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Implementation of the ACVM Act: Regulatory changes

4 Advertising and promotion regulations

Advertising and promotion is the least-regulated area under the ACVM Act. As NZFSA has little information to go on, some of its proposals are more in the nature of options for discussion than fully-considered approaches. In brief, NZFSA is tentatively considering the merits of:

• requiring warning information to adequately reflect the significance of the regulatory warnings. This would be a new, more stringent requirement; it is contrary to current practice and would impose costs on some businesses.

• treating all communication practices concerning agricultural compounds as relevant to the risks specified in section 4, regardless of whether the party providing communication has a vested interest in the product or not. This approach may have implications for freedom of speech that will need to be taken into consideration.

In terms of more formal proposals around advertising and promotion, NZFSA proposes to make regulations that will:

• effectively apply the current requirements around advertising, promotion, and information transfer for registered products to both registered products and products exempt from registration. The impact on registered products will be very minor, but products that are exempt from registration will need to meet certain new requirements.

• require advertising and promotion to be consistent with each product’s authorisation. This reflects an existing expectation that parties should not make claims that are outside the scope of a product’s authorisation.

• impose an obligation on parties to support their products with adequate, reliable and readily available consumer information. There has always been an obligation under the ACVM Act to supply “adequate consumer information”, but no definition of what constitutes “adequate”.

• allow information to be communicated about off-label uses by third parties, with a prescribed obligation to warn potential users of the uncertainty, potential risks and consequential liability. This proposal effectively clarifies NZFSA’s current practice by putting it into regulations.

4.1 Use of terminology and definitions

The below terms and definitions are relevant to NZFSA’s advertising and promotion proposals. Some are currently in use, while others are proposed because existing terminology would be inappropriate or confusing. Where necessary, some of the below terms may be applied in regulations.

Scope of “communication” for the purposes of this paper

“Communication” includes the transfer of facts about products and the companies that supply them, as well as encouragements via advertising and promotion to purchase the products. Because all communications can pose relevant risks, they are all considered in this paper.

Advertising and promotion

“Advertisement” is defined in the ACVM Act as “any publication to the community or to any section of the community of any words, whether written, printed, spoken, or in any electronic form, or of any pictorial representation or design or device, used to promote the sale of any agricultural compound”. “Promotion” is not defined in the ACVM Act, but is understood to mean “encouraging parties to purchase particular agricultural compounds via advertising or any other type of encouragement including but not limited to offering special concessions on price, quantity or additional goods”. Both terms relate to communications that have as their primary intent the desire to sell products.

Information transfer

“Information transfer” is not defined in the ACVM Act, but it has been used by NZFSA in the past. NZFSA proposes that it means “to provide information (in any of the same forms listed in the definition of advertising) about agricultural compounds or about circumstances in which agricultural compounds are likely to be used”. While information transfer may influence purchasing decisions, that is not its primary objective. The aim is to educate or train people. Likely topics of information transfer include disease state awareness, animal/plant management potential, and alternative means of management.

Labelling product

The label is the primary and most immediate source of information about a product. “Label” is defined in the ACVM Act, and understood to mean “all the information provided with the product when it is made ready for initial distribution”. This includes:

• the immediate packaging

• any outer packaging

• any leaflet, flyers, pamphlets, and

• any other informational material provided with the product by the registrant/manufacturer for marketing (it does not include any additional informational material prepared by the wholesaler or retailer for distribution with the product).

NZFSA considers the label to be a fundamental characteristic of the product set at the time of manufacture. Consequently, proposals about regulating labelling can be found in the manufacturing section of this document. On the other hand, advertising and promotional information about the product is not and cannot be governed by the label content approval at registration (or any prescribed minimum labelling requirements for products exempt from registration). Such information, which includes television/radio or magazine advertisements, material prepared for sales campaigns, and in-store advertising prepared by third parties, is relevant to this section of the document.

Primary message

NZFSA considers that certain warnings should be part of “the primary message”, to make it clear that putting important warnings in the “small print” to meet minimum requirements does not give those warnings the consideration they deserve. NZFSA proposes that ”the primary message” mean “that part of a communication containing the essential information to be communicated and which is the focus of the communication”.

4.2 Current regulatory regime

All ACVM product authorisations can be issued with conditions that define the acceptable circumstances under which a product can be imported, manufactured, sold or used. All registrations have a condition that requires compliance with the relevant ACVM guidelines for labelling and advertising. When NZFSA considers a product or group of products for authorisation, it assesses the risks posed. The relevant areas to be considered are risks to:

• trade in primary produce

• public health

• animal welfare

• agricultural security.

Products are also assessed and managed to ensure that their use will not result in non-compliant levels of residues. The information to be provided with the product is also assessed to ensure it provides sufficient consumer information to allow the product to be used appropriately and safely. These assessments are carried out in the context of the product’s intended use.

Products that are exempt from registration have no regulatory controls placed on them with respect to advertising or information transfer. If they were advertised or promoted for uses that were not exempt from registration, such products would need to be registered.

Communications surrounding off-label use

The use of products that are available but not authorised for the purpose is commonly referred to as off-label use or minor use/minor species (MUMS). It is not the same as own use of generic chemicals or substances, which is discussed in the next section of this document. Communications about off-label use are usually made (or commissioned) by users or special interest groups, consultants, or even members of the public. Such communications are almost always outside the sphere of control of the person responsible for the manufacture of the product. Although a condition allowing off-label use is imposed on most product registrations, the labelling and advertising guidelines prohibit advertising off-label uses and, consequently, discourage the transfer of information on those uses. So while off-label uses are permissible, it is not possible to legitimately promote those uses. It is also unclear as to who must comply with the condition. It is obvious that a registrant must do so, but registrants do not usually promote off-label uses because of the associated liability that would be incurred if something goes wrong.

