Costco fined for mislabelling seafood origin

Costco Wholesale Australia Pty Ltd has paid penalties totalling $33,000 after the ACCC issued it with two infringement notices for alleged false or misleading labelling of the country and place of origin on lobster products and failing to comply with the Country of Origin Food Labelling Information Standard.

In early January 2023, Costco sold two packages of lobsters from its Casuarina warehouse in Western Australia which were labelled ‘Kirkland Signature PREVIOUSLY FROZEN WHOLE COOKED WA LOBSTER’ and ‘Australian Lobster’. Other packages were also displayed for sale with the allegedly misleading labels. In fact, the lobsters were imported from Canada.

The ACCC also alleges that Costco did not comply with the specific Country of Origin Food Labelling Information Standard because it used the Australian-made kangaroo logo as well as a full bar chart indicating that the lobsters were exclusively Australian when they were not.

“Selling goods with an incorrect country or place of origin label is a breach of Australian Consumer Law,” ACCC Deputy Chair Mick Keogh said.

“Many shoppers pay a premium to purchase Australian seafood rather than imported products, which makes the accuracy of the labelling a crucial part of enabling consumers to make an informed choice.”

“While a small number of consumers were impacted in this instance, this conduct involved a large and sophisticated business,” Mr Keogh said.

“This action by the ACCC is a reminder to all businesses, large or small, of the importance of ensuring that country of origin labelling is accurate and complies with the Country of Origin Food Labelling Information Standard.”

Costco is one of the world’s largest retailers and operates warehouse outlets in 13 countries. Costco operates 15 warehouses in Australia.

The Country of Origin Food Labelling Information Standard 2016 applies to most food available for retail sale in Australia, including food that is imported into Australia for retail sale.

The standard requires that if a product is grown, produced or made in Australia, the label must contain a ‘standard mark’ label which includes the kangaroo in a triangle logo which indicates the product is of Australian origin; a bar chart indicating the percentage of Australian ingredients in the food; and explanatory text which states whether the product was grown, produced or made in Australia.

In addition to the Country of Origin Food Labelling Information Standard, section 29 of the Australian Consumer Law also prohibits businesses from making false or misleading representations about the place of origin of the goods they supply to consumers.