Food sector updates

With the recent developments witnessed in the food industry, we have enclosed below an overview of what has appeared in the media for the last few weeks. This is an initiative from our end to help you stay updated.

Overview:

On 30th April, the State Government of Uttar Pradesh, a northern India state in India ordered the recall of a batch of 0.2 million packs of Nestle Maggi citing reasons of excessive lead and MSG content. The issue attracted attention of the country’s central food regulator, Food Safety and Standards Authority of India (FSSAI). The FSSAI notified each of 27 states in India to conduct independent tests on samples of Nestle Maggi to identify if the issue was specific to a single batch or product related. Post initial tests, individual states like Kerala, Goa, Delhi, Gujarat, Tamil Nadu, Jammu & Kashmir, Bihar, Madhya Pradesh and Karnataka banned the sale of Nestle Maggi citing similar reasons. The severity of the issue and an estimated slump in the sales of Maggi that drives profitability for Nestle’s India unit, prompted the company’s global CEO Paul Bulcke to travel to India and address the media on the issue. While he did state that all of Nestle’s products are tested for safety, little could be done to curtail states from banning sale of the product.

Key developments:

• Global brands have expressed concern over the food crisis in India, which has been viewed by many as a PR disaster for Nestlé. The brands are especially concerned that quality control over the supply chains in India is limited due to sub-contracting by vendors.
• The Bombay High Court’s ruling of staying the order of FSSAI against Maggi will now be followed by a voluntary destruction of Nestle’s Maggi noodle product.
• In recent days, many food companies and fast food chains in India have come under FSSAI scanner on food safety issues. FSSAI is also strengthening protocols for product recalls, and will mandate companies to detail recall plans and comply with Government’s recall orders.
• Apart from an interest in enforcement of food regulations pan India, there is also the realization that there are many food categories that need to go under the scanner, including other processed food brands as well as fruits and vegetables. Central and State authorities are intensifying scrutiny of larger segments of processed and packaged food; FSSAI has asked all states to keep a strict watch on milk, packaged drinking water and edible oils.
• After standards for lead, FSSAI will issue draft guidelines for standards for alcoholic beverages by next month
• The media has also started raising questions on the systems and processes adopted by FSSAI to conduct tests on food samples. There is a key interest in how FSSAI operates and the degree of transparency under which they operate.
• Reports of increased scrutiny of all processed and packaged food by Central and State authorities are intensifying. State governments have also initiated spot checks and raids on packaging facilities, and is similarly altering its processes for monitoring and testing imported goods.
• The FSSAI has put up a list of accredited testing centers on its website to give FMCG players clarity on testing. In the context of recent food safety issues, FSSAI, recently took a stock of standards followed on salt, sugar and fat in the food industry. The regulator has issued an order to constitute an expert panel to advise FSSAI on salt, sugar and fat standards in India. FSSAI has issued directions to a few states to test levels of salt, sugar and fat in energy drinks.
• A team of international researchers have revealed that most of the Indian food products do not meet global guidelines on nutrition labelling.
• The National Food and Safety Regulator are getting more concerned with regulatory regimes and have released a guideline of recall procedures for food companies in India.
• Industry associations have urged its members to comply with the regulations set by FSSAI.
• On the food recall and testing issue, there are discussions in media about the impact on the industry related to loss of jobs and dip in sales. Meanwhile, the states FDAs continue to test processed food products.

Food sector in news:

National Food Regulator Released New Recall Standard For Food Companies In India – Food World News, 26 June 2015

The National Food and Safety Regulator are getting more concerned with regulatory regimes as they released a guideline of recall
procedures for food companies in India. The said guidelines are strictly mandatory for every food company. Food authorities will take legal action if any operator is caught violating the procedure. Sellers should remove immediately recalled items from the store and return the stocks to the manufactures and should promptly inform consumers through "food recall notices," such as press release or advertisement.

Now, Food Served by Railways too Chugs into Wrong Track – The New Indian Express, 26 June 2015

After the Maggi Noodle fiasco, it has come to light that even the food supplied by the Railways contains harmful and poisonous substances. Giving credence to the fact, the sample reports from the Government Analyst’s Laboratory, here, reveal that around 30 food samples collected from various trains running across Kerala contain harmful and carcinogenic elements.

Food and beverage launches come to a halt following FSSAI action – Business Standard, 25 June 2015

Pending product approvals to the tune of over 700 in the last year and a half by the country's apex food safety regulator - Food
Safety & Standards Authority of India -has resulted in companies left with no new pipeline of products. The result is that food and beverages companies will have to count largely on their existing product portfolios for sales during the crucial festive season. A senior executive at a multinational food processing company confirms that the festive season this year will be dry for firms operating in the space. Some other firms such as Tata Starbucks and Hindustan Unilever (HUL) have gone a step ahead and opted to recall ingredients and products from the marketplace, pending approval from the regulator.

Food regulator unveils draft guidelines for permissible lead in food products, mineral water, wines – The Times of India, 25 June 2015

The food safety and standards regulator has unveiled draft regulations on the permissible limit of lead in food items including
mineral water, fruits, pulses, vegetables, processed food, juices, meat, vegetable oil, olive oil and even wine. The regulator has invited suggestions and objections to the proposed guidelines within 60 days before finally notifying the norms for mandatory implementation by all food operators. The draft guidelines, has brought more food items including jam, canned juice and tomato, fish, leafy vegetables under the mandatory compliance of maximum limits of heavy metals - tin, arsenic and cadmium.

