News & Insights

With COVID-19 prompting the weakening of global supply chains, we saw increased demand for on-shore manufacturing in 2020.

Many Australian businesses that previously sourced goods and parts from overseas have shifted their focus and become more reliant on domestic manufacturers. This has led to many Australian manufacturers experiencing rapid growth and needing to adapt their processes to meet growing demand.

It is critical that manufacturers continue to meet their legal obligations under the Australian Consumer Law (ACL), which provides consumer protections and imposes responsibilities on manufacturers. On-shore manufacturers should also consider whether their intellectual property (e.g. a brand name, logo, innovative new process) is sufficiently protected.

the future of manufacturing in Australia

In late September, the Government announced the investment of approximately $1.5 billion in the Australian manufacturing industry over the next four years. The purpose is to support Australian manufacturers in becoming more competitive, resilient, and in a better position to grow and achieve economies of scale. See our previous article on “manufacturing and the 2020 – 2021 federal budget” for further information about the Modern Manufacturing Strategy.

As mentioned above, domestic manufacturing has become even more important in 2020, as a result of the breakdown or weakening of global supply chains.  Additionally, on-shore manufacturing can contribute to higher quality assurance of goods, and allow businesses to adopt a more “hands-on” approach when it comes to compliance.

key considerations for manufacturers

It is important for Australian manufacturers to be aware of their obligations and responsibilities under the ACL, as well as opportunities to protect their intellectual property.

1. Compliance with the ACL

Many businesses that manufacture goods will have obligations under the ACL, depending on the type of goods and the value of the goods/transactions.

For example, businesses that manufacture and sell goods may have obligations under the ‘statutory consumer guarantees’ – these include guarantees as to quality, fitness of purpose, and accuracy of product descriptions. Furthermore, if there is a defect with goods, manufacturers can be liable directly to the consumer for compensation, or required to indemnify the seller for a remedy provided to the consumer.

It is important to have manufacturing and distribution agreements which properly capture these obligations, and best protect your business.

2. Protecting your IP

Australia has a well-established intellectual property system. Businesses that manufacture on-shore can take advantage of this system by registering their intellectual property rights.

Depending on the type of intellectual property (e.g. a brand name, logo, innovative manufacturing process), it may be relevant to register a trade mark, design, or patent. Without registering these rights, it can be extremely difficult for a business to prevent competitors from replicating or infringing upon their intellectual property.

If you are unsure whether your business is meeting its obligations under the ACL, or would like to learn more about the above, don’t hesitate to contact a member of our Trade team or Intellectual Property team.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.