4.2.1 Negative effects

NZFSA is concerned that some communications may negate or reduce the effectiveness of the risk management mechanisms imposed on products in the form of conditions on authorisations. Products could be misrepresented in the marketplace, or parties could be encouraged to use them in an inappropriate manner. If a product is represented in a way not anticipated when its authorisation was issued, negative effects can include:

• non-compliant residues in food from animals or plants treated

• harm to animals or plants either via toxic/undesirable side effects or failure to work

• spread of diseases, pests or unwanted organisms

• development of resistance jeopardising animal, plant and human health

• restrictions imposed on New Zealand exports of primary produce.

These effects could cause significant personal losses and/or compromise New Zealand’s reputation as a trusted supplier of food and food-related products. They could also seriously damage the public’s confidence in the implied official assurances that authorised agricultural compound products are safe and reliable.

4.3 Proposed regulatory regime

NZFSA proposes to make new regulations that will largely reproduce current requirements for advertising, promotion, and information transfer. This will make the regulatory arrangements clearer. A key feature of the proposed new regulations is that they will apply to all products authorised under the ACVM Act, whether registered or exempt from registration. The impact on registered products will be very minor, but the regulations will set new requirements for products that are exempt from registration.

4.3.1 Warning information

NZFSA is aware that in some instances it is common advertising practice to do the bare minimum to meet statutory obligations. Warning information is often not presented in a way that would encourage the audience to think of it as important. For example, the warnings are placed in small print at the bottom of a communication, or delivered rapidly at the very end of the communication.

To address this practice, NZFSA is considering whether it would be appropriate to set a minimum requirement for warning information at a level that adequately reflects the significance of the regulatory warnings. NZFSA considers that, in principle, crucial regulatory information should be made as obvious as any other part of a communication about a product. However, it should be noted that this proposal would be contrary to current advertising practice. It would also create a new, more stringent requirement that would impose increased costs on some businesses.

4.3.2 Obligation to represent the product as authorised

NZFSA proposes that regulatory control should focus as much as practical on the desired outcome, rather than on specifying the arbitrary boundary between advertising and information transfer. No matter what the intent of the communication, products should always be represented in the market place in a manner that is consistent with the assessment that was the basis for their authorisation in the first place. Parties responsible for preparing products for market or for selling them should be made accountable for ensuring that products are always presented in a manner that is consistent with their authorisation. When advertising or promoting products, parties should not make claims for their products that are beyond the scope of their authorisations. Neither should parties represent their products in a manner that has not been adequately substantiated with reliable evidence, given the potential risks. In addition, parties should have an obligation to support their products with adequate, reliable and readily available consumer information.

4.3.3 Information transfer versus advertising/promotion

Current regulatory control under the ACVM Act is partly based on the boundary between advertising/promotion and information transfer, but that boundary is not clear.

Parties have often attempted to pass off advertising as information transfer. NZFSA has not formed a clear view on how best to manage this problem.

In NZFSA’s view, those who pay for responsible communications that encourage safe and appropriate use of products should benefit, through brand recognition or awareness of their products. Even where rigorous care is taken to avoid advertising/promotion, information transfer is likely to influence the audience’s purchasing decisions. It is when a communication’s intention is primarily to sell products that it should be considered advertising/promotion.

4.3.4 Obligations on parties with no vested interest in the products

Some parties who impart information about agricultural compounds may be promoting the products with no vested interest in them. They could be communicators (magazine editors, health care advisors etc) to the public in general or special interest groups. Such parties can misrepresent the products or impart information that is contrary to the authorisations of the products, or that nullifies the risk management role of persons recognised to control access to certain products (such as veterinarians or approved traders). This causes the same negative effects on risk management as would have prompted regulatory intervention, and even prosecution, if the communication had been made by parties who had vested interests in the agricultural compound.

The regulation making powers in the ACVM Act expressly state the power to make rules about how parties directly involved with importing, manufacturing, selling or using those products can carry out those activities, including the communication of information about the products. The ACVM Act is not so clear that communications by other parties can also be regulated; it could be argued that parties with no vested interest in products are outside the scope of the regulation making powers.

The ACVM Act does provide the power to make regulations for the purpose of any other matter relevant to the management of products, activities, or behaviours to minimise the risks specified in section 4 of the ACVM Act. It is NZFSA’s view that, in principle, all communication practices concerning agricultural compounds are relevant to the risks specified in section 4, regardless of whether the party providing communication has a vested interest in the product or not.

It should also be noted that this proposal may have implications for the freedom of speech guaranteed under the New Zealand Bill of Rights Act 1990. NZFSA is particularly interested in feedback on this proposal, as options other than regulations may be the most appropriate response to the issue.

4.3.5 Communication about off-label uses

One option is to prohibit any communication by any person containing information about a use that is not specifically approved in a product’s registration. Such a prohibition would not be practical and would certainly be breached on a daily basis.

NZFSA proposes to allow information to be communicated about off-label uses by third parties, with an obligation to warn potential users of the uncertainty, potential risks and consequential liability. Such warnings would need to be part of the primary message. NZFSA considers that the potentially significant implications of using products in a manner that has not been assessed must be made explicit and tied to the ability to take legal action against any person who breaches regulatory requirements. Consistently including warnings will be far cheaper than getting a use approved (which involves incurring significant costs associated with providing efficacy data and assessment).