The Food Donation and Waste Reduction Act

Emily Letch-Avenell, Curtin University

Executive Summary

An estimated 7.3 million tonnes of food waste is produced by Australian supermarkets each year, costing Australia $36.6 billion per annum. Supermarkets are major contributors to food waste and face challenges in waste reduction, as it is often more feasible to throw away goods rather than donating or repurposing them. To combat this, this policy recommends a federal requirement for all edible food waste from supermarkets be donated to local Australian charities.

Despite challenges like initial financial investment and enforcing the consistent separation of edible and inedible food waste in supermarkets, the policy would directly address the issue of edible food waste, whilst increasing supply to charities and food banks. The Department of Climate Change, Energy, the Environment and Water (DCCEEW) of Australia would support this with targeted grants and tax incentives for supermarkets, enhancing compliance through strict waste segregation and prohibiting edible food disposal in landfills. This approach aims to significantly reduce waste and aid charities, fostering a sustainable food distribution system.

Implementation requires collaboration among supermarkets, waste management, and transportation firms, supported by government funding. Success metrics include a 30% reduction in edible food waste going to landfill nationally, a 30% increase in donated food and successful compliance enforcement through regular audits and penalties. Creating a federal standard and partnering with stakeholders including not-forprofits and supermarkets would assist in  ensuring a robust solution to Australia's food waste issue.

The implementation of this strategy would be fully supported by DCCEEW's existing $5 million annual budget for food waste programs and the National Food Waste Strategy's $1.3 million allocation over 24 months, ensuring compliance, monitoring, and stakeholder engagement without requiring additional expenditure.

Problem Identification 

Australians discard around 7.6 million tonnes of food each year, averaging 312 kg per person and up to $2,500 per household (National Retail Association, 2022). Food waste in Australia has significant environmental consequences, with food waste alone contributing 3% of the country's annual greenhouse gas emissions (DCCEEW, 2017). Furthermore, the water used to grow this wasted food amounts to 2,600 gigalitres, equivalent to the volume of water in five Sydney Harbours (National Retail Association, 2022), and the land required to grow wasted food covers over 25 million hectares, surpassing the size of Victoria (DCCEEW, 2023).

In contrast, food insecurity remains a critical issue in Australia, affecting millions despite concentrated efforts to mitigate it (Commonwealth Parliament, 2024). Approximately 2 million households in Australia have experienced severe food insecurity within the last 12 months (Foodbank, 2022). Additionally, food insecurity affects millions in Australia, increasing social costs related to healthcare and social services. The wastage of food is intensified by the lack of uniform norms, and lack of knowledge and coordination. 70% of edible food is wasted due to a lack of collaboration with grocery chains, even though programs like Food Rescue and the Food Rescue Sector Action Plan are in place to attempt to reuse a sizable amount of food (Australian Government, 2019).

Currently, supermarkets often discard food because it is less expensive than donating it (The Australian Institute 2023). Australia's tax framework does not provide sufficient incentives for companies to cover the costs associated with donating unsellable but edible food, making landfill a cheaper option (FoodBank, 2023). This approach not only overlooks the environmental costs of landfill, including significant methane emissions and expensive waste management systems, but also the rising financial burden due to government levies that can exceed $100 per tonne (KPMG, 2012). Redirecting food waste through subsidies and better tax incentives could reduce these broader environmental, financial, and social costs, offering long-term benefits.

Context

Fruits and vegetables are among the most frequently discarded items globally, with about 45% of all production ending up as waste (FAO, 2021). Despite ongoing efforts by businesses and governments to reduce food waste, supermarkets, shops, and households still dispose of 35% of all unused food, much of which remains edible (Food Bank Australia, 2023). An estimated 7.3 million tonnes of food waste is produced by Australian supermarkets each year, costing Australia $36.6 billion per annum (Australian Government, 2022).

Effective waste management is a crucial global challenge that impacts society, the economy, and the environment profoundly. The complex consequences of waste include social issues like food shortages and inequitable resource distribution, economic losses due to inefficient resource utilisation, and environmental harm from landfill disposal (Abubakar et al., 2022). Addressing this issue in Australia necessitates a shift in perspective towards sustainable practices and the promotion of a circular economy, requiring collaboration among communities, government bodies, and industries.

According to Food Standards Australia New Zealand (FSANZ), donated food must meet the same safety and quality standards as commercially sold food. This includes proper handling, labelling, and traceability to ensure safety and accountability. The quality must be maintained to ensure the food is fit for consumption.

