The year 2015 holds a lot of important news for the PRC food industry: new food safety law (in force from Oct 1, 2015), new advertising law (in force from Sept 1, 2015), CFDA Administrative Measures for Food Recall (in force from Sept 1, 2015) and several standards being revised – both vertical and horizontal.

General Principles

The new food safety law comes into force on the 1st October 2015 and China Food and Drug Administration (CFDA) becomes the main, central authority for food safety. Other ministries who also share regulatory competencies in this matter are The Gen- eral Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) which overview food import/export and The Na- tional Health and Family Planning Commis- sion of Peoples Republic of China (NHPFC) which is in charge of risk assessment.

Traceability becomes a key principle of the new law as well as the so-called whole soci- ety approach. This approach aims to gather all players (producers, traders, caterers, authorities, consumers, media) in the pur- suit of food safety. Therefore it is important to note that the new law clearly outlines the obligations that producers and traders have to recall non-compliant or unsafe products.

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Sanctions become very harsh: beside criminal liability, punitive damages or fines can be up to 20 or 30 times the value of the non-compliant products.

Impact on Import Food

When dealing with import food without a specific vertical standard - which is not so rare - it is now possible to apply for ad hoc approval by submitting documents proving compliance with foreign and international safety standards.

Export of meat, aquatic and dairy products are only allowed by producers approved and listed on the specific pre-approved lists by AQSIQ.

Requirements are more relaxed for health food import: new Catalogues shall be issued for health food ingredients and for allowed claims (up to now, only 28 claims). Food supplements and health foods using ingredients in the Catalogue will not need  to undergo the extenuating registration pro- cedure with CFDA (up to two years), and will only need a simpler, shorter (and cheaper) record procedure.

Baby-formula

The new Food Safety Law includes specific provisions dedicated to this product – very likely the most sensitive: the new law expressively states it is forbidden to import in bulk and then repackage baby-formula. Baby-formula therefore shall need to be already imported in its minimum retail package – with a Chinese label directly printed (not pasted) on the package (such a requirement is de facto, often applied also to UHT milk) – and with at least a 3 month shelf life from custom clearance.

Another provision, which prohibits baby formula producers from selling different brands from the same formula, appears aimed at targeting domestic producers (up to 30 brands per producer!) rather than foreigners – although the definition of “same formula” needs to be better sharp- ened. For the same reason, CFDA registra- tion is required for baby formula (the law does not specify whether only domestic or also import).

Perhaps the biggest news for this product concerns claims: GB 13432/2013 – just entered into force on July 1, 2015 – bans any content and comparative claim for baby formula 0-6 months. Content and function claims may be executed for other kinds of foods for special dietary use, but to a narrower extent than ordinary food. Interestingly it will be possible  to use nutrition claims without a pre-defined wording under PRC law: as long as supported by international or a foreign country’s regulations.

E-commerce

Today’s retail transactions are largely con- ducted through e-commerce platforms. The new regulation takes this into due consider- ation and finally requires e-platforms to:

  1. implement a real name registration system for food traders,
  2. exclude food traders without the due legal qualifications,
  3. cooperate in a proactive way to take down such e-commerce platforms who’s case is a violation of food laws

Labeling and Advertising: More Protec- tion for Food Companies

In the case of non-compliant products, the new food safety law raises the amount of damages that can be claimed by the con- sumer (up to 10 times the price paid, or 3 times the damage suffered and in any case never less than 1000 RMB).

The (very) good news lies in the provision excluding such damages in the case of mislabeling which neither have a real im- pact on the product safety nor mislead the consumer. This is a very important provision, because as of today a huge number of complaints are filed by so- called “professional consumers” for mere typos (more and more similar to organisa- tions pursuing profit from non-compliant products by exploiting provisions of the aw in bad faith). This problem exploded in December 2013, when the Supreme Court clearly stated that the consumer shall be protected in food and drug litigations even in cases of so-called bad faith purchase.

Another interesting provision are punish- ing those – even from a criminal liability perspective – the media, consumers and anybody for spreading false news about food safety or food incidents and disturbing the public order. It will be very interesting  to see if and how such provisions will be enforced – for instance in cases of rumors  or boycott campaigns on social media.

New Advertising Law

Finally, with the new advertising law in force as of September 1, 2015. In summary, below is an outline of the new provisions:

  • e-advertisement (identity of sender shall be disclosed),
  • limits to use of testimonials/endorsers (never under 10 years old, and they really have tried the product),
  • for health food (mandatory CFDA pre- approval)
  • infant food (which can never claim to be «totally or partially equivalent to breast milk).

Sanctions are harsh and it will be important to note that misleading advertising will lead to joint liability of food producer, distributor, advertising agent and publisher.

Sanctions

  • Non compliant health food advertis- ing: fines up to 1M RMB
  • False food advertisement: liability of adv agent, publisher, designer, pro- ducer and trader; fines up to 2M RMB
  • False propaganda: liability of civil organizations/individuals,   producer and trader
  • Endorsement by food authorities, in- dustry/consumer associations: illegal gain confiscated
  • Severe false advertisement: CFDA sus- pends sale + public announcement
  • Spreading false food safety informa- tion disrupting public order: criminal liability
  • Special liability for media, includ- ing reputation rehabilitation, loss compensation, apology, eliminating influence, etc..

Health-food Advertising Shall not Contain the Following:

  • Any assertions or assurances about efficiency or safety
  • Prevention and treatment of disease
  • Declaring or implying the goods are necessary to health
  • Comparisons with other drugs or health care food
  • Endorsements/testimonials;  or
  • Health-food advertisements shall de- clare “This product is not a substitute for drugs”
  • Infant food advertising cannot claim as total/partial substitute of breast milk

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