By: Sarin Tavlian, Esq.
California Apparel News, March 27, 2014
On Oct. 4, 2013, California Governor Jerry Brown signed into law a “Made in California” labeling program. The purpose of this new law is to encourage consumer product awareness and to better market California products in an increasingly competitive economic environment. Taking advantage of this new legislation is a great marketing tool for California companies.
The bill was modeled on the “Buy California/California Grown” program for marketing in-state agricultural products. It makes unlawful the act of representing a product as made in California by using a specified Made in California label unless the product complies with the requirements of the Made in California Program established by the Governor’s Office of Business and Economic Development. Representing that a product is made in California and not complying with this law would constitute an unfair method of competition and unfair or deceptive act or practice.
In order to be eligible for the program, a company must establish that the product is substantially made by an individual located in the state of California. “Substantially made” means completing an act that adds at least 51 percent of a final product’s wholesale value by manufacture assembly, fabrication or production to create a final, recognizable product. The act of packaging a product is expressly excluded from the definition.
As part of the Made in California Program, each participating company is required to register with the Business and Economic Development Office for use of the Made in California label. The registering company must submit a qualified third-party certification at least once every three years that states the product is made according to the standards required for the Made in California label.
“Qualified third party” is defined as an individual, group or association that possesses a professional license, certification or other equivalent documentation indicating sufficient training, education or expertise to perform a regulatory compliance audit. The company may also need to pay a fee in an amount yet to be determined to accompany the registration, the proceeds of which will be deposited in the Made in California Fund within the State Treasury. California companies that take advantage of the Made in California label should ensure compliance with the program or they could face potential liability.