The role of product packaging and labeling has become quite significant as it is used as an efficient marketing tool to attract consumers, and also serves as a functional shipping container for goods.
Product packaging refers to the physical materials used to wrap or protect goods, whereas product labels are attached on the product package to provide information such as the manufacturer of the product, date of manufacture, expiry date, ingredients, how to use the product, and its handling.
Apart from the aesthetics, the packaging and labeling must meet certain legal requirements.
Product Label Requirements
Product labels must contain the following information:
- Name, trade name or description;
- Name and complete address of manufacturer/packer, importer, country of origin of the imported food;
- Net weight, number or volume of contents in metric units;
- Distinctive batch, lot or code number;
- Month and year of manufacture and packaging;
- Month and year by which the product is best consumed;
- Information about pharmaceutical and industrial products must be in English;
- If food products have been genetically modified (GM) this must be indicated in the label.
Consumer Protection Act (CPA) 68 of 2008
The purpose of the CPA is to prevent exploitation or harm to consumers by regulating the way in which businesses interact with consumers, and market their products and services. Product packaging and labeling must not mislead or deceive consumers, or make any representation about a supplier or any goods or services unless there are reasonable grounds for believing that the representation is true.
The CPA prohibits misleading trade descriptions, which includes any statement made in an advertisement, product label or product packaging, or any display of a supplier which describes the number, quantity, measure, weight or gauge of the goods advertised and/or referred to on the labels or packaging. An example would be that a supplier must not knowingly use a trade description that is likely to mislead the consumer as to any matter implied or expressed in that trade description, for instance “low fat” or “slimming”. The packaging and labeling must furthermore be in clear and plain language.
Product packages containing any hazardous or unsafe goods must have sufficient information advising the consumer of the risk of such goods. Should a consumer suffer harm due to unsafe goods, the supplier may be held liable without needing to prove negligence on the part of the supplier. The type of harm suffered may include death, injury, illness, loss of or damage to property, or any economic loss that results from any of the types of harm listed above.
Other Applicable Laws
In addition to the CPA, there are specific labelling requirements for various types of products. Some examples of specific legislation, regulations and standards include:
1. The Foodstuffs Cosmetics and Disinfectants Act and its Regulations, the Food Labelling Regulations (R146), and the Regulations Relating to Foodstuffs for Infants and Young Children R991, setting out specific labelling requirements for various types of foodstuffs;
2. The Agricultural Products and Standards Act and its regulations, which govern the labelling of agricultural products;
3. The Liquor Act and Liquor Products Act, setting out requirements for the labelling of alcoholic beverages; and
4. The South African Bureau of Standards, who have formulated a number of labeling standards which are industry specific, setting out the quality or standards specification marking for different products.
Permissible and Prohibited Words
Certain words and phrases have been banned from product labels in South Africa, such as “rich in”, “excellent source of”, “enriched with X”, “with added Y, and “contains Z”. Words and phrases that may still be used on product labels include “low”, “free”, “virtually free”, “high”, or “very high”. With food labelling, one must state “contains xx % fat” and not “x % fat-free”.
All descriptive words must therefore be cautiously chosen to ensure that no implied claims are inadvertently made and that descriptions are allowable in law.
RECOMMENDED ACCOUNTING SOLUTION FOR SMES
Tips for Suppliers
When packaging and labelling products, suppliers should keep the following in mind:
1. Ensure that the product labelling is not false or misleading.
2. Include a warning on all packaging in respect of unusual hazards which may be caused as a result of i.e. allergens, additives or colourants.
3. The consumer must be clear on what the intended purpose of the product is and that harm may ensue should the consumer not use the product for that intended purpose.
4. Before packaging and labelling is released for any product, it should be reviewed in terms of the applicable labelling legislation, regulations and standards.
