China Food Safety News Regulatory Roundup: September 2 - October 26

China Food Safety News Regulatory Roundup: September 2 - October 26

 

Editors Perspective: 

 

September and October were important months for China's food industry with the promulgation of China's new food safety law on October 1st. In another article I wrote on July 7th I listed my top 3 predictions for China's food industry specifically

  1. Greater regulation of online sale of food through crossborder ecommerce in China
  2. Growth of a Competitive Dairy Sector
  3. Supply Chain Integration and Connectivity 

 

Since i made these predictions, more recent regulatory updates in the weeks preceding the promulgation of the new food safety law and in the weeks after have proven to be extremely telling.

 

 

Prediction 1:  

Now, I hate to say i told you so (no i don't... its awesome) but recent news has more than confirmed what I was sure was going to happen in China's food industry over the next several months to several years. First of all Chinese authorities have finally decided to regulate its frankly chaotic crossborder ecommerce sector with the drafting of "Detailed Rules for Supervision and Administration on Food Imported by Bonded Mode of Cross-Border E-commerce The basic premise is that all foodstuffs traded through CBEC should comply with the requirements of China's food safety law, supporting national standards, administrative measures, regulatory provisions and guidelines. Bad news for the thousands of non-compliant infant formula, health foods, supplements and other foods currently being sold on CBEC platforms and other ecommerce platforms in China. Another uncertainty clarified by the drafting of these rules is the designation of CBEC supervisory and enforcement responsibility to AQSIQ which was previously a toss up between CFDA and AQSIQ. It remains to be seen how much of the first draft will remain unchanged before final promulgation, given the lobbying power and "Guanxi" exerted by Alibaba, YHD, Jingdong and the likes.

 

Prediction 2: A second affirmation of my soothsaying ability is China's new requirement to register all domestic and imported infant formula. The move is the latest in a sequence of what i guess is a carefully planned and orchestrated strategy to implement regulatory selective pressures in the form of technical barriers to trade over China's domestic and imported dairy sector and force closure of substandard manufacturers and brands, modernize the industry and stimulate merger and acquisition all with a view to finally reestablishing the financial dominance of China's major domestic dairy companies who have over the last decade have been fighting a loosing battle against imported infant formula. At a domestic level hundreds of copycat brands will be forced out of the market making way for the flagship brands of China's major domestic dairy manufacturers. On the international front we can see how the move will favor companies who have already made strategic partnerships with Chinese dairy firms. Exclusively OEM production manufacturers will be hit hardest by the new regulation which will limit manufacturers to production of just 15 brands. Interestingly New Zealand's dairy industry (unlike every other nation New Zealand have somewhat prophetically already instituted a ban on OEM on products destined for export to China and made a requirement to demonstrate a "relationship" between the brand owner and manufacturer) are well placed to deal with the new barriers to market entry erected by this new regulation. 

 

Prediction 3: 

With China's connected populace and the widespread acceptance and usage of QR code scanning, mobile shopping and mobile payment options I don't think its a stretch to say that traceability and supply chain connectivity are the future of China's food industry. Mobile shopping has taken off and China's government is gearing up to use cloud technologies to offer online traders facilitated regulatory compliance by uploading Chinese labels and other mandatory compliance documentation to a cloud rather than physically printing the labels or submitting the documentation to local authorities. Consumers shopping online (primarily on their mobiles) will then have the option to view electronic copies of these Chinese labels rather than the physical copies. With food safety still the primary problem facing China's food industry and counterfeiting and adulteration of foodstuffs with illegal and dangerous ingredients still a multibillion dollar industry, traceabililty offers the only feasible solution to ensure the authenticity of foods sold in China. In addition China is now legally requiring traceablility as articulated within the new food safety law.

A Chronology of Food Regulation News Sep 2 - Oct 26 2015

 

 

 

 * If you are interested in discussing any of the issues outlined in the news or are interested in launching a product here in China using a traceability system or crossborder eCommerce please do not hesitate to contact me here or alternatively just pop me an email at [email protected] 

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