In 2023, Foodbank Australia reported that donating leftover store food could generate 100 million meals annually. Despite current efforts, 2 million Australian households still struggle with food insecurity, with 38% not receiving needed aid (One Planet 2023). Private organisations advocate for mandatory measures to improve collaboration and tackle food insecurity (FAO, 2021).

Food waste is a significant contributor to climate change, primarily due to the release of methane during its anaerobic decomposition in landfills (World Wildlife Fund, 2022). This greenhouse gas is highly potent, intensifying the warming effect on the atmosphere (UCAR, 2024). The environmental impact of food production is further increased by the production and disposal of discarded food, which wastes important resources including land, energy, and water in addition to methane emissions. 

Currently, the Food and Grocery Code of Conduct, under the Competition and Consumer Act 2010, does not address food waste. Relevant sections of this code, particularly in Part 3, Division 4, focus on conduct, but overlook guidelines for managing surplus food. 

The Current Policy Environment

Despite the absence of federal legislation on supermarket food waste in Australia, various states and territories have implemented recovery, recycling, and prevention measures (DCCEEW, 2023). However, collaboration challenges with large grocery chains and the need for mandatory measures remain (Waqas et al., 2023). 

The National Food Waste Strategy launched in 2017, aims to halve food waste by 2030, but has limited impact due to the voluntary nature of initiatives (National Food Waste Strategy, 2017). The National Food Waste Strategy, while making some progress through various projects and partnerships, is not on track to meet its goal of halving food waste by 2030. Although voluntary initiatives have saved millions of meals, significant gaps remain. Australia still discards vast amounts of food, and achieving the 2030 target will require further regulatory reforms, investment, and stronger policy support (FIAL, 2021)​. Similarly, the 2018 National Waste Policy provides a framework for waste management, emphasising waste avoidance and resource recovery, but state-specific rules and initiatives, such as those listed in the table, show inconsistent practices across states (DAFF, 2023). A more unified national approach with mandatory measures is needed to address food waste effectively (StopfoodWaste, 2022).

OzHarvest, Australia's leading food rescue organisation, collects surplus food from supermarkets, restaurants, and other businesses and redistributes it to charities (ref). This organisation plays a critical role in addressing food waste and hunger, rescuing millions of meals annually. OzHarvest is funded through a combination of corporate partnerships, government grants, donations, and fundraising initiatives (ref). Their work aligns with national efforts like the National Food Waste Strategy by ensuring that rescued food reaches those in need, and federal mandates can further enhance their impact by providing consistent food supplies, alongside grants and incentives for efficient food collection and distribution.

Case Study

France's Anti-Waste Law, enacted in February 2020, exemplifies a robust approach to mitigating supermarket waste. The law focuses on a holistic strategy to eliminate waste and pollution across the production, distribution, and consumption stages (Ellen Macarthur Foundation 2022). It integrates principles of eco-design, recycling, and reuse, alongside promoting circular business models (Condamine 2020).  Supermarkets are required to donate unsold but still edible food to charities rather than disposing of it in landfills. Under the Anti-Waste Law, supermarkets that violate this regulation face fines of up to €3,750 per infraction. The law also requires supermarkets to participate in composting initiatives and follow stringent recycling guidelines. 

One notable measure is a tax reduction for food donations. Retailers donating surplus food to charities can benefit from a tax reduction of 60% of the value of the donated food. By ensuring that recyclables and organic garbage are properly processed, these measures greatly reduce the amount of waste that is dumped in landfills. This all-encompassing strategy tackles pollution and waste at every level of production, distribution, and consumption. Stakeholder engagement amongst businesses, consumers, and government organisations is one way to effectively guarantee that the law is implemented and followed to the letter (Ellen Macarthur Foundation 2022). The law aims to reduce supermarket waste by penalising disposal of unsold but consumable food, requiring donations to charities instead (Condamine 2020).

The law's success is reinforced by ongoing monitoring and regular evaluations carried out by government agencies, ensuring the intended outcomes are achieved and providing a basis for continuous improvement. This systematic review process has proven effective, as demonstrated by a 10% reduction in food waste from 2016 to 2020, reported by Eurostat in 2022 (with a reduction from nearly 10Mt in 2016 to just under 9Mt in 2020, or 133 kg per capita across all sectors). One year after the first waste prevention plan (WPP) was implemented in France in 2015, Municipal Solid Waste (MSW) creation dropped to its lowest level (516 kg per capita). MSW generation has remained steady since 2015, though it is important to note that this trend may also be influenced by various factors, such as household spending and population growth, in addition to the impact of the WPP's implementation (World Bank 2023).

