What is traceability?

Over the last few years, the word traceability has increasingly appeared in the media, in advertising and in regulations around the world.

Thanks to the global media attention surrounding the UK mad cow epidemic and the more recent food safety incidents, we have seen even greater use of traceability in the world's Market place.

Hearing the word "traceability" in these well publicised scenarios may create greater awareness of the term - but what is our actual understanding of it?

The word traceability means many different things, depending on the audience. Lets take a look at what traceability means to different groups.

What does traceability mean to consumers?

Fuelled by media speculation and reports surrounding the international food incidents - consumers have come to expect that the source of their food is known and they are able to readily trace their source to the Country and farm of origin. However, Industry research indicates individual consumers actually do not want to know the farm the produce originates from - their expectations are that it is safe, fresh and from the country of origin as described.

Due to the geographical nature of the exporting industry there are many different consumer groups to consider. For instance, the mass demonstrations in Korea over importing US beef, where the demonstrators were demanding only young beef be imported. These consumer groups were led to believe claims that younger beef has a lower likelihood of carrying mad cow disease.

A few years ago the incidents of substitution of Japanese beef with imported beef resulted in a major scandal bringing on government action culminating in the resignation of some Private Sector Senior Managers.

Japanese imported food products are often considered to be inferior to the Japanese grown products. In summary the meaning on traceability to consumers is largely driven by the media and consumer lobby groups, not by individual consumers.

What does traceability mean to retailers?

Retailers are generally classed as either small independent retailers or supermarket chains. The small retailers may choose to market certain products by origin, using farming areas or groups as a marketing tool on a product-by-product basis.

However the internal supply chain systems which exist for fresh produce and meat does not readily provide specific traceability information. At best, a sealed carton of meat or fresh produce may show the processor or packer. It does not supply information defining how many hands or the cold chain security the carton has travelled. The issue is that once opened and placed on display, the traceability link back to the carton is lost.

Larger supermarket chains have more structured supply chain channels in place, but once product hits the store's loading bay, any traceable information is rapidly lost. In-store packed meat may come from a number of different cartons and sit on the shelf for the period of the display life.

In summary, for Retailers, traceability is two things:

  • a recognised marketing term and
  • the broad mandatory regulatory product recall protocols outlining the procedure to be followed if a food safety incident occurs.

What does traceability mean to international buyers of Australian produce?

The meaning of traceability to international buyers varies from country to country.

The Japanese Market

Japanese commercial buyers view traceability as a very important market access tool. There must be traceability to satisfy consumer perception of traceability, in addition to the regulatory compliance issues. Ensuring there is a traceability system in place is necessary for the Japanese market.

The US Market

The US market has undertaken some changes in regulatory requirements for:

  • country of origin labelling requirements
  • and high level of bio-terrorism requirements.

The driving force behind this is the reassurance that the products have not been subject to adulteration or terrorist contamination at any stage of the supply chain. Additionally, there is the routine residue and pathogen testing of imported product.

Together these requirements mean traceability systems for product are necessary for market access. In the US, the traceability focus in reality commences from processing plants, through the supply chain to inspection facility - not specifically to the farm of origin.

The EU Market

The EU market is heavily regulated and requires specific Australian government and EU Auditor inspected traceability programs to be in place to achieve access to the EU market. Once in the EU market, the requirements for traceability relate to regulations on labelling. This means the consumer is not driving the demand for traceability - rather the EU regulation is driving the traceability systems.

There is the one up/one down regulation that states:

  • all products going into the food ingredients must be known and recorded by batch and
  • the destination of the batches of food produced must be known and recorded.

The one up/one down rule and the labelling requirements in the EU are so stringent there are no longer home-made produce available at fairs and fetes, as this would be a breach of the EU regulations.

Buyers in the EU must ensure produce from Australia has all the necessary regulatory compliance evidence for traceability.

Other international markets have varying degrees of the above three models of consumer drive, bio-security drive and labelling driven traceability.

