ASSOCHAM FMCG Summit: How changing standards will impact on FMCG Companies?
Theme Paper for ASSOCHAM FMCG Summit [1]
Changing Food Safety Standards and
Environment Standards and their impact on FMCG Companies
By:
Vijay Sardana
With every change in food laws, corporate
managers feel very irritated because these changes are forced on them. It
forces them to re-think and re-work and once again disturbs the well-established
supply chain. The argument is why we need it, when everything was fine? How
many times in a life of company changes labels for its products? How many times
companies modify its label to launch a scheme? How many times food laws are
changed in a life of company?
It is human nature; we
don’t want change when we are comfortable. Whether it is pollution, global
warming, traffic diversion, change in accounting laws, change in phone number,
home address, so same is with changes in food laws. Unfortunately, neither consumers’
expectations nor needs are static. At the same time, food safety is changing
with new scientific findings; it is also no more static.
That is why we need
competent and qualified supply chain managers to manage and minimize risks
including food safety risks. Good Supply chain managers can quickly fix the
issues and move ahead.
Why New Food Safety Laws
are emerging?
Initially we had food laws i.e. PFA Act, based
on knowledge of 1954. There was no WTO. There was no internet. There was no
Google. Global integration was negligible. Citizens were also not alert. Media
was in very infant stage. Legal system was also taking shape. India was just 7
years old as independent country from British occupancy.
When the Food Safety and Standards Act of India
came in 2006, Indian successfully entered 21st century by
becoming information technology hub for the world. There was no reason to
expect that only industry voice will be heard and other stakeholders will have
no role. If anyone thinks that only one group can move the things for the
rest, it is nothing but day dreaming. Policy makers, Courts and NGOs are also
equipped with same set of knowledge and information base which is used by
various stakeholders. Now we are in the world which somehow ensures level
playing field. Concept of lobbing is fading ways, concept of education and
awareness is creeping in.
Citizens are demanding their rights
The availability of safe food improves the
health of people and is a basic human right. Safe food contributes to health
and productivity and provides an effective platform for development and poverty
alleviation. People are becoming increasingly concerned about the health risks
posed by microbial pathogens and potentially hazardous chemicals in food.
According to WHO and FAO studies, up to
one-third of the populations of industrialized and developed countries are
affected by food borne illness each year, and the problem is likely to be even
more widespread in developing countries. The poor are the most susceptible to
ill health. Food and waterborne diarrheal diseases, for example, are
leading causes of illness and death in less developed countries, killing an
estimated 2.2 million people annually, most of whom are children.
Social and economic structures are changing:
Due to globalization of trade, emerging trends
in global food production, processing, distribution and preparation present new
challenges to food safety. Food grown in one country can now be transported and
consumed halfway across the world. People demand a wider variety of foods than
in the past; they want foods that are not in season and often eat away from
home. Institutionalizing children in schools and childcare facilities and a
growing number of elderly persons in hospitals and nursing homes means that
food for many is prepared by a few and can therefore be the source of major
foodborne disease outbreaks. Greater life expectancy and increasing numbers of immune-compromised
people mean a larger vulnerable population for whom unsafe food is often an
even more serious threat.
WTO and WHO and its Member States have responded
to these new challenges by recognizing that protecting food safety is an
essential public health function. Food safety must be addressed along the
entire food chain by measures based on sound scientific information at both
national and international levels.
Global laws on Food safety and Environment
matters will be identical:
Corporate are no more private properties. They
are performing public duties but charging for it as profits from the willing citizens.
Their action impact safety and health of the society. They have to accountable.
Corporate managers will be forced to implement these changes in public
interest. With passage of time, on the matters of food safety and environment,
world will be almost flat. It means there will be minor difference between laws
of different countries on these issues. With the passage of time, food and
environment laws will make various stakeholders more and more accountable for
their actions and they will be forced to bear consequences by other
stakeholders.
Why is food safety an essential public health
issue?
Serious outbreaks of food borne disease have
been documented on every continent in the past decade, illustrating both the
public health and social significance of these diseases. Consumers everywhere
view food borne disease outbreaks with ever-increasing concern. Outbreaks are
likely, however, to be only the most visible aspect of a much broader, more
persistent problem. Food borne diseases most seriously affect children,
pregnant women, the elderly and people already affected by other diseases. Food
borne diseases not only significantly affect people’s health and wellbeing, but
they also have economic consequences for individuals, families, communities,
businesses and countries. The experience of Dropsy cases due to Edible oil
contamination and recent controversy of pesticide residues in carbonated soft
drinks and its impact on sale of products are clear example of consumer concern
about food safety. These diseases impose a substantial burden on health-care
systems and markedly reduce economic productivity. Poor people tend to live
from day to day, and loss of income due to food borne illness perpetuates the
cycle of poverty.
