You are establishing a business in one of the following industry sectors:
- Travel Agency and Distribution
- Passenger Transport
- Traveller Accommodation
- Food and Beverage
- Activities and Attractions.
Your task is to explain in regard to that business the implications, key factors, and issues you need to be aware of to operate the business in terms of Hospitality Business Law.
Your report and presentation must cover the following:
- Identification of industry sector and explanation of business
- Identification and explanation of the laws relevant to the various business activities
- Highlight major areas of potential legal concern for the business
- Exploration of case and/or common law example of breaches of the law and the implications for businesses in that sector
Your report should be based on information obtained from the prescribed text (Atherton & Atherton 2011) and any other relevant academic resources.
Hospitality Industry of Australia is wide, as it includes the categories that provide accommodation, food and beverages, hotels, pubs, etc. This sector is growing steadily over the past five years and this growth is accompanied with the factors such as growing foodie culture. All these factors ultimately enhance the popularity among individuals in terms of setting business in the hospitality sector (AISC, 2018).
The main aim of this assignment is to understand the laws which are important in terms of conducting the business in Food and Beverages industry of Australia. In this legal responsibilities are identified, implications of breaching the law are explored, and the impact of legal decisions on the business operations are accessed.
Structure of this assignment includes the identification of the food and beverage industry and also the explanation related to business, identification and explanation related business laws which are important for different business activities, major areas of potential legal concerns for the business, and any example of the breach of law. At the end, brief conclusion is stated in terms of concluding the agreement.
This section of the report describes different legal aspects related to the Food and Beverage industry of Australia in terms of conducting business operations within this industry.
Industry & Business Explanation:
Food and Beverage industry of Australia covers wide range of food and grocery products which are consumed in Australia such as processed meats, dairy products, beverages, fruits and vegetables, cereal products, flour, bakery products, sugar confectionary, sea food, and pet food. This industry ranges from producers of fresh, natural, and organic products to the producers of the manufactured foods such as ready-made meals, confectionaries, additives, and nutritional supplements.
This industry attracted the business of all types and sizes, which means, it is possible to accompany the hospitality business with the food and beverage industry such as cafeterias, airlines, restaurants, dining halls, etc. Following are some important highlights of the Food and Beverage industry in Australia:
- In the year 2018, this industry reflects the revenue of almost US$ 1165 million, and it is expected from the revenue that it showed the annual growth rate of 17.3% (CAGR 2018-2023). This growth resulting in the market volume of US$ 2582 million by the year 2023.
- User Penetration of this industry is almost 17.5% in the year 2018 and it is expected to hit 21.2% by the year 2023.
- The average revenue per user of this industry is presently amount to US$ 268.59.
- While comparing this industry across the globe, maximum revenue is generated in China that is US$ 18521 million in the year 2018 (Statista, 2018).
Inch Kin café is the business organization which engaged its business in the Food and Beverage industry of Australia. This organization serves gourmet coffee to its customers and it is accompanied with the pastries and other food items such as Pizza, burger, sandwiches, etc. This restaurant is dream place for all the people who want to enjoy their coffee with the tasty snacks. Inch Kin also offers some other beverages also such as mocktails and other cold beverages. This café adopts the culture of aboriginal Islanders of Australia and its interior also reflects the historical culture of Aboriginal Islanders.
This restaurant is established after analyzing the growing demand of coffee in Australia. There are number of local peoples and tourist who enjoy the culture and coffee of this café. Following are the key attributes of this café-
- Store design of the café is attractive and different, and reflects the culture of historical traits of Aboriginal Islanders.
- Best gourmet coffee, relaxing environment, and food that satisfy the taste buds of the consumers.
Identification & Explanation of Laws:
The food authority of NSW and local councils work together at the level of retail business for inspect the cafés, restaurants, and retail food outlets at regular basis in terms of ensuring that all these business organization complied with the Food Standards code. Following are the legal obligations which need to be complied by Inch Kin in terms of opening the café in Australia (NSW):
- All these business organizations are under obligation to notify the local councils about their business activity and food activity details. Notification in this context can be done through applications, permits, and approvals.
