TRADE MEASUREMENT ADVISORY COMMITTEE TRADE MEASUREMENT REVIEW OF THE UNIFORM TRADE MEASUREMENT LEGISLATION PROPOSAL FOR AMENDMENT AND REQUEST FOR COMMENTS AMENDMENT TO SECTION 25 OF THE TRADE MEASUREMENT ACT 1990 SPECIAL PROVISIONS FOR THE SALE OF MEAT October 2000

TRADE MEASUREMENT ADVISORY COMMITTEE

REVIEW OF THE UNIFORM TRADE MEASUREMENT LEGISLATION

PROPOSAL FOR AMENDMENT AND REQUEST FOR COMMENTS AMENDMENT TO SECTION 25 OF THE

TRADE MEASUREMENT ACT 1990

SPECIAL PROVISIONS FOR THE SALE OF MEAT

Introduction

Under a formal agreement signed in 1990 between the Commonwealth, the States and the Territories (except Western Australia), all jurisdictions, with the exception of Western Australia, enacted model uniform trade measurement legislation.

In 1995 a Trade Measurement Advisory Committee ("TMAC") was formed by the Ministerial Council on Consumer Affairs ("MCCA") and one of its functions was the ongoing review of trade measurement legislation nationally.

TMAC has recommended that the trade measurement legislation be amended to improve trade measurement administration and MCCA has requested that Queensland proceed with drafting the recommended amendments to the Queensland Trade Measurement Act 1990 ("the Act"). In the interests of uniformity these amendments will be used as the model by the other participating States and Territories to amend their own legislation.

Note: The numbering of the Act and Regulations in this document refers to the Queensland legislation. It may differ from that of other States and Territories.

This paper addresses one of the proposed amendments and is forwarded to your organisation for comment because of your involvement in the relevant industry. Only those amendments that relate to the operation of your organisation have been forwarded to you for comment.

This paper addresses the proposal to amend section 25 of the Act to repeal the requirement to sell meat in compliance with the special provisions for the sale of meat.

However, should you wish to comment on the other amendments to the legislation, please contact this Office so that a copy of the relevant consultation papers can be forwarded to you.

Other Amendments

The other amendments for which Issues Papers have been prepared are:

1. "Amendment to Section 28 of the Trade Measurement (Pre-packed Articles) Regulation 1991" - Section 28 of the Trade Measurement (Pre-packed Articles) Regulations 1991 should be amended by repealing the Table and requiring the products listed in sub-regulation (1) to be unit priced only when packed in random mass packs.

Section 28 should also be amended to remove the references to `fruit' and `vegetables'.

2. "Amendment of the Trade Measurement Act 1990 - Firewood" - The provisions of the Trade Measurement Act 1990 should be amended to make it a requirement to "stack" firewood for sales by volume. Definitions of "stacked" and "firewood" are also seen as a requirement. (This does not preclude firewood being sold by reference to mass or per load.)

3. "The Average Quantity System" - The Average Quantity System to be introduced into legislation and current shortweight provisions be repealed. This includes repealing "mass when packed" and "mass at standard condition" provisions.

4. "Amendment of the Trade Measurement Act 1990 and the Trade Measurement (Weighbridges) Regulation 1991 - Certificates of Suitability" - The Trade Measurement Act 1990 and the Trade Measurement (Weighbridges) Regulation 1991 should be amended to remove the separate requirement for certificates of suitability for public weighbridges and a requirement which incorporates the certificate of suitability as part of the licence be made.

5. "Amendment of Section 23(1) of the Trade Measurement (Weighbridges) Regulation 1991" - Section 23(1) of the Trade Measurement (Weighbridges) Regulation 1991 should be amended to make the provision of tare mass books optional.

6. "Amendment of Section 23(2), (3) and (4) of the Trade Measurement (Weighbridges) Regulation 1991" - Section 23(2), (3) and (4) of the Trade Measurement (Weighbridges) Regulation 1991 should be amended to allow for the electronic printing and storage of measurement tickets.