On the other side, these reasons provide enough
grounds to impose non-tariff barriers for food trade to protect domestic
markets as well. To challenge these new non-tariff barriers will also need
equal amount of scientific studies and justification to prove otherwise.
New Challenges to Public health and Food Safety
The globalization of the food trade offers many
benefits to consumers, as it results in a wider variety of high-quality foods
that are accessible, affordable and safe, meeting consumer demand. A diversity
of foods in a balanced diet improves nutritional status and health. The global
food trade provides opportunities for food-exporting countries to earn foreign
exchange, which is indispensable for the economic development of many countries
and for improving the standard of living of many people.
However, these changes also present new
challenges to safe food production and distribution and have been shown to have
widespread repercussions on health. Food safety programmes are increasingly
focusing on a farm-to-table approach as an effective means of reducing
foodborne hazards. This holistic approach to the control of food-related risks
involves consideration of every step in the chain, from raw material to food
consumption. Hazards can enter the food chain on the farm and can continue to
be introduced or exacerbated at any point in the chain until the food reaches
the consumer.
The integration and consolidation of
agricultural and food industries and the globalization of the food trade are
changing the patterns of food production and distribution. These conditions are
creating an environment in which both known and new food borne diseases can
become prevalent. Food and feed are distributed over far greater distances than
before, creating the conditions necessary for widespread outbreaks of food
borne illness.
In a recent crisis, more than 1500 farms in
Europe received dioxin-contaminated feed from a single source over a two-week
period. Food produced from animals given this contaminated fodder found its way
onto every continent within weeks. The effects of exposure to dioxin from this
source on public health may become known only after years of investigation. The
international spread of meat and bone meal prepared from cattle affected by
bovine spongiform encephalitis (BSE) needs no further description. The full
economic consequences of such incidents and the anxiety raised among consumers
are still being assessed.
Other factors account for the emergence of food
safety as a public health issue. Increasing urbanization leads to greater
requirements for transport, storage and preparation of food. Increasing wealth,
an urban lifestyle and sometimes a lack of facilities mean that people eat much
of their food away from home. In developing countries, food is often prepared
by street vendors. In developed countries, up to 50% of the food budget may be
spent on food prepared outside the home. All these changes lead to situations
in which a single source of contamination can have widespread, even global
consequences. Developing countries in particular are experiencing rapid changes
in their health and social environments, and the strains on their limited
resources are compounded by expanding urbanization, increasing dependence on
stored foods and insufficient access to safe water and facilities for safe food
preparation.
Although significant progress has been made in
many countries in making food safer, thousands of millions of people become ill
each year from eating contaminated food. The emergence of increased
antimicrobial resistance in bacteria causing disease is aggravating this
picture. The public is increasingly aware of the risks posed by pathogenic
microorganisms and chemical substances in the food supply. The introduction of
new technologies, including genetic engineering and irradiation, in this
climate of concern about food safety is posing a special challenge. Some new
technologies will increase agricultural production and make food safer, but
their usefulness and safety must be demonstrated if they are to be accepted by
consumers. Furthermore, the evaluation must be participatory,
transparent and conducted using internationally agreed methods.
Until recently, most systems for regulating food
safety were based on legal definitions of unsafe food, enforcement programmes
for the removal of unsafe food from the market and sanctions for the
responsible parties after the event. These traditional systems cannot respond
to existing and emerging challenges to food safety because they do not provide
or stimulate a preventive approach. During the
past decade, there was a transition to risk analysis based on better scientific
knowledge of food borne illness and its causes. This provides a preventive
basis for regulatory measures for food safety at both national and
international levels. The risk-based approach must be backed by information on
the most appropriate and effective means to control foodborne hazards.
Food Hazards don’t respect borders and brands:
Food borne disease is major cause of concern
worldwide and it takes a major toll on health worldwide. Millions of people
fall ill and many of them die as a result of eating unsafe food. Due the growing
incidences of food borne illnesses, the Fifty-third World Health
Assembly in May 2000, adopted a resolution calling upon the World Health
Organization (WHO) and its Member States to recognize food safety as an
essential public health function. The resolution also called on WHO to
develop a Global Strategy for reducing the burden of food borne disease.
Major
issues in food safety
Foodborne illness can be caused by
microbiological, chemical or physical hazards. An increasing body of scientific
data is highlighting the nature and extent of these risks, although several
areas of information gathering, such as the surveillance of foodborne illness,
need to be strengthened. There is also mounting concern about new technologies
like the introduction of genetically modified organisms into the food supply.
Food Safety and Food
Marketing:
Very often it is observed that many decision
makers and managers, due to their own background and limited experience in food
management system are not willing to appreciate the food safety concern. Very
often senior management is only concerned about the turnover and profitability.