- Further food business needs to comply with the regulations stated under the Food Standards Australia New Zealandand the Australia and New Zealand Food Regulation Ministerial Council. It must be noted that, food regulations are applicable on each stage of food and beverage production.
- Standards 3.2.2 under Food Safety Practices and General Requirements (clause 3) (FSANZ), states that owners need to ensure all those individuals who handle food or food contact surfaces must hold the required skills and knowledge.
- The Food Safety Act 2003 in pose obligation on owners to have at least one trained safety supervisor, and this supervisor needs to get training of particular units of competency under the national vocational educational training system (Food Authority, 2018).
- All the food business organization needs to design their cafes and construct them in such manner as it satisfied the Food Standards Code 3.2.3 (Food Premises Equipment). It must be noted that Australian Standard AS 4674:2004 – Design, construction and fitout of food premises, is the method which can be used for compliance with the Food Standards Code and it is generally considered as requirement as a condition of local council development consent (Federal Register of Legislation, 2003).
- Café needs to ensure the regular inspection by the officers of the local council. Inspections assess the compliance against all the food safety standards under the Food Standards Code. Inspection of the café mainly covers the physical conditions of the facilities, process for handling the food, and food safety skills and knowledge of all those who handle the food (Food Authority, 2018).
- Business is also under obligation to ensure that all the food safety standards are compiled and other applicable laws are also compiled by the café.
Major Areas of Legal Concern:
Major areas of legal obligations considered by Inch Kin café is the food safety standards and obligations of café related to food safety. Inch Kin needs to comply with the FASNZ, NSW Food Act 2003 and the NSW Food Regulation 2015 (Santacruz, 2016). Following are the important regulations which must be complied by the café:
Health and safety regulations- Owners need to ensure that food handlers or any other person must not contaminate the food. In this context, separate utensils must be used by the business for raw and ready-to-eat products, and if not then all the utensils used for raw food must be cleaned and sanitized before they are used for ready-to-eat meals.
Food business owners are also under obligation related to the health of the people, which means, in case food handlers are ill or have any specific symptoms such as fever, vomiting, diarehea, etc. must not be allowed to handle the food after 48 hours after the end of these symptoms.
It must be noted that all these requirements related to Health and Hygiene are stated under Chapter 3 of Food Standards Code (Standards 3.2.2- Division 4).
Cleaning & Sanitizing- Requirements related to cleaning and sanitizing are stated under Food Safety Standards (Clause 19- Standard 3.2.2). Cleaning and Sanitizing are two different issues and must be dealt in different manner. Food premises, including fixtures, fittings and equipment must be maintained in clean condition and all the food contact surfaces must be properly sanitized (Food Authority, n.d.).
Food handling Controls- Standards 3.2.2 of the Food Safety Standards (Division 2) defines the provisions related to the handling of food. It is expected from the food business to take all the required measures to ensure that food is not unsafe and unsuitable. In other words, they must ensure that food received by them is not contaminated, can be easily identified while it is on the premises, and is at the right temperature.
Legal Obligations related to Food Safety and Hygiene
Owners must ensure that they only use Food Grade Packaging and containers in terms of storing the food.
Re-usable containers- Food handlers are under obligation to accept the dirty re-usable containers of the customers for giving food to them, even though this practice is good for the environment (FSANZ, 2016).
Breach of Law:
The NSW Food Authority recognized the decision related to Wollongong Local Court on 15th February 2017 in terms of imposing fine on the director and general manager of Unanderra business ‘Bettamaid Fundraising’, known as Bettamaid in terms of four offences related to the breach of Food Standards Code. On 23rd January 2017, Mr. Boschan was held guilty in terms of executive liability offences under section 122 of the NSW Food Act 2003.
This section consider the consequences for failure to comply with the Food Standards Code related to the collection of garbage and waste, dirt and other visible matter, failing in maintain the premises and related fixtures in good manner, and must prevent the pests from entering the premises. In failure of the compliance of Food Safety Standards, Mr. Boschan was sentenced and Fined for $3600.