FSSAI wants close watch on popular foods - The Times of India, 24 June 2015

According to sources, in its recent meeting the FSSAI has raised concerns that companies are not following the standards and labelling requirements as per law and consumers are being misled about these products through their packaging and endorsement. FSSAI has directed food inspectors to keep a close watch on products that are consumed in “large quantities” by large segments of the population. Though the official said instructions were not given for specific brands, of late the regulator has cracked the whip on various leading brands while rejecting approvals to number of products from Tata Starbucks, Nestle, Ranbaxy and others.

Does HUL need to fret over the Maggi fiasco? – Economic Times, 23 June 2015

For Nestle's rivals in India, the looming threat of decline in demand for packaged foods far outweighs the possibility of Maggi consumers switching to competing brands. From an overall business point of view, packaged foods as a category is too small to make a huge difference to the fortunes of HUL. The company earns over six per cent of its revenues from packaged foods. With significant money and effort riding on Knorr's success, HUL does have a reason to strategize better for the future prospects of its packaged foods business rather than worry about losing demand in the near term.

Maggi-gate: why India must face up to a bigger problem than instant noodles – The Conversation, 23 June 2015

The problem is that there is no safe limit for lead exposure in children, who are often regular consumers of instant noodles, as a quick meal at school or when they get home. Even at low levels, lead has significant effects on brain development, affecting intelligence, academic achievement and behaviour. Taken together, it may seem surprising if Indian-manufactured instant noodles did not contain some lead. Except for the fact that as one of the world’s largest food companies, Nestlé has a clear responsibility to make sure they don’t. In a country awash with lead, testing should have been obvious and necessary even if it was not formally mandated for one of the largest and best trusted food manufacturers in the world.

All packaged foods to be checked: FSSAI – DNA India, 22 June 2015

Yudhvir Singh Malik, CEO of FSSAI, told dna that, in a meeting of the food safety commissioners across the country on June 4, it was decided that packaged foods can no longer considered safe and food safety officers should now also collect their samples. Many popular foods that line market shelves can be found in the FSSAI list on its website. Kellogg's Special- K Red Berry Cereal, snacks by McCains Foods, Oriflame India's Wellness Swedish Beauty Complex Plus, a chocolate mix by Amway India, Ranbaxy's Revital Tablets, for example, all had their approval rejected by the FSSAI. Fun Foods saw 16 of its product files close since it did not provide timely responses to FSSAI queries. So did Kellogg India's Hot Chinese Oats, Dabur's powdered beverage, Nestle India's UTH treated sweet lassi, and a whipping cream by Mother Dairy.

Pay 1,000; get your food tested! - The Times of India, 22 June 2015

Days after the Food Safety and Drugs Administration (FSDA) department of the Uttar Pradesh government found that Maggi samples had lead in excess of permissible levels, and monosodium glutamate as well, the FSDA has now thrown its laboratories open to ordinary citizens — if a citizen is wary of a certain food item and wants it tested, he or she can submit a sample, pay Rs 1,000 and have it tested. Talking about the initiative, J P Singh, Chief Food Safety Officer, said, “All the districts in the state (Uttar Pradesh) have been instructed to allow ordinary citizens to test any food item if they are wary of it not being of the promised standard.”

FSSAI panel to regulate salt, fat & sugar in food – Economic Times, 19 June 2015

The Food Safety and Standards Authority of India (FSSAI) announced that it will soon constitute an expert group to regulate salt, sugar and fat in food products, following a Delhi High Court order. The Delhi High Court said schools must promote nutrition awareness and encourage food items, including sandwiches, fruit salads, paneer, vegetable cutlets, upma, idli, uthapam, khandvi, poha and low-fat milkshakes. It had given three months to FSSAI and the government to convert these guidelines into law and start enforcing this. It directed the Delhi state government to frame fresh rules on the basis of the being sold in restaurants and by caterer norms so that schools cannot ignore these guidelines.

Let’s turn to science – The Financial Express, 18 June 2015

The growing debate over food safety in India has taken a turn for the better with the chairman of the scientific panel of the Food Safety and Standards Authority of India (FSSAI) calling for a complete overhaul in the testing apparatus, which should be led by scientific principles rather than administrative compulsions. The FSSAI panel chief has opposed the dilution of Indian standards and proposed, rather, that we follow the Codex Alimentarius, the international bundle of standards piloted by a commission under the Food and Agriculture Organisation in 1961. But huge sections of the food processing and retailing industries are in the unorganised sector, where testing does not penetrate very readily.

Metal in fruits and vegetables: How much is too much? – Mid-Day, 17 June 2015

A qualitative scan was conducted for vegetables and fruits (mid-day has a copy of the reports). What is surprising is that the Food
Safety and Standards Authority of India (FSSAI) has no yardstick or scientific database by which one can say that a certain quantity of metal in raw material is above permissible limits. A regularly updated database is needed especially when the environmental factors are changing i.e., climate, water, soil quality and, ultimately, the end produce is affected, disturbing the ecological food chain pattern.

How fit is India's food regulator?- Business Standard, 15 June 2015

The sobering fact is that large numbers of samples failing to pass the mandatory FSSAI test has not yet prompted an adequate policy response to meet the challenges of ensuring food safety and standards. For instance, the infrastructure certified to examine the food samples has remained poor and inadequate. It appears there are only 82 agencies that have been cleared by FSSAI to be eligible for conducting tests on food samples across the country.


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