It very clear that food safety is neither easy nor cheap. It needs skills and
knowledge of the subject. Major corporate world over face food recalls. Clearly
indicates things are not in control even at big corporate and big brand owners.
Assuming that everything is fine in my company can be a disaster. Senior
managers must audit food safety regularly and companies must be audited to find
out what percentage of turnover is spent upon food safety related issues.
Companies spend money to audit their financial health but rarely do they take
similar interest in food safety matters.
Cost estimates for foodborne illnesses in India:
According to WHO, approximately 1.8 million
children in developing countries (excluding China) died from diarrhoeal disease
in 1998, caused by microbiological agents, mostly originating from food and water?
One person in three in industrialized countries may be affected by foodborne
illness each year. In the USA, some 76 million cases of foodborne illness,
resulting in 3,25,000 hospitalizations and 5,000 deaths, are estimated to occur
each year. There are only limited data on the economic consequences of food
contamination and foodborne disease. In studies in the USA in 1995, it was
estimated that the annual cost of the 3.3–12 million cases of foodborne illness
caused by seven pathogens was US $6.5–35 billion. The medical costs and the
value of the lives lost during just five foodborne outbreaks in England and
Wales in 1996 were estimated at UK£ 300–700 million. The cost of the estimated
11 500 daily cases of food poisoning in Australia was calculated at AU$ 2.6
billion annually.
What is the cost of unsafe food to India?
Why Parliament and
courts have not ordered these cost estimation till date to calculate the damage
to the national health and finances?
Why CAG is not
calculating this national loss?
Food
Safety Assurance: Challenge for India’s Food Industry
The differentiation between “Product of Export
Quality” and “Products for Domestic Market” in the name of food quality and
safety itself exposes the concern and commitment about food safety in India by
all-important stakeholders like producers, manufactures and government
policies. This differentiation in food safety standards itself is a shameful
admission that Indian manufactures cannot offer safe food to common man in
India what they are offering to consumers outside India and this admission
itself is a major hurdle for growth in food exports.
Traditional food safety measures, employed by
producers, processors and distributors have not been efficient in preventing
foodborne disease over the last decades. This is clearly evident from the
rejection of export consignments of food products in world market and also
increasing imported food bill shows consumers desire for better quality.
Where there is a trust, there is a turnover:
India’s goal of improving exports of food
products can only be met with success by reducing the public health burden of
foodborne disease. This can best be achieved through systematic application of
risk analysis and capacity building.
Structures and systems must therefore be
developed, in close coordination with international agencies at national,
regional and international levels to survey foodborne disease, conduct risk
assessments and implement risk management strategies.
Capacity building and coordination of scientific
effort are essential roles of international agencies and are important elements
of Food Safety Strategy, but these must be combined with strong commitment and
resources by Government of India and State governments in order to ensure food
safety through targeted, risk-based prevention initiatives.
Effective participation of all stakeholders,
especially producers, processors, food distributors and research organizations
is needed in setting standards as well as guides for food safety initiatives
that are acceptable to buyers both in domestic as well as international
markets.
While the existing activities in food safety
have focused primarily on hazards in food, the proposed strategy should address
the broader concept of risk along the entire food production chain. It will
take into consideration the need for sustainable agricultural production
systems in all regions and will redirect some of the existing approaches to
ensure that they meet the emerging challenges of global food safety.
The biggest hurdle and challenge to achieve food
safety in India is not the money or technology. It is outdated mindset and
ignorance about the ground reality among exporters and decisions makers at all
levels both in private as well government organizations. Unfortunately money
cannot bring the change it is the knowledge about changing markets that will
play major role, role of money is limited to money will facilitate change.
In globalized economy, consumers have the
options but what about producers, processors and distributors. If consumers
want safe or better food they may go for imported foods.
Please note consumers have choice to change the
suppliers and veto to say NO to your product and brand. Without assured food
safety, what will happen to your brand and company in basic question?
Role of FSSAI:
To develop a system is simple and less time
consuming. We are not asking relaxation in food safety but speedier decision
making so that time and money can be saved. Safe Innovation should be
supported.
Parliament should provide enough resources to
food safety and quarantine functions to protect national health. Accountability
of field staff in case of food safety outbreak in their jurisdiction and
functional area should also be looked at.
The way forward:
According to the author, in food business or any
FMCG company, “Where there is a trust, there is turnover.” Food Business is a recession proof industry.
People are willing to pay premium provided they are sure of quality and safety.
The best way to improve profitability is to improve food safety perception
about your products among masses.
Disclaimer: Views expressed in this article are
personal.
@ @ @
Comments
Post a Comment