil‐nndss‐nndssintro.htm.



1991: 20.4 1992: 18.0 1993: 15.5 1994: 23.5 1995: 21.6 1996: 20.0 1997: 38.5 1998: 22.8 1999: 23.3 2000: 21.4 2001: 23.0 2002: 25.8 2003: 26.4 2004: 22.6 2005: 29.1 2006: 27.2 2007: 36.0 2008: 31.0 2009: 30.2 2010: 41.2 2011: 48.6

Salmonellosis

Victoria

1991: 52.1 1992: 48.5 1993: 45.8 1994: 77.6 1995: 65.7 1996: 75.5 1997: 76.8 1998: 72.1 1999: 94.2 2000: 107.0 2001: 114.6 2002: 103.1 2003: 113.6 2004: 127.9 2005: 120.8 2006: 111.6 2007: 121.6 2008: 108.3 2009: 107.1 2010: 119.9 2011: 120.4

Campylobacteriosis

1991: 49.6 1992: 47.2 1993: 43.7 1994: 45.4 1995: 49.2 1996: 60.8 1997: 55.9 1998: 82.2 1999: 64.0 2000: 51.3 2001: 60.6 2002: 72.0 2003: 57.5 2004: 71.8 2005: 64.9 2006: 66.0 2007: 56.3 2008: 47.4 2009: 55.5 2010: 64.6 2011: 63.8 Salm

onellosis

Queensland

1991: 93.2 1992: 98.7 1993: 79.5 1994: 66.8 1995: 64.2 1996: 92.5 1997: 120.4 1998: 127.2 1999: 91.4 2000: 103.3 2001: 109.2 2002: 104.3 2003: 100.7 2004: 105.3 2005: 110.5 2006: 97.0 2007: 105.7 2008: 111.8 2009: 104.1 2010: 106.3 2011: 112.0

Campylobacteriosis

1991: 43.9 1992: 39.8 1993: 39.2 1994: 34.8 1995: 41.2 1996: 35.0 1997: 32.5 1998: 36.3 1999: 38.3 2000: 49.4 2001: 44.1 2002: 37.6 2003: 31.4 2004: 31.9 2005: 39.8 2006: 38.7 2007: 46.7 2008: 39.2 2009: 49.9 2010: 55.8 2011: 56.1 Salm

onellosis

1991: 57.4 1992: 60.2 1993: 53.9 1994: 62.5 1995: 89.1 1996: 108.9 1997: 77.0 1998: 91.9 1999: 76.4 2000: 106.0 2001: 136.3 2002: 111.3 2003: 101.1 2004: 97.7 2005: 121.6 2006: 94.4 2007: 99.0 2008: 84.3 2009: 114.8 2010: 101.3 2011: 92.6 Cam

pylobacteriosis

Western Australia



New

Sou

th W

ales*

Campylobacteriosis

*New

Sou

th W

ales doe

s not re

cord figures for Cam

pylobacteriosis

.

Salm

onellosis

1991: 19.4

1992: 12.7

1993: 15.7

1994: 17.6

1995: 20.8

1996: 19.7

1997: 27.0

1998: 28.6

1999: 22.4

2000: 21.7

2001: 25.1

2002: 31.7

2003: 27.7

2004: 31.7

2005: 31.8

2006: 29.7

2007: 36.1

2008: 32.1

2009: 38.3

2010: 52.1

2011: 47.7

Victoria

Campylobacteriosis

1991: 52.1

1992: 48.5

1993: 45.8

1994: 77.6

1995: 65.7

1996: 75.5

1997: 76.8

1998: 72.1

1999: 94.2

2000: 107.0

2001: 114.6

2002: 103.1

2003: 113.6

2004: 127.9

2005: 120.8

2006: 111.6

2007: 121.6

2008: 108.3

2009: 107.1

2010: 119.9

2011: 120.4

Salm

onellosis

1991: 20.4

1992: 18.0

1993: 15.5

1994: 23.5

1995: 21.6

1996: 20.0

1997: 38.5

1998: 22.8

1999: 23.3

2000: 21.4

2001: 23.0

2002: 25.8

2003: 26.4

2004: 22.6

2005: 29.1

2006: 27.2

2007: 36.0

2008: 31.0

2009: 30.2

2010: 41.2

2011: 48.6

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