7. "Amendment of Section 19(b) of the Trade Measurement (Pre-packed Articles) Regulation 1991" - Section 19(b) of the Trade Measurement (Pre-packed Articles) Regulation 1991 be amended by deleting the existing words and replacing them with:

"(b) the total net mass of all the eggs in the package".

This would also require the deletion of the reference to eggs in section 18(1)(a) of the Regulations.

8. "A new section 15(1)(c) be added to the Act which states that the administering authority `may provide for certification periods to be set'.

"Section 15(2) of the Act be re-written so that it relates to the new section 15(1)(c) and states that the administering authority `may provide for the certification of a measuring instrument as often as is necessary or desirable in relation to specified classes of instruments'".

National Competition Policy

You are also asked to comment on the implications that the amendment to section 25 of the Act may have in terms of the National Competition Policy review of legislation. Under the Competition Principles Agreement signed by the States, Territories and the Commonwealth, it was agreed that existing legislation and proposed legislation would be reviewed in terms of its impact on competition in the relevant market. The Agreement provides that:

"The guiding principle is that legislation ... should not restrict competition unless it can be demonstrated that:

(a) the benefits of the restriction to the community as a whole outweigh the costs; and

(b) the objectives of the legislation can only be achieved by restricting competition".

The review that is to be conducted should:

"(a) clarify the objectives of the legislation;

(b) identify the nature of the restriction on competition;

(c) analyse the likely effect of the restriction on competition and on the economy generally;

(d) address and balance the costs and benefits of the restriction; and

(e) consider alternative means for achieving the same result including non-legislative approaches".

The specific issues that you are asked to address are set out in the body of this Issues Paper.

HOW TO MAKE COMMENTS AND SUBMISSIONS You are invited to make comments and submissions on the issues raised in this Issues Paper. You are also invited to contact the MCCA Secretariat to request information on the other amendments proposed to be made to the trade measurement legislation. Written comments and submissions should be to: Neil Power Executive Officer Ministerial Council on Consumer Affairs Consumer Affairs Division Department of the Treasury Parkes Place PARKES ACT 2600 Facsimile transmissions can be sent to (02) 6263 2960 Email can be sent to npower@treasury.gov.au Oral submissions can be made by telephoning Malcolm Bartlett on: (07) 3836 0409 Closing date for submissions is 30 November 2000

CONFIDENTIALITY

Unless there is an indication from you that you wish your submission to remain confidential, your submission may be subject to release under the Freedom of Information Act 1992 (Qld).

Background

Section 25 of the Trade Measurement Act 1990 provides:

"Special provisions for sale of meat

(1) A person who sells meat otherwise than at a price determined by reference to the mass of the meat is guilty of an offence.

Maximum penalty - $5 000.

(2) If the article sold as referred to in Section 22 is meat consisting of more than 1 cut, a written statement of measurement is not sufficient to comply with section 22(1)(b) unless it specifies the mass of each cut.

(3) A person who offers or exposes a quantity of meat for sale at a marked price for that quantity is guilty of an offence unless -

(a) the mass of meat is also marked in the same manner as, and as prominently as, the price marking; and

(b) the price per kilogram of the meat is also indicated as prominently as the price marking by a marking on the meat or by another statement in letters and figures not less than 10mm high that clearly refers to the meat.

Maximum penalty: $5 000.

(4) In this Section -

"meat" means so much of a slaughtered animal as is ordinarily sold for human consumption (whether or not after being subjected to a process of any kind) but does not include -

(a) the whole or any part of rabbit or shellfish; or

(b) heads, feet, hearts, lights, kidneys, brains or sweetbread; or

(c) meat packed as a prepacked article.

(5) This section does not apply to the sale (other than for the purpose of resale) of cooked meat sold on the premises on which it is cooked".

The requirement to sell meat by weight (mass) is long standing and is carried over from the former weights and measures legislation of the States and Territories into the model trade measurement legislation.

The requirement existed in times when meat was seen to be one of the few staple food items or necessities of life whereas today the concept of a staple food item is considerably broader and includes additional foods that are sold in direct competition to meat.

With the exception of prepacked articles, the uniform trade measurement legislation only requires meat and some nominated alcoholic beverages to be sold by measurement.