What does traceability mean to Australian Processors?

The processing sectors in Australia can generally be broken down in two groups:

  • the domestic market sectors and
  • the export market sectors.

Domestic Market Sectors

The domestic market sectors must comply with state based requirements for traceability. These requirements vary from state to state. In addition to the state requirements are the harmonised requirements for compliance to the food recall protocols. Supermarket chains also have their requirements. However, often, the supermarkets purchase from export processors.

Australia also has country of origin labelling laws, but for many further processed produce and meat products, proving substitution is very difficult.

Export Market Sectors

Export processors see traceability as a regulatory compliance requirement as well as an export customer requirement. Regulatory compliance for traceability requirements differ for different species and products. Beef has the NLIS (National Livestock Identification Scheme) ear tag system and LPA (Livestock Production Assurance) and the LPA NVD (National Vendor Declaration) for livestock. Sheep and goats also have LPA NVD requirements and pigs have PigPass NVD requirements to the point of slaughter.

Once livestock is slaughtered the systems for traceability then become plant based not industry specified. How this is applied in each plant varies greatly, the minimum being meeting the inspection requirements of AQIS as well as export market auditors that may audit from time to time. For EU meat products there are additional livestock supply and processing requirements for segregation of EU and non-EU product.

Supermarket chains, numbering/ bar coding standards bodies and meat industry bodies have developed industry guidelines for the numbering and bar coding of carcases and carton to global standards. When correctly utilised, this method provides a level of traceability for the carcase or carton back to the processor, date of production and serialisation of the production unit (carcase or carton).

A number of meat processing plants in Australia have implemented a wide range of traceability systems from slaughter through to carton product. These range from simple, single body boning systems to very complex cut track systems. There are many different products derived from a carcase, such as trimming, offal, by-products, hides/ fleece, as well as the primal cuts. Most of the individual carcase tracking to carton traceability systems only address primal cuts and ignore the other products.

When are the traceability systems actually used?

The adoption of these collective traceability systems raises the question:

Will the traceability system actually be used by the

  • importing country regulatory authority,
  • importer,
  • distributor or
  • consumer?

Evidence to date indicates that traceability systems are rarely used. If the system is used, it is often only by the exporting marketing function of a processor or exporter, who utilise the traceability systems to demonstrate to potential new buyers that the traceability system is real and operational and can trace from the farm to the importer.

Should a residue or pathogen detection incident occur in an overseas market, the Australian processor is often locked out of that market as a standard response by AQIS and the importing country. If the issue is minor only the product along with the rest of the identified consignment may be rejected. The ability to clearly and legally trace back the offending product to the production batch, companion products and the property where the livestock was sourced would be essential for that processor to re-enter the market. In this scenario, traceability for the processor is insurance to minimise the time taken and its ensuing costs, to re-enter a market after a residue or pathogen detection.

Processors that are part of an integrated supply chain can benefit from incorporating traceability systems where product quality or other commercial attribute information can be collected at processing and passed back along the supply chain. In this scenario traceability becomes a viable, commercial tool to improve product compliance to market requirements and minimise production costs in the event of a pathogen or detection incident occurring.

In summary, traceability from a processor's perspective, changes depending on the markets and the level of supply chain integration. For a service works (slaughtering on behalf of someone) for the domestic market, traceability is one of compliance for market access, not one of creating a real commercial advantage.

Export processors or non-service works, must have the minimum traceability requirements for the selected domestic or export markets to gain access to the markets. Having a higher level of traceability may provide a small niche market advantage but this may be very hard to quantify based on the price competitive nature of the global commodity produce markets. However, traceability as insurance and/ or a supply chain performance improvement tool can provide very important business functions.

What does traceability mean to Australian producers?

For livestock there is the statutory NLIS system which, for beef, includes an individual electronic ear tag. The NVD systems apply to sheep, goats, pigs as well as beef. These systems provide a traceability function for the movement of livestock through to the point of slaughter. Their primary objective is the control of disease outbreaks spreading. If a disease outbreak occurs, the movements of livestock will be known, which will ensure being able to manage the spread of the disease.