The law's success can be ascribed to its all-encompassing approach, stakeholder participation, and dedication to continuously assessing and modifying its measures (Ellen Macarthur Foundation 2022). 

Options

In order to effectively address food waste in Australia, the federal government must develop a standardised policy framework to ensure supermarkets operating in all states and territories are working to reduce edible food going to landfill. There are several policy mechanisms which could feasibly accomplish this, listed below.

Option 1 Create a Food Donation and Waste Reduction Act and federal standard for supermarkets to donate edible food waste 

The Food and Grocery Code of Conduct, prescribed under the Competition and Consumer Act 2010, should include a mandatory standard requiring supermarkets to donate edible food waste under part 3, division 4 of the legislation regarding conduct. This standard, adapted from FSANZ guidelines, would specify that any food approaching its expiration date but with at least seven days remaining before expiry must be donated to a charitable food organisation (FSANZ 2016).

The Food Donation and Waste Reduction Act would establish compliance requirements aligning to this federal standard, formalising the process and ensuring consistency across all states and territories. It would specify that any food disposed of in landfill within the 10 day expiry would incur a food waste fee of $100 per kilogram or $6,124 per infraction (based on the French compliance figures), based on the quantity disposed of under part 6 of the legislation, compliance. Additionally, a credit scheme could serve as a valuable tool to incentivise and reward supermarkets for their efforts in reducing food waste, further enhancing the effectiveness of the federal standard. 

This policy would require collaboration among stakeholders to address food safety, logistics, and regulatory compliance. Supermarkets must adhere to standardised guidelines for handling, transporting, storing, and distributing donated food. Involving the federal Department of Climate Change, Energy, the Environment and Water (DCCEEW) would provide expert insights on environmental impacts and sustainability practices. Additionally, engaging not-for-profit organisations and supermarket chains in developing these guidelines ensures practical and effective standards.

The most valuable aspect of this policy is the opportunity for the government to foster partnerships between supermarkets and organisations to efficiently and safely distribute surplus food, adapting to stakeholders' needs. Successful collaboration with waste management companies could help streamline the separation and distribution of edible versus inedible food.

The Department of Industry, Science and Resources will create standardised guidelines for the safety, transportation, storage, and distribution of donated food, while fostering partnerships between supermarkets, waste management companies, and charities to ensure efficient and safe food distribution, and establish a comprehensive framework with partnerships, incentives, and requirements for implementation.

However, supermarkets may resist due to perceived costs, necessary restructuring, and logistical challenges of implementing new waste management systems. Effective donation logistics would require meticulous planning, robust monitoring, and potentially government subsidies to manage compliance and transportation challenges.

Option 2 Supermarkets can deduct the fair market value of donated food from their tax returns. 

This tax deduction of 60% of the value of donated food, which has proven to be a strong incentive in France, offered by the government, activated when donation is made to food banks and charities by supermarkets, is economically sound and encourages supermarket chains to become involved and more willing to surpass targets.

The purpose of this tax incentive is to promote community welfare and reduce the wastage of perishable goods. Supermarkets can offset some of the expenses related to food donation, such as handling and transportation, by claiming the product's fair market value. Moreover, this program raises the corporate social responsibility profile of the contributing supermarkets while simultaneously helping those in need. The economic benefit, combined with the positive public relations impact, motivates supermarkets to increase their charitable contributions, which can lead to significant tax savings at the end of the fiscal year.

The proposal advocates for economic incentives, including tax deductions, to stimulate engagement from supermarket chains and waste management companies in food waste reduction. These incentives promote corporate responsibility and sustainable practices, aligning with circular economy principles. 

Potential challenges include greenwashing, administrative complexities, and the risk of supermarkets inflating prices—marking up items by 40% and claiming the full or inflated value from the government for donations. These issues need careful consideration to ensure the system remains fair and prevents exploitation.

Option 3 Provide Grants for Charities to Collect Food

Charities may have the capacity to handle donations but often lack funds for transportation and logistics, limiting their collection efforts. Providing grants for pickup and transportation would remove this financial barrier, incentivising supermarkets to donate more surplus food and encouraging broader participation in food donation, thus reducing food waste and enhancing community support.

