"Industry was instrumental in lobbying to establish the process and have been calling for it for a long time," Ms Carnell said.
"The review is a critical element of the Council of Australian Governments' (COAG) focus on food regulatory reform as part of its business regulatory reform agenda. It represents a rare opportunity to establish policy principles fundamental to sensible food labelling.
"The review has the potential to transform food labels from being a battleground of competing interests to a trusted mechanism for consumers to identify the foods they are seeking and understand how they can contribute to healthy diets and lifestyles, now and into the future."
One of the food labelling issues highlighted by AFGC relates to country of origin requirements which are "complex" and consumers have concerns that the use of "Product of Australia" and "Made in Australia" terms may be misleading.
"AFGC believes there is a strong argument for removing the country of origin labelling provisions from the Food Standards Code and giving sole responsibility to the ACCC or to the New Zealand Commerce Commission," Ms Carnell said.
"It's all about streamlining country of origin labels to ensure consumers understand exactly what they are getting in their products."
In response to Independent Senator Nick Xenophon's call to only allow the word "Australian" to be used on products if they are 100 per cent produced in Australia, Ms Carnell said this scenario was illogical and overly simplistic as it would make it illegal for products made with any imported ingredients to be labelled "Australian Made".
"This would mean that all products that contain cocoa, vanilla, citric acid, cultures for cheese, yeast for brewing and brine for curing meat could not be labelled 'Australian Made'."
