New innovative food products not permitted for use

What you need to know

• If you want to use or supply a novel food, or a processing aid, food additive or other substance not currently approved for use, you must apply to amend the Australia New Zealand Food Standards Code.
• In some cases, the Code can contain inconsistencies or ambiguities, and businesses may have to choose between risking being in breach of the Code or taking steps to amend the Code to address the inconsistency.
• Amending the Code is a significant step, but is an option available to all food businesses and can provide significant commercial advantages. This article explores the key pathways for amending the Code, as well as some tips and traps along the way.

What you need to do

• If an important ingredient or substance you would like to use is not currently permitted for use, consider the costs and benefits of applying to amend the Code.
• A food business applying to amend the Code should closely follow FSANZ's guidance and obtain specialist advice for preparing the application. 

The Australia New Zealand Food Standards Code

Background

The Australia New Zealand Food Standards Code is comprised of a number of standards that establish a uniform scheme for the regulation of foods and food businesses.

The Code itself is made up of an intricate combination of standards which combine legal concepts and technical scientific matters. The structure of the Code, with exhaustive lists of permitted substances, is also inherently "reactive". This means the Code regularly needs to be updated.

As a result, the Code can sometimes contain ambiguities. For example, until the Code was amended in March 2019, steviol glycosides could be used as a food additive in "fruit juices" or "water based flavoured beverages" but not "fruit drinks". Fortunately for food businesses, the Australian Beverages and New Zealand Beverage Councils jointly applied to amend the Code to successfully address this issue (Application No. A1149).

How does the Code work? 

General prohibition unless expressly permitted

The Code establishes a general prohibition on the use of ingredients, or components used as food additives, nutritive substances or processing aids unless expressly permitted.

The Code sets out what is permitted in defined categories and the nuanced definitions in the Code must be carefully assessed on a case-by-case basis to determine which (if any) apply.

Processing aids, food additives or nutritive substances

FSANZ, on application or by its own proposal, may amend the Code to permit the use of new:

• processing aids, for example FSANZ recently permitted the use of an enzyme from a genetically modified strain of bacillus licheniformis (a microorganism with a significant history of use in industry) in the production of alcohol (A1206);
• food additives, for example, FSANZ recently permitted the use of rosemary extract as an antioxidant (A1158); and
• nutritive substances, for example, FSANZ recently permitted the use of soy leghemoglobin in meat analogue products on application from Impossible Foods (A1186).

Amending the Code is required for any new substance, because the definitions of substances used as processing aids, food additives or nutritive substances each include a requirement that the substance be listed in a Schedule to the Code.

Novel foods

The Code can similarly be updated to include "novel foods". For example, in December 2020 FSANZ approved an application to include rapeseed protein isolate as a novel food for use as a protein source in foods (A1175).

The rules governing "novel foods" provide the primary protection for "new" foods. The definition of novel food in the Code turns on the history of use of the substance, and FSANZ's consideration of whether it presents a material issue from a public health and safety perspective.

If the definition does apply (noting that this can be difficult to assess because it includes FSANZ's opinion) the novel food must be listed in Schedule 25 of the Code before it may be used in foods for retail sale. This means new novel foods must be added to the Code by amendment.

Businesses that apply to amend the Code to include a new novel food can request a 15 month exclusive permission to sell the novel food (if approved), as a condition of the amendment. This provides a significant first-to-market advantage for businesses that have undertaken development work in the area, and which take on the cost of amending the Code. After the period of exclusivity, the permission reverts to a general permission that allows the novel food to be used by any person.

Pathways to amend the Code

There are two ways the Code can be changed: Proposals – which are made by FSANZ itself, or Applications – which can be made by any person.

A business that wants to use a new ingredient in food products (including a novel food), or a new substance in a food production process, must make an application to FSANZ to amend the Code under ss 21 to 53 of the Food Standards Australia New Zealand Act 1991 (Cth).

FSANZ has published detailed guidance to assist applicants in following this process, including guidance on the information that must, or should, be included in any application. FSANZ also invites applicants to discuss the proposed application with FSANZ prior to submission.

Application process

Applications to amend the Code are subject to an initial administrative assessment by FSANZ to determine if the application meets the mandatory requirements.

Applications will then be assessed by one of four procedure types which have different processes and timeframes. The general procedure is the default assessment process and includes a range of levels which determine the fees payable.

Timing and fees

An application to amend the Code may not attract any official fee from FSANZ. However, if either:

1. the applicant would receive an exclusive capturable commercial benefit (ECCB) if the application were accepted; and/or
2. the applicant requests the application be expedited, the applicant would need to pay an application fee, which can range from A$57,000 to A$195,000 (or more). Only one application fee is charged (that is, the fee is not doubled if both triggers apply).

Without requesting expedition, there is currently a 9 to 12 month delay before FSANZ would commence its substantive assessment. With a request to expedite, this is around 1 to 3 months.

Once FSANZ commences substantive assessment, the process for the general procedure takes 9 months to complete. This includes a period for public consultation (typically 6 weeks). Assuming the application is accepted, further steps are required for actual amendment of the Code, such as Ministerial approval, public notification and gazettal.

It is also possible to keep some aspects of an application confidential until later stages of the process.

Conclusion

Applying to amend the Code is a significant undertaking, and should only be done after careful consideration and with specialist guidance. However, it may provide significant commercial benefits to food businesses that can achieve a competitive advantage through innovation, or by removing obstacles presented by unintended positions in the Code.

Authors: Lucinda Merrett, Graduate; Tim Rankin, Senior Associate; Joanna Lawrence, Counsel; and Kellech Smith, Partner.