Section 25 does not apply to meat sold as prepacked articles. These are articles that are packed in advance ready for sale, for example in meat sections of supermarkets. Other parts of the legislation deal with the requirements for prepacked articles and are not the subject of this Issues Paper. No changes are being considered at this time to the requirements for prepacked meat which, with few exemptions, is on a weight basis.

The legislation, including section 25, equally applies to both retail and wholesale transactions. However, the main issues raised in this paper relate to retail transactions.

The word "mass" referred to in the section, and "weight" are interchangeable terms for the purposes of this paper.

Any changes to section 25 (including deletion) will not impact on a trader's responsibility to comply with all other applicable requirements of the trade measurement legislation including those relating to prepacked articles, the need to use correct weighing instruments and also to conduct transactions correctly.

Section 25(1) simply means that, other than the exemptions given later in section 25 and other articles that do not fall under the definition of "meat", sales of meat must be by weight with the price charged being computed from that weight.

Sub-section (2) refers to section 22 and in particular section 22(1)(b).

Section 22, relevantly, provides:

"Measurement must be open to scrutiny in certain cases

22. (1) If an article is sold at a price determined by reference to measurement of the article, the party that determines the price of the article shall ensure -

(a) that the measurement is made in the presence of the other party to the sale; or

(b) that the other party is furnished at or before the time of delivery of the article with a written statement of the measurement of the article."

Section 22(1)(b) means that, if an article is sold by measurement (in this case weight) and the purchaser is not present to see the article weighed, for example, if an "order" is collected or delivered, then an appropriate written weight statement must be supplied to the purchaser by the trader.

Regardless of whether section 25 remains in the legislation, a meat seller, in common with all other traders, has to comply with the requirements of section 22 for any sale by measurement. However, a meat seller currently has to comply with the additional requirement of also stating the weight of each meat cut contained in the "order".

Obviously if no measurement is involved in the transaction, no traders including meat sellers, have to comply with section 22(1)(b).

An example to illustrate the requirement of section 25(3) is in the case where meat is displayed in a butcher's shop window.

If the particular cut of meat is marked with a selling price then the weight and the price per kilogram must also be marked in the manner required by clauses (a) and (b) of this section.

The definition of meat is dealt with in section 25(4) together with the exemptions.

Similarly "value added" products, which are combinations of meat and other foods, are generally not treated as being meat. These products can range from "kebabs" and "beef Wellingtons" to "stir fry" combinations of meat and vegetables.

Section 25(5) is intended to exempt restaurants, fast food outlets and the like. However, if cooked meat is produced for sale elsewhere, that sale is subject to the requirements of section 25.

What are the arguments for repealing section 25?

· Generally, meat should be treated no less favourably and no differently under the trade measurement legislation than other food products. Government legislation should not be seen to result in disadvantages for one food type over another.

· There is diversity of opinion as to whether the definition of meat is intended to include competing foods such as fish and poultry. If these products are allowed to be sold by the piece without reference to weight, then the requirement could be seen as discriminatory and imposing unnecessary restrictions on sellers of red meat and pork.

· Many consumers have a fixed monetary amount they wish to spend on a meal or meal component. A mandatory reference to a price per kilogram can set an artificially high price impression in a purchaser's mind as opposed to a price per piece (or each). This can encourage consumers to unnecessarily buy alternative food products.

· A reference to price per kilogram does not permit a consumer to quickly work out how many slices or pieces of meat there are in a kilogram. This can lead to consumer embarrassment when items have to be taken out of the purchase order.

· There is consumer reluctance when purchasing whole cuts of meat, for example, legs of lamb when displayed on a "per kilogram" basis as opposed to an "each" price because the actual price is not easily ascertainable while on display.

· In some jurisdictions some sales on a per piece (or each) basis are being tolerated. Consumers appear to be happy to purchase in this way.

· Non-prepacked (bare) loaves of bread, which are also considered staple food items, are legally sold on an each basis and do not have to conform to any trade measurement imposed weight standard.

What are the arguments for retaining section 25?