Supermarkets can be incentivised to donate edible food by offering grants to charities for the pickup and transportation of donated food. Under this option, supermarkets would not incur any additional costs for the collection of surplus food, as the grants would cover all associated expenses for the charities.

This approach aims to streamline the process of food donation, making it easier and more cost-effective for supermarkets to participate. The separation of food by supermarkets must follow charities strict protocols leading to a reduction in food waste.

This option provides a practical solution to the logistical challenges of food donation, potentially increasing the amount of surplus food redirected to those in need. It also promotes partnerships between supermarkets and charities, fostering community engagement and support. 

While this approach alleviates financial burdens on supermarkets, there may still be administrative complexities in coordinating pickups and ensuring food safety standards. Additionally, there could be concerns about the equitable distribution of grants among charities and the potential for misuse of funds.

Policy Recommendation

Option 1 proposes the Food Donation and Waste Reduction Act, which would establish a federal standard requiring supermarkets to donate edible food waste. This standard would be integrated into the Competition and Consumer (Industry Codes—Food and Grocery) Regulation 2015, amending the existing Food and Grocery Code of Conduct under the Competition and Consumer Act 2010. The amendment mandates that supermarkets donate food approaching its expiration but still safe for consumption, with at least seven days remaining before expiry. This addresses the lack of uniform regulations across Australia.

The Food Donation and Waste Reduction Act goes beyond encouraging donations by establishing legal obligations for supermarkets. Non-compliance would incur penalties, including a food waste fee of $100 per kilogram or $6,124 per infraction for food sent to landfill within 10 days of its expiry.

DCCEEW would oversee compliance, ensuring supermarkets align with both waste reduction goals and environmental protection standards. The DCCEEW's enforcement powers would stem from this Act, formalising its role in regulating food waste and giving the department authority to monitor compliance.

Option 1 is the recommended course of action, integrating the federal standard into the Competition and Consumer (Industry Codes—Food and Grocery) Regulation 2015. The amendment would fall under the Food and Grocery Code of Conduct and align with the National Food Waste Strategy, which was allocated $1.3 million over 24 months starting in 2017. This initiative can be implemented without additional expenditure, as compliance costs would be covered by existing budget allocations.

DCCEEW already allocated $5 million annually to food waste programs, and an additional $1.3 million is expected to be needed to develop and implement this standard. The compliance mechanisms for the amendment would fit within the existing budgetary framework.

The specific amendment to be added to section 3, division 4 of the Food and Grocery Code of Conduct would read as follows:

• Supermarkets are required to donate edible food waste with at least seven days remaining before expiry to registered charitable food organisations.

• Supermarkets must ensure that the donated food is safe for consumption and adheres to relevant food safety standards.

• Non-compliance will result in a food waste fee of $100 per kilogram or $6,124 per infraction.

• Supermarkets are encouraged to participate in a credit scheme that rewards efforts to reduce food waste.

• Supermarkets must adhere to standardised guidelines for handling, transporting, storing, and distributing donated food.

The Department of Industry, Science and Resources will collaborate with stakeholders, including not-for-profit organisations and supermarket chains, to develop comprehensive guidelines and foster partnerships. These partnerships will ensure that food donations are efficiently managed, and that the proposed framework, including incentives and compliance requirements, is effectively implemented.

Reducing Food Waste:

The goal is to reduce the overall amount of edible food that ends up in landfills by 30% within the first three years of implementation. This reduction will be phased, aiming for 10% in the first year, 20% in the second year, and 30% by the third year, using data from 2023 as the baseline.

Growth in Food Contributions:

Supermarkets are expected to increase their contributions of edible excess food to registered food banks and charitable organisations by 30% compared to 2023 levels over the same three-year period.

Observation and Evaluation:

To ensure compliance with the policy, routine inspections and audits will be conducted by DCCEEW under the Food and Grocery Code of Conduct. These audits will verify adherence to food safety regulations and proper waste separation. DCCEEW will also oversee the policy's execution, collecting data from supermarkets, waste management firms, and other relevant parties to evaluate progress and report on outcomes. Regular communication with stakeholders, including supermarkets, waste management firms, and charitable organisations, will be crucial for gathering feedback on the policy's effectiveness and making necessary adjustments. This combined approach will help track progress, identify areas for improvement, and ensure the policy meets its objectives.

