Proposed caffeine crackdown swings from outcomes-based regulation to stifling over-prescriptiveness
Australia and New Zealand’s caffeine rules are about to change and, depending on which document you read, FSANZ is either building a modern, outcomes-based regulatory framework, or continuing to lock industry into an overly prescriptive regime that does not appear to protect health and safety.
The latest and third Call for Submissions on Proposal P1056 contains a dramatic shift from the first.[1] What began as a clear outcome of protecting consumers from inadvertent over-exposure to caffeine is now veering towards extremely specific rules which are unlikely to control caffeine exposure while also stifling innovation and consumer choice.
This article should prompt every stakeholder of the food industry to make a submission regardless of whether their products will ever contain caffeine, if only to encourage our food regulation to be outcomes-based and not unnecessarily prescriptive.
What is outcomes-based regulation?
Outcomes-based regulation sets the objective or goal to be achieved by the regulation (for example, keep consumers safe from high caffeine exposure) but does not dictate how that outcome must be achieved. It allows for much greater flexibility but less certainty in compliance.
Prescriptive or rules-based regulation on the other hand dictates precisely how the regulation works (eg prescribing the forms of an ingredient permitted, its quantity, how it can be processed, what products it can be added to, etc). It is much clearer as to when an approach is compliant or not. Such rules can quickly become outdated, prohibit innovation that may still meet the objective, and require significant resourcing in updating them. In other words, the outcome becomes secondary to the rulebook.
Hopefully it is relatively self-evident to say that the food industry prefers outcomes-based regulation and food law enforcement agencies prefer prescriptive regulation, as the burden of assessing and interpreting whether an outcome is met is passed from industry to regulators.
How the presence and addition of caffeine to food is regulated is a perfect example of how these philosophies clash.
The emergency amendment: a clean, outcomes-based fix
The review of caffeine in our food supply began with an emergency: fatal caffeine overdoses linked to pure and highly concentrated caffeine products. Food Standards Australia New Zealand (FSANZ) responded with Proposal P1054,[2] which resulted in a simple, targeted, outcomes-based rule change in the Australia New Zealand Food Standards Code (the Food Standards Code): No food for retail sale may contain caffeine at or above 1% (liquids) or 5% (solids/semi-solids).[3]
While this may seem prescriptive at first (as there is a clear pass/fail threshold that requires no interpretation), it achieved the goal of both protecting consumers from highly caffeinated products whilst also providing industry and regulators a firm idea as to what a safe level of caffeine was for individual products, all without being prescriptive as to how industry must achieve that goal. No detailed list of valid categories. No policing whether caffeine was isolated, botanical, extracted, or synthesised. If the total caffeine concentration was below the ceiling, the product was safe. The outcome was the focus.
Trending from outcomes-based to rules-based
The first Call for Submissions (CFS) for P1056[4] was issued on 19 December 2022 and had two stated objectives: assess levels caffeine in the food supply (and in formulated supplementary sports foods in particular) and assess the risks posed by caffeine in vulnerable sub-populations.
As reflects the early stage of standard-settings, this 1st CFS asked more questions than proposing changes to the laws. However, following a dietary intake assessment, the first CFS proposed to expand the express permissions to add caffeine in the Code to include sports foods. Still a prescriptive outcome, but at least broadening permissions rather than restricting them.
However, FSANZ also expressed a preference for removing the maximum thresholds for caffeine in food and replacing it with a clear prohibition against the addition of caffeine to food (excluding foods that naturally contained caffeine). This much more prescriptive approach was proposed to address the identified risk that 6% of adults were exceeding safe levels of caffeine.
It is worth noting at this juncture that the dietary intake assessment[5] (while limited to 2012 data) clearly indicated that coffee, tea and soft drinks were the major contributors to caffeine intakes (estimated 94%). Coffee alone makes up 66% of caffeine intake in at-risk consumers.
The 2nd CFS issued on 4 March 2025[6] included draft amendments to the Food Standards Code. These essentially provided drafting for the intention expressed in the 1st CFS: to allow sports foods to contain caffeine, but then proposed to ban caffeine as an ingredient (ie in isolated form), but not when naturally occurring.
A 3rd (and likely final) CFS[7] was published on 31 October 2025. It has doubled-down on the trend towards prescription and made it highly confusing. Proposed wording now goes beyond banning caffeine as an ingredient, to:
- banning caffeine “from all sources”
- but not when present “by natural occurrence”
- except for the addition of a “guarana extract”.