In April 2016, fundraising of this organization was fined up to $63000 (extra $ 20000 for professional cost) in terms of selling the unsafe food and failed to compliance with the general requirements of hygiene stated under the Food Safety Standards. This organization supplied different facilities with the bakery products, and all these facilities and products were contaminated with the rare stain of salmonella, and this similar strain was found at the aged care facilities. In this context, food authority of NSW conduct the investigation against the organization under the Salmonella outbreak in 10 aged care facilities on the NSW South Coast and ACT between January and March 2015 (Food Authority, 2017).
Implication of this case on the industry is severe, as these offences were not minor in nature and they have severe impacts on the health and safety of the people. Decision of the court in this case can be considered as the remainder to all food businesses and individuals conduct their function in this industry, as it recognize the importance of food safety systems in the organization. This case is especially for those who directly serve food to the locals and tourists of the organization, and considered as good example of the consequences of breach of food safety standards.
It further recognize the importance of cleanliness and sanitization, which states, that food businesses are under obligation to ensure clean and properly maintained premises in terms of ensuring the safe and hygiene food to the customers.
After considering the facts of this paper, it can be said that there are number of legal areas which must be considered by the Inch Kin in terms of initiating the café business in NSW. All these areas of law impose number of obligations on the business organizations who all are engaged in the food and beverage industry, and in case café fails to comply with it then it will result in severe consequences for the case.
The food authority of NSW and local councils work together at the level of retail business to inspect the cafés, restaurants, and retail food outlets at regular basis in terms of ensuring that all these business organization complied with the Food Standards code. Major areas of legal obligations considered by Inch Kin café is the food safety standards and obligations of café related to food safety. Inch Kin needs to comply with the FASNZ, NSW Food Act 2003 and the NSW Food Regulation 2015. Importance of cleanliness and sanitization must also be recognized by the cafe, which means, that food businesses are under obligation to ensure clean and properly maintained premises in terms of ensuring the safe and hygiene food to the customers.
AISC, 2018. Hospitality. Available at: https://nationalindustryinsights.aisc.net.au/industries/tourism-travel-and-hospitality/hospitality. Accessed on 28th November 2018.
Federal Register of Legislation, 2003. Australia New Zealand Food Standards Code - Standard 3.2.3 - Food Premises and Equipment. Available at: https://www.legislation.gov.au/Series/F2008B00577. Accessed on 28th November 2018.
Food Authority, 2017. Bettamaid director fined for food safety breaches. Available at: https://www.foodauthority.nsw.gov.au/news/newsandmedia/departmental/2017-02-14-bettamaid-fined-food-safety-breaches. Accessed on 28th November 2018.
Food Authority, 2018. Food Safety Supervisors (FSS). Available at: https://www.foodauthority.nsw.gov.au/rp/fss-food-safety-supervisors. Accessed on 28th November 2018.
Food Authority, 2018. Inspection. Available at: https://www.foodauthority.nsw.gov.au/rp/inspections. Accessed on 28th November 2018.
Food Authority. Cleaning And Sanitising In Food Businesses. Available at: https://www.foodauthority.nsw.gov.au/_Documents/industry/cleaning_sanitising_food_businesses.pdf. Accessed on 28th November 2018.
Food Safety Act- 2003.
FSANZ, 2016. Food safety practices and general requirements. Available at: https://www.foodstandards.gov.au/publications/Documents/Safe%20Food%20Australia/STANDARD%203.2.2%20Food%20Safety%20Practices%20and%20General%20Requirements.pdf. Accessed on 28th November 2018.
NSW Food Regulation- 2015.
Santacruz, S. 2016. Food Safety Regulation in New South Wales. Available at: https://www.foodsafety.com.au/resources/articles/food-safety-regulation-in-new-south-wales. Accessed on 28th November 2018.
Statista, 2018. Food & Beverages. Available at: https://www.statista.com/outlook/253/107/food-beverages/australia. Accessed on 28th November 2018.
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