Reducing Food Waste:

Goal: France aims to reduce food waste by 50% by 2030, with incremental targets set to evaluate progress. Based on France’s targets this standard should aim to achieve a similar reduction, setting incremental targets for donation volumes, such as achieving a 10% increase in donations annually, leading to a cumulative reduction in food waste (European Union 2024). 

Law Enforcement and Stakeholders

DCCEEW would be the federal authority responsible for implementing and enforcing the proposed policy, in collaboration with state and territory authorities as needed. Compliance with the policy would be ensured through adherence to the Food and Grocery Code of Conduct. The Environmental Protection and Sustainability Division within DCCEEW would oversee and enforce this compliance, managing policy enforcement and conducting routine audits and inspections related to the Code. Verification of compliance would be achieved through these routine audits and inspections carried out by the division.

 Implementation Considerations

The Secretary of DCCEEW would approve the amendment to include edible food waste donation standards within the Food and Grocery Code of Conduct.

DCCEEW would be responsible for carrying out compliance measures that will be covered within the existing budget. This responsibility would be delegated to the same division that already undertakes compliance for similar environmental and sustainability issues, ensuring consistency and leveraging existing compliance strategies. DCCEEW would develop a strategy to monitor and enforce compliance, incorporating edible food waste donation into their existing compliance framework.

Several important factors support the suggested policy. Ensuring supermarkets and large food retailers adhere to stringent requirements and food safety laws is crucial in maintaining the safety of donated food. Ensure that goods prices for supermarket customers do not increase, as implementing standards may result in additional costs for supermarkets. The government providing tax deductions and offsets for operational costs associated with food waste donation would ensure that the customers are not burdened with this cost. Potential risks include price rises and offering subsidies may be a way to combat this. 

Funding

The implementation of this strategy would be supported by the existing budgetary allocations of the DCCEEW, ensuring no additional expenditure beyond the allocated funds. Currently, DCCEEW allocates $5 million annually to carry out food waste programs, which includes the resources necessary to support compliance with the amendment. The National Food Waste Strategy, which aligns with this amendment, has allocated $1.3 million over 24 months from 2017 onwards, further supporting monitoring, evaluation, and stakeholder engagement efforts for the amendment's integration into the Food and Grocery Code of Conduct.

The implementation of the new policy requiring Australian supermarkets to donate all edible food waste to local charities will be supported by the DCCEEW using its existing resources. The cost of carrying out compliance measures will be managed within DCCEEW’s current budget, which includes $5 million annually allocated for food waste programs and an additional $1.3 million over 24 months from the National Food Waste Strategy. These funds will cover compliance monitoring, enforcement, and stakeholder engagement.

Given that supermarkets produce an estimated 7.3 million tonnes of food waste annually, costing Australia $36.6 billion per year, addressing this issue through mandatory donations to charities is crucial. Despite the initial financial investment and challenges in enforcing food waste separation, the policy aims to reduce edible food waste going to landfills by 30% and increase donated food by 30%. By leveraging existing budgets and supporting supermarkets with targeted grants and tax incentives, the policy seeks to mitigate additional costs and ensure successful implementation without requiring further expenditure.

Risks

Supermarket opposition to laws requiring food donations can pose a threat however, with open discussion and constant communication and discussions with all stakeholders to emphasise advantages, would allow more engagement with standards that would result in the signing of the memorandum of understanding as well.

The strain on food banks and charities also needs to be considered due the predicted increase of food donation. A separate government grant under the National Waste Policy may need to be directed towards these organisations receiving the goods, assisting in building infrastructure to allow for the influx of donated goods. 

Currently, supermarkets might not have the necessary infrastructure for transportation and storage, and involvement may be discouraged by strict laws governing food safety and liability issues. Supermarkets' hesitation can be attributed to several factors, including perceived reputational threats, budgetary constraints, and insufficient incentives. 

A further aspect that needs to be considered is that this policy may increase supermarket retail food prices, which would be received negatively by society. By ensuring the funding and costs associated with this policy are provided to initially assist its setup, the initiative would become self-funded. Costs that were being used for landfill and disposal can be redirected to the new policy and costs associated. Government incentives, such as grants provided under the National Food Strategy, aim to further encourage supermarket engagement to create a more circular economy by redirecting edible food waste to charities and food banks.