How to Start a Food Business in Australia? A Complete Guide

Step 5: Understand Australia’s food business legal framework

Australia’s food industry runs on strict national, state, and council laws. Here’s how the Food Standards Code, Food Acts, and consumer laws all fit together.

What laws apply to food businesses in Australia

Think of the legal framework as three layers: national rules for food safety, then state/council rules for how you operate day-to-day, plus general business laws.

• Food Standards Code (FSANZ): Standard 3.2.2A, effective from 8 December 2023, applies to category one and two food businesses that handle unpackaged, ready-to-eat, potentially hazardous food. These businesses must appoint a certified Food Safety Supervisor, ensure all handlers are trained, and keep evidence showing that food safety risks are controlled.
• State & local law: Your state’s Food Act and local council requirements sit on top (e.g., fit-out and trade-waste/grease trap conditions). In some states, higher-risk activities also need a state licence.
• If you sell packaged food: Follow labelling basics, especially Plain English Allergen Labelling (PEAL), which became mandatory for new labels on February 25 2024. Stock packaged/labeled before that date can be sold until February 25 2026 (stock-in-trade).
• General business law: Australian Consumer Law (truthful claims, refunds/remedies) applies to every seller. Privacy rules apply if you collect customer data.
  Closer: Map these once to your specific model (café, truck, caterer, home-based) and you’ll avoid 90% of “surprise” compliance work later.

What licenses or permits do food businesses need in Australia

Whether you fry, bake, or bottle, someone needs to know you exist before you serve a single customer.

• Most retail/service food businesses (cafés, restaurants, food trucks, markets, home-based) must notify/register with the local council before trading. Process and naming vary by state, but that’s the core rule.
• State specifics (quick examples):
  • NSW: Retail and food-service businesses must notify their local council.
    • High-risk producers, processors, or transporters need a licence from the NSW Food Authority. 
    • Manufacturers and wholesalers must notify the Authority and are inspected under the Manufacturer & Wholesaler Inspection Program.
  • VIC: Register or notify via FoodTrader and lodge Statements of Trade for each council you operate in.
  • QLD: Most food businesses require a local council licence. (not just notification).
  • WA: Notify or register with your local government; some remote operators register with WA Health.
  • SA: Notify through your local council or SA Health if you operate outside council areas.

If you’re unsure whether it’s a licence or a notification in your state, assume you must tell the council first, then check if a state-level licence also applies.

How often can your food business be inspected? 

Expect an inspection before or soon after opening, then on a risk-based cycle (your activities and history set the pace).

• Frequency: Councils and state authorities use risk-based schedules; higher-risk businesses and poor histories mean more frequent checks. (Example: SA bases frequency on risk classification and compliance history.)
• Who inspects: Usually local council environmental health officers for retail/service; state authorities audit licensed, higher-risk operations (e.g., dairy/meat/seafood).
• Fees: Many councils charge registration and/or inspection fees; state licences carry application and annual fees. (Amounts vary by LGA/state, check your council/state page.)

A tidy first inspection and solid records can reduce your visit frequency; serious issues can trigger re-inspections (often with extra fees)

Are there any food labelling and packaging requirements? 

If your food is pre-packed, sold online, or distributed to other retailers, you must comply with Australia’s food labelling laws under the Food Standards Code.

Your label must include:

• The name or description of the food
• An ingredient list in descending order
• Allergen declarations (in PEAL format)
• Storage instructions
• “Use by” or “best before” dates
• Supplier details
• Nutrition Information Panel; unless exempt under FSANZ Standard 1.2.8.

Pro tip: Avoid misleading claims like “low fat” or “natural” unless you meet the FSANZ definitions, such claims fall under the Australian Consumer Law.

Step 6: Meet food premises and equipment requirements

Before opening your doors, your food premises must meet national food safety standards and any additional council-specific requirements.

What to know:

• Council approval: Most local councils require a Food Premises Design Assessment or inspection before you begin operations.
• Fit-out essentials: Floors, walls, and ceilings must be smooth, non-absorbent, and easy to clean. You’ll also need:
  • Handwashing basins with warm water and soap
  • Separate sinks for food prep and utensil washing
  • Proper refrigeration and temperature control
  • Pest-proofing and adequate ventilation
• Standard 3.2.3 compliance: Check the Food Premises and Equipment Standard 3.2.3 (FSANZ) to ensure your layout and materials meet hygiene and maintenance standards.

Step 7: Set up finances, tax, and accounting

This section shows how to manage your food business finances and stay compliant with ATO requirements.

TFN (Tax File Number): 

• All businesses need a TFN. Sole traders can use their individual TFN. However, companies, trusts and partnerships need a separate TFN (you can apply for TFN at the same time when you apply for an ABN via the ABR). 

GST (Goods & Services Tax): 

• Register when your actual or projected GST turnover hits $75,000 (mandatory). Lodge Business Activity Statements (BAS) regularly, and claim GST credits on business expenses.

PAYG withholding: If you hire staff or pay yourself a salary from your company, register for PAYG and withhold tax from payments.

Superannuation: Compulsory for employees and some contractors considered “employees” under super laws. SG rate is 12% currently (from July 2025 onwards). You’re required to pay quarterly. 

PSI (Personal Services Income)

If your income is mainly from your personal skills/efforts, PSI rules may limit some deductions and affect income attribution (applies to sole traders and entities). Check the ATO guide to assess.

ASIC compliance: Under ASIC rules, every company must complete: 

• An annual review
• Pass a solvency resolution
• Confirm details
• Pay the review fee to stay registered
• Directors must also obtain a Director ID before their appointment.

Most food startups struggle with BAS and GST in their first year. With Sleek’s accounting, you’ll never miss a deadline or deduction. Talk to an accountant now!

Step 8: Protect your food business with insurance

Food businesses face unique risks, from customer illness to equipment breakdowns. Having the right insurance safeguards your investment and ensures long-term sustainability.

Common types of insurance include:

• Public liability insurance: Protects you if someone is injured or their property is damaged because of your business.
• Product liability insurance: Covers claims related to illness or injury caused by the food you sell.
• Workers’ compensation: Mandatory if you employ staff.
• Equipment and property insurance: Covers your kitchen setup, vehicles, or mobile food units against theft or damage.

Pro tip: Many commercial landlords and markets require proof of insurance before granting leases or stall permits.

Step 9: Manage waste and environmental compliance

Waste management is a key part of food business operations and often a council requirement.

You may need to:

• Install a grease trap to prevent fats and oils from entering the sewer.
• Obtain a trade waste permit from your water authority.
• Set up safe storage for cooking oil, chemicals, and waste bins.
• Partner with licensed waste collection services for food and recyclable waste.

Pro tip: Sustainable waste practices, such as composting or recycling used cooking oil, not only help the environment but can also enhance your brand reputation.