Make sense?
Some regulators certainly do not believe so, as their primary concern expressed in submissions is the potential for very high caffeine levels to still be compliantly added to foods from caffeine-rich plant extracts. In response to those concerns, FSANZ states:
FSANZ’s position was and is subsection 1.1.1—10(7) does not apply to or permit plant extracts with ‘unnaturally’ elevated levels of caffeine levels (such as guarana extract) as the latter is not naturally occurring caffeine.[8]
How is a concentrated plant extract not “naturally occurring”? Does this mean a green tea concentrate added as a base to an iced tea product will now be prohibited because its caffeine levels are not “natural”? And if it is “natural” to concentrate plant extracts (because it is, humans have been doing it for millennia – consider any cordial product), then how are “naturally” elevated levels of “naturally” occurring caffeine going to be enforced? Are regulators going to have to sit and debate in Court when caffeine levels stop being “natural”?
Section 1.1.1-10(7) states that the proposed prohibition of caffeine from all sources would not apply to caffeine: “that is in a food for sale, or in an ingredient of a food for sale, by natural occurrence”. The drafting of the Code is about the presence of the substance by natural occurrence, not whether its levels are proportional to nature, whatever that may mean. In that way, FSANZ’s position was and is mistaken.
Oh, except for guarana, which has been singled out to be banned in all food regardless of its caffeine level except for when used in cola beverages, energy drinks and sports foods.
The proposed drafting of the Code has become more and more prescriptive with each round of consultation, whilst becoming less and less enforceable, and also leaving its objective of reducing risk of caffeine overdose far far behind.
This more prescriptive approach would obviously have the effect of reducing sources of caffeine in the food supply (ie stifle the development of any new food that may have caffeine), but would do absolutely nothing to reduce the amount of caffeine present in products responsible for 96% of dietary exposure to caffeine. It would not remove or reduce caffeine from coffee, tea, chocolate or soft drinks, nor would it reduce overall consumption of those products. You could still buy unlimited triple espressos … but heaven forbid you feel like a juice with a guarana hit.
If FSANZ had simply left the overall maximum limit for individual foods (ie done nothing), it would have led to more food products in the food supply containing caffeine, but at safe levels. What we may end up with is products legally containing unsafe levels of caffeine but only by “natural occurrence”.
To sum up: P1056 demonstrates an evolution towards more prescription, less flexibility, less innovation, and limited impact for the overall objective.
Why everyone should make a submission
If current drafting were to be adopted it would:
- Create unnecessarily restrictive regulation, which regulators are indicating is unenforceable;
- Open the door to possibly higher levels of “natural” caffeine in products (thus failing the objective);
- Remove a clear indicator of safe levels of caffeine from the Food Standards Code; and
- Not stop the development of new food products from containing caffeine nor stop consumers from consuming more of them. Industry will just have to use coffee, tea and chocolate instead of isolated caffeine, which will just make such products more expensive to make and technologically harder to implement.
There could not be a clearer case for where outcomes-based regulation – FSANZ’s initial instinct in P1054 and in the early stages of P1056 – is better for industry, regulators and consumers than prescriptive regulation.
KHQ encourages all of industry to say so by making a submission to FSANZ on P1056 before 12 December 2026, demanding a food regulatory regime that targets risk, not innovation.
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This article was written by Matthew Comerford and Charles Fisher.
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[1] https://www.foodstandards.gov.au/food-standards-code/proposals/p1056
[2] https://www.foodstandards.gov.au/food-standards-code/proposals/P1054
[3] Australia New Zealand Food Standards Code, Section 1.1.1-10(5)(g).
[4] https://www.foodstandards.gov.au/sites/default/files/food-standards-code/proposals/Documents/P1056%201st%20CFS%20.pdf
[5] https://www.foodstandards.gov.au/sites/default/files/food-standards-code/proposals/Documents/P1056%20SD2%201st%20CFS%20DIA.pdf
[6] https://www.foodstandards.gov.au/sites/default/files/2025-03/P1056%202nd%20CFS.pdf
[7] https://www.foodstandards.gov.au/sites/default/files/2025-10/P1056%20Consultation%20Paper_Oct2025.pdf
[8] Ibid, Page 19.