Marketing functional foods in Australia - How to navigate the rules on health and therapeutic claims

16 September 2014 | By Frances Wheelahan (Partner)

Australia’s demand for functional foods is growing rapidly and there are many opportunities for businesses wishing to market these foods in Australia. However, the formulation, advertising and labelling of these foods is heavily regulated and care must be taken to comply with food and therapeutic goods laws.  

A “functional food” is generally any food or food component that may provide demonstrated health benefits or functions beyond basic nutritional functions. Examples of functional foods include foods fortified with vitamins and minerals such as juice, bread and pasta, margarine containing plant sterols and yoghurt with specific bacterial strains.

Demand for these types of foods is being driven worldwide by an ageing society, increasing prevalence of lifestyle-related diseases and growing interest among consumers in health and wellbeing.

The functional food market is particularly strong in Asia with growing opportunities for businesses operating in the Australian food industry. Japan, for example, has one of the largest functional food and beverage markets in the world with a reported market size in 2012 of approximately A$20 billion. Key factors driving consumer choice in the Japanese market are product efficacy, strong scientific substantiation for health claims, product safety, and general product awareness.


Step 1: Determine whether your functional food is a “food” or a “therapeutic good”

Determining whether your product is a “food” or a “therapeutic good” is a key first step. This will establish which regulatory regime applies to your product and how it can be formulated, marketed and labelled in Australia. This can sometimes be a complex issue.

Generally speaking, “therapeutic goods” are more heavily regulated in Australia than “foods”. So, our tip is to position your product as a food not a therapeutic good, if possible.

In Australia, the legal definition of “food” includes all the products you would normally expect to be foods as well as products like chewing gum, confectionery and beverages (including tea and coffee). But it does not include a “therapeutic good”.

Foods are regulated under state and federal food laws and are subject to the Food Standards Australia New Zealand (FSANZ) Food Standards Code.

The manner in which a product is represented (including the name and the packaging of the product) and the claims made in relation to the product are very important in determining whether the good is a “food” or a “therapeutic good”.

Under the Australian Therapeutic Goods Act 1989 (Cth), a “therapeutic good” is a good that is, or is represented as being, for a therapeutic use such as preventing, diagnosing, curing or alleviating a disease, ailment, defect or injury or influencing, inhibiting or modifying a physiological process in persons. A good will also be taken to be a therapeutic good where it is in a class of goods the sole or principal use of which is, or ordinarily is, for therapeutic use. On the other hand, a product for which there is a tradition of use in Australia or New Zealand as food for humans in the form in which it is presented will not be a therapeutic good.

The Therapeutic Goods Administration (TGA) may also make a declaration under the Therapeutic Goods Act 1989 (Cth) that a good or class of goods is, or is not, a therapeutic good.

The TGA is responsible for regulating the supply, import, export, manufacturing and advertising of therapeutic goods including medicines and vitamins and minerals.

Businesses wishing to market a product that falls within the definition of a “therapeutic good” (such as complementary medicines, vitamins and minerals) will need to comply with the more stringent requirements of the Therapeutic Goods Act 1989 (Cth) and the Therapeutic Goods Advertising Code. Business will also need to consider whether their product needs to be listed or registered with the TGA.

Step 2. Ensure the formulation of the food complies with the Food Standards Code

The formulation of a functional food must comply with all relevant requirements under the FSANZ Food Standards Code. Businesses looking to market a product as a functional food in Australia should closely consider the requirements in:

  • Part 1.3 – substances added to food (including the addition of vitamins and minerals);
  • Part 1.4 – contaminants and residues (including maximum levels of metal and non-metal contaminants and other toxicants in foods including fish, confectionery and other products);
  • Standard 1.5.1 – novel foods (which may include plant or animal extracts or microorganisms used as ingredients in another food);
  • Standard 1.5.2 – food produced using gene technology (only specified foods produced using gene technology may be sold in Australia); and
  • Standard 1.6.1 – microbiological limits in food (which specifies the limit on the presence of certain microorganisms in certain foods, including some seafood).

Step 3. Avoid making therapeutic claims

All claims relating to the effect of the functional food must be health or nutrition-related, as therapeutic claims are specifically prohibited in relation to foods. For example, a claim that a food “prevents heart disease” is not permitted under Australian law. Therefore, businesses looking to market functional foods in Australia relevant to cardiovascular disease should consider claims such as “may lower blood pressure” or “can help lower cholesterol”, as these would be more likely to be permitted high level health claims under the FSANZ Food Standards Code.

Step 4. Ensure that any nutrition content or health claims included on food labels or in food advertising comply with Standard 1.2.7

Food Standard 1.2.7 – Nutrition, Health and Related Claims sets out the claims that can be made on labels or in advertisements about the nutritional content of food (nutrition content claims) or the relationship between the food and a health effect (health claims).

Standard 1.2.7 also mandates the conditions under which nutrition content and health claims can be made. For example, a high level health claim that a food “contains calcium to reduce the risk of osteoporosis” may only be made in relation to a food that contains no less than 290mg of calcium per serving, must refer to the relevant population group (“persons aged 65 years and over”) and must be accompanied by a context statement (“diet high in calcium and with adequate vitamin D”). For more information on Standard 1.2.7, please see our publication here.

Again, businesses must avoid making therapeutic claims (claims that a product can prevent, diagnose, cure or alleviate a disease) or comparing a functional food with a product that is represented for therapeutic use.

Step 5. Ensure all claims made with respect to the functional food comply with the Australian Consumer Law

All nutrition content and health claims must be factually correct and be able to be substantiated (for example, through scientific research papers or clinical trials) to avoid misleading consumers in breach of the Australian Consumer Law.

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Frances Wheelahan

Partner. Melbourne
+61 3 9672 3380