Normally perceived as a very small piece in the whole picture of production and distribution, product labeling is seldom taken seriously by distributors. However, the consequences of improper label are exceptionally severe in serious cases, including but not limited to:
- Provision of whereabouts of all products with improper label, removal of same from markets as required by competent legal execution authorities, as well as absorbing all the costs and losses of aforementioned actions;
- A fine of less than 30% of the value of the products with improper label, and confiscation of illegal income, if any; and,
- Reputation damage as a result of disclosure of and/or punishment on label violations.
The year of 2013 has witnessed an exponentially strengthened enforcement by administrative authorities, such as the Administration of Quality Supervision, Inspection and Quarantine (“AQSIQ”) and the Administration of Industry and Commerce (“AIC”), and as a result violations have been found with some worldwide known brands.
- From January to May of 2013, a few well-known brands were penalized on account of label violations in connection with children’s clothing alone;
- In January 2013, Guangzhou AIC made an announcement on quality inspection over jewelry, jade, diamond and precious metal products in distribution, indicating that there were 61 categories of products in violation of labeling requirements under Product Quality Law and other relevant regulations and standards at all levels of China in connection with precious metals, jewelry and jade products;
- In April 2013, Beijing Dongcheng AIC found relevant to a certain brand a large quantity of product labels with false information during a sampling inspection of clothes, which according to an officer of AIC may constitute a fraud to consumers; and
- In July 2013, Zhejiang AIC released a report regarding its sampling inspection of children’s clothes of both domestic and overseas well-known brands for sale on the market and disclosed that several brands have committed product labeling violations.
In China, product labeling must be in line with the standards of various levels (i.e. national, provincial and/or industrial), as well as the standards for different elements of product quality including the product itself, material used, consumer safety as well as baneful elements contained therein and so on). The complexity becomes worse when these different standards applicable to the same product are not necessarily consistent with each other, which is often the case in practice, and it is even not easy to find all the applicable standards.
Since the administrative authorities are strengthening labeling enforcement, the risks of non-compliance has become urgent. As such, it is of great importance, for consumer products in particular, to review of your current labeling practices and rectify violations if any in a timely manner.