After the 2008 contaminated milk powder incident, which resulted in the reported deaths of six babies and the sickness of around 300,000 babies, the Chinese government strengthened its control over the food industry. On February 28, 2009, the Chinese government passed the Food Safety Law of the People’s Republic of China (“Food Safety Law”) after two years of deliberation and review. The Food Safety Law came into effect on June 1, 2009 and superseded the 1995 Food Hygiene Law.
The Food Safety Law strengthened the government’s supervisory powers, unified food safety standards, changed the licensing system, and increased liabilities for non-compliance. Food producers, distributors, exporters and importers should be aware of the changes that the Food Safety Law introduces and take steps to ensure that their operations comply with the new requirements and procedures.
Major Impacts on Chinese Food Industry
Centralized Government Administration of Food Safety
Under the Food Safety Law, a Food Safety Commission will be established under the State Council to act as the highest authority to oversee food safety in China. Currently, the Food Safety Commission is still at the preparation stage.
It is expected that the Food Safety Commission will coordinate and supervise the main authorities currently responsible for food safety in China, which include the Ministry of Agriculture, General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), State Administration for Industry and Commerce (SAIC), Ministry of Health (MOH), and State Food and Drug Administration (SFDA).
Food Standards Unified
Under the Food Safety Law, thousands of disparate rules and standards that currently govern the Chinese food industry will be consolidated into one unified, published, national food safety standard. MOH has published a draft version of the Administrative Rules on National Food Safety Standards, which contains detailed procedures for preparing, reviewing and publishing the national food safety standards. MOH has solicited public comments on its draft Administrative Rules.
MOH has, after one year of consolidation and compilation, also published a draft version of the Safety Standards for Dairy Products for public comment. After going into effect, the Safety Standards will serve as the unified product safety standards for all dairy products in China.
Three Certificates to Replace the Old Food Hygiene Certificate
The Food Safety Law replaces the old food hygiene certificate with three new certificates, namely, the Food Distribution Certificate, the Catering Service Certificate and the Food Production Certificate. SAIC published the Administrative Measures on Food Distribution Certificates on July 30, 2009, specifying the procedures and requirements for obtaining the Food Distribution Certificate. SFDA also published a draft version of the Administrative Measures on Catering Service Certificate for public comments. After going into effect, these Administrative Measures will serve as the detailed rules specifying the procedures and requirements for the application, issuance and administration of Catering Service Certificates in China.
Strengthened Control over Food Additives
The Chinese government introduced provisions into the Food Safety Law that confirm and strengthen its control over food additives.
A company must obtain a production permit in order to produce food additives. National food safety standards regarding the type, usage and amount of the food additives must be strictly followed. No chemical other than food additives may be added into food products during the production process.
AQSIQ is now preparing the detailed measures to implement the above provisions under the Food Safety Law.
Inspection Exemption Policy Abolished
Responding to public criticism that most contained milk powder products were exempt from inspections, the Food Safety Law abolished the inspection exemption policy for food products implemented by the PRC State Council in 1999.
Imported Foods under Stricter Control
All foreign food distributors and producers that import food products must register with the State entry-exit inspection and quarantine authorities. They must record the foods imported and distributed in China, and keep the records for at least two years. AQSIQ published the draft rules to implement these registration and filing requirements for public comment in July 2009.
All imported food products and food additives are subject to the national food safety standards of China. No pre-packaged foods may be imported into China without appropriate Chinese labels.
Mandatory Internal Inspection and Record System
The Food Safety Law requires the strengthening of the internal control of food producers, distributors, importers and exporters over the procurement, distribution, storage and delivery of foods. According to the Food Safety Law, food producers in China must establish an internal inspection and record system for raw materials and their products. Food distributors must also establish internal systems to record and inspect food products procured from suppliers. The local government authorities in many cities of China have published various notices, rules and regulations to implement the requirements under the Food Safety Law.
Stricter Control over Food-Related Advertisements
Statements regarding the prophylactic, therapeutic or diagnostic functions of products are not allowed in food-related advertisements under the Food Safety Law. No food safety supervision authority, food inspection institution, food industry association, or consumer association may “recommend” any food to consumers by any means. Any entity or individual that endorses any food product that is unsafe will bear joint liability with food producers and distributors.
Food Recall System Improved
Under the Food Safety Law, in addition to AQSIQ, SAIC and SFDA also play important roles on food products recalls. The law increases the administrative penalties for non-compliance with government-ordered recalls.
Increased Penalties for Non-Compliance
The Food Safety Law significantly increases the administrative penalties and civil liabilities for violations by food producers and distributors. In addition to the normal compensation for their losses, consumers may now claim punitive damages equivalent to 10 times the price of the food product from the producer or seller. If the Food Production Certificate of any food producer is revoked due to a violation of the Food Safety Law, the person-in-charge of the producer will be banned from taking up any management position in the food production business for five years.
Although it took a national calamity to provoke them, the post-milk power incident Food Safety Law and its implementing regulations and administrative measures closed many loopholes and significantly tightened China’s food safety regime.