China's counterfeiting crisis hurting Aus producers

Parliamentary Secretary to the Minister for Agriculture, Senator Richard Colbeck, told the 2015 Agribusiness Outlook Australia conference that unsafe product being labelled as Australian would damage the country's reputation.

"It is a form of flattery for Australia - the quality is recognised for the product but it is also a threat (that could) quickly damage our brand," Senator Colbeck said.

"Counterfeiting in China is a real problem, one the Chinese know they need to deal with a thorough regulatory and enforcement framework.

New laws introduced in China last year which aim to increase protection to trademark owners appear toothless, as widespread counterfeiting affecting Australian brands was discussed at the forum.

"One of these was fourth-generation orchardist Howard Hansen, Hansen Orchards, Huon Valley, Tasmania, who said fruit-growers estimated that for every one kilogram of Tasmania cherries exported to China, five kilograms were being counterfeited.

"It is becoming more common - they are copying our package precisely and selling a product that is from another part of the world packaged as a Tasmanian product."

For the past two years Hansen Orchards' Chinese exports have been worth $3 million, and with the potential growth from the Australia-China Free Trade Agreement Mr Hansen said counterfeiting was part and parcel of the exporting business.

"Every year for the past 10 years, every brand we have has been counterfeited in China," he said.

"Ralph Lauren can't stop them copying handbags nor TAG Heuer's watches - it is not an issue unique to Tasmanian fruit-growers.

"Every brand represented in China's market is at risk, despite what the product is."

Combating product imitation is proving an enormous challenge for export businesses.

With traceable technology not yet available, Mr Hansen said Tasmania fruit growers were relying on educating their Chinese customers.

"Tasmania products are really only available for six weeks so a lot of the counterfeiting products are being sold out of our season," he said.

"We keep our customers informed about when the season is so they know if there are Tasmanian cherries being sold in November they are not authentic Tasmania cherries because our season is January and February."

The risk of brand damage was highlighted mid-2013 with Fonterra's botulism scare making a significant dent in New Zealand's exports to China.

"No doubt (a food crisis) would risk Australia's brand," Mr Hansen said.

"All the Australia Government can do is control what leaves Australia's shores."

AUSVEG export development national manager Michael Coote said ag bodies should be concerned foreign operators were attempting to pass inferior and potentially unsafe product off as Australian brands.

"Given the dire state of food production standards in China, the last thing we need is a food safety incident involving counterfeit Australian produce in that country to be blamed on genuine producers here," Mr Coote said.

"It is imperative that the relevant international authorities act now before Australian vegetable and potato exporters become the unwitting victims of these appalling scams."

Another victim of product counterfeit is David Blackmore, Blackmore Wagyu, Alexandra.

In 2013 a head chef for a five-star hotel in Shanghai who used Blackmore Wagyu Beef notified the company when he noticed the product quality had changed.

Mr Blackmore said it was a sophisticated counterfeit of their packaging with substituted meat that could not be traced to an origin or meat type.

As a result the company now places a food-safe plastic insert with a traceable code and the brand name printed in ink inside the packaging with the meat before it is cryovac-sealed.

The company has also reduced exports to China to avoid its reputation being damaged and uses one distributor to manage sales to top restaurants.

"You need to protect your brand and reputation as far as you can," he said.