· There have been no complaints from consumers about buying meat by weight. If section 25 were to be repealed consumers may be forced to purchase by the piece (or each) or buy prepacked if available.

· There have been no submissions from consumer organisations to repeal section 25. In fact, one organisation has recently initiated an inquiry into increasing consumer information on the shelf labels of supermarket general grocery lines. e.g. adding price per kilogram (or 100g) or price per litre (or 100mL).

· Consumers use price per kilogram and perceived quality as a measure of value for money. Repealing section 25 would eliminate a consumer quality measure because consumers would be unable to conduct a price per kilogram value comparison.

· Sales of meat by weight and price per kilogram ensures fair competition between individual butchers and between butchers and supermarkets. Thickness of a steak or size of a leg of lamb can vary so consumers' perception of the best value establishment on a per piece (or each) basis may be incorrect.

· The sale of meat by the piece (or each) which can be cut to vary in size or thickness is not comparable with, for example, apples which are graded into sizes or to chicken portions such as legs or wings which are also usually in graded sizes.

· Retail meat sellers currently expect to buy their wholesale meat supplies by weight. Some appear to be happy to do this yet they are asking for the right to choose how they wish to sell at retail. The consumer should also expect to purchase by weight.

· It has been argued that full meat cuts, legs of lamb, for example, have to be sold on a weight basis and that makes it difficult for a consumer to ascertain the actual selling price while the meat is on display. There is nothing to stop the seller showing the total price of each leg of lamb to assist customer choice. Section 25(3) provides for this.

· Consumers have often based their purchasing strategy around meat being sold by weight. When they have made the decision to purchase a particular type/cut of meat, the advertising and sale by weight and price per kilogram allows the consumer to make a value judgment not only between butchers but also by comparing the "over the counter" price with the price of competing prepacks.

· Meat is still considered a leading staple food item, if not the leading staple food item by many Australians. If section 25 is repealed leading to sales of meat per piece (or each) it is likely that sellers of competing staple items who are voluntarily selling by weight and price per kilogram would alter their trading methods to a per piece (or each) basis.

What is the likely result if section 25 is repealed?

If section 25 is repealed a meat seller would have the option of:-

· Continuing to sell on a "price per kilogram" basis; or

· Sell selectively on both a "per piece (or each)" basis and a "price per kilogram" basis; or

· Sell completely on a "per piece (or each)" basis.

Compliance with the prepacked articles regulation and other requirements that are applicable to all traders would still be required.

What is the likely result if section 25 is retained?

Meat sellers would have to continue to comply with section 25 or risk legal action.

It may also be necessary to:-

· redefine the meaning of meat; and

· specifically define what is meant by "value added"; and

· canvass the possibility (by public comment) of extending the special provisions in section 25 to cover, where applicable, other staple food items such as fish, poultry and fruit and vegetables etc.

Is there anything else that should be considered?

Trade measurement legislation is basically fair trading legislation involving weighing and measuring in trade situations.

The legislation should not restrict business practices and at the same time the interests of consumers must be considered and protected.

You are asked to comment on the amendment. In particular your comments in relation to the following questions are welcomed:

1. Should section 25 of the Trade Measurement Act 1990 be amended as described? Why do you think so?

2. Will the amendment as described have any impact on you whether you are a trader or a consumer?

3. If it is considered that the amendment will impact on you, can you describe the potential costs to you as either a trader or a consumer?

4. Are there any potential restrictions involved in the proposed amendment?

5. If there are considered to be any restrictions, will these restrictions involve any cost or disadvantage to you either as a trader or consumer?

6. Will the proposed amendment have any impact on competition in the market place in which you either trade or purchase meat? If so, what impact would it have?

7. If there are considered to be any restrictions, do they influence the quality or quantity of red meat you produce or purchase?

8. If this restriction is lifted, what types of meat or meat products would you be interested in offering for sale, or purchasing by the piece?

9. Would lifting this restriction offer you, as a trader, any advantage over other traders?

10. If you are a trader, would lifting this restriction impact on your ability to purchase from wholesalers?

If you are interested in participating in follow up consultation on these issues, please provide us with a telephone number where you can be contacted during office hours.