The second function of the traceability systems is the identification of the source of residue affected livestock. There is the national residue survey program that collects samples at slaughter to conduct residue detection testing nationally.

The above requirements are regulatory requirements being a mix of federal and state administered regulatory frame works.

For the EU specific markets there are additional levels of segregation control above the non-EU livestock.

The commercial implementation of traceability for producers is again one of market access and compliance to regulation. Having a better system for traceability than a competitor may at best provide a niche market advantage. There is little pricing difference available to producers based on differentiated traceability other than minimum market access requirements.

What does traceability mean to Australian Regulators?

Regulators exist at the state and federal levels. The primary drivers for traceability relate to market access requirements as well as lobby group pressure to address specific areas of traceability with high media interest. Implementing additional regulations for traceability above the minimum for market access will result in additional costs to industry that may not apply to global competitors.

The departmental structure of government results in regulation at different sections of the supply chain and with different focus.

State primary industry and natural resources departments address traceability at a livestock level to the point of slaughter. The drivers for primary industry regulation are to manage disease outbreaks as well as residue status management.

State food safety authorities manage the processing sector for food safety which also has a traceability requirement in terms of mandatory recall protocols.

At a federal level there is AQIS (Australian Quarantine Inspection Service) which focuses on regulation and inspection services to the export processing sector to meet the importing country requirements.

The collective state and federal drivers define the traceability requirement applied to industry by the regulators to be that of minimum compliance for market access and lobby group/ media requirements. For livestock there is the additional requirement of disease containment management.

What are the possible legal implications of traceability?

Traceability information and evidence may have far reaching legal implications that may not be realised at the time the traceability system is implemented.

These issues must be fully understood and addressed to ensure that the use of the term traceability is as intended by the organisation that may have implemented a traceability system.

The accuracy of the databases of traceability information is a complex issue. What happens when a regulatory issue occurs in a domestic or export market and the product is incorrectly linked to a processor and/ or producer? Innocent parties suffer financial loss while the real source of the issue continues to supply product to the market. What recourse may the injured party have where the database, information and/or evidence are an industry or government owned or controlled system?

What are the implications when traceability information or technology identifies, from a piece of meat, a processor as the source of meat from livestock from a specific producer? What happens when the issue relates to a different processor that killed livestock from the same identified producer? The traceability technology/ system identified the livestock source but can not identify the specific processor.

Who is able to instigate a traceback and under what circumstances? How is the information that is found able to be used?

Can a consumer buying some product at retail, have the product tested and the testing shows that the product breaches some national statutory requirement, use traceability information/ technology to identify the processor and/or producer, and give the information to a responsible authority?

Who owns the traceability information and/ or evidence that may have been collected over time? Is it the organisation that collects the information or evidence? Is it the producer? Is it the processor? Is it the owner of the meat product? Is it the holder of the data or evidence? Is it the government authority where the information or evidence is for the purpose of public good?

Who may have the rights and authority to legally obtain, from second or third parties, traceability information and/ or evidence that have been collected?

What regulatory restrictions may be applied to organisations that won’t supply traceability information or evidence related to processors and/ or producers?

In summary, what does the term traceability mean?

From the above discussion, traceability can be seen to mean many different things to different people. Operationally, traceability means different things when applied at different levels of the supply chain, to different products and to different markets.

Traceability information or evidence may have legal implications, far beyond the original traceability intentions. Should a traceability system be sufficient to trace a piece of produce (meat, dairy, eggs, fish, etc) at consumption back to a farm or fishery, then the producer may be held legally accountable.

There is no one meaning for the term traceability that can be readily applied to all industry sectors and products.

At best, the meaning of the term traceability is something agreed upon between a buyer and seller while meeting minimum market access requirements. The terms "buyer" and "seller" apply equally to international trading organisations right through the supply chain, to the sale of a product to a consumer by a small independent retailer.