1 the labelling scheme on nutrition information background information, preparatory work and way...
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The Labelling Schemeon Nutrition Information
Background information, Preparatory work and
Way forward
August 2005
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Outline
Results of the public consultation exercise
Results of the Regulatory Impact Assessment (RIA)
Revised proposal
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Aims of Nutrition Labelling
Facilitate consumers in making healthy food choices;
Encourage food manufacturers to apply sound nutrition principles in the formulation of foods which would benefit public health; and
Regulate misleading or deceptive labels and claims on nutrition information.
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Original Proposal(Consultation document released in Nov 2003)
Energy plus 9 core nutrients:
Protein
Carbohydrate
Total Fat
Saturated Fat
Sodium
Sugars
Cholesterol
Dietary fibre
Calcium
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Phase I
Labelling of prepackaged food with nutrient-related claims and / or any nutrition labels
Phase II
All prepackaged food (except exempted items)
Grace periodPhase I: 2 years after enactmentPhase II: 3 years after the implementation of Phase I
Original Proposal(Consultation document released in Nov 2003)
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Public Consultation
Public consultation period - Nov 2003 to Jan 2004
Two public forums
Subsequently - District Councils (DC) Meetings; and
Technical meetings with the trade
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Results of Public Consultation
Received about 180 written submissions
Majority (74%) supported the implementation of mandatory nutrition labelling scheme
Other comments (13%) include:Implementing voluntary nutrition labelling scheme
Accepting nutrition labels from source country
Regulating only prepackaged foods with nutrient-related claims
Reducing the scope of the scheme
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The 15 DCs we visited generally supported our proposal;
Views expressed in two-thirds of the DCs suggesting speeding up implementation; and
Some DCs were concerned about compliance costs.
Results of Public Consultation (Cont’d)
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95% supported the Government’s regulatory measures on nutrition labelling;
87% considered nutrition information important;
81% said they would use nutrition information if all prepackaged food would be labelled accordingly; and
95% supported standardising the format of nutrition labels.
Opinion Survey (January 2004)
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Regulatory Impact Assessment (RIA)
In response to the trade’s request and public opinion, the Administration commissioned a consultant to conduct a Regulatory Impact Assessment.
Objective
To study the overall costs and benefits of introducing nutrition labelling to the society, including the potential benefits of lowering the overall health costs.
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OptionsOption Phase I Approach Number of nutrients
I
Labelling of prepackaged food with nutrient-related claim only
energy + 9 core nutrients
II energy + 7 core nutrients
III energy + 5 core nutrients
IV energy + 3 core nutrients
V
Labelling of prepackaged food with nutrient-related claim and / or any nutrition labels
energy + 9 core nutrients
VI energy + 7 core nutrients
VII energy + 5 core nutrients
VIII energy + 3 core nutrients
OriginalProposal
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Options (Cont’d)Option Core Nutrients
I and V energy, protein, carbohydrate, total fat, saturated fat, cholesterol, sugars, sodium, dietary fibre, calcium.
II and VI energy, protein, carbohydrate, total fat, saturated fat, sodium, cholesterol, sugars.
III and VII energy, protein, carbohydrate, total fat, saturated fat, sodium.
IV and VIII energy, protein, carbohydrate, total fat.
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Economic Impacts(i.e., the costs for complying with the proposed scheme)
Testing costs
Relabelling costs
Impact of lost products
Government costs (including enforcement, education and promotion)
Trade cost*
* The percentages of prepackaged foods requiring relabelling and/or testing under various options (according to the market survey, currently there are approximately 22,000 product lines in the local market):
Most stringent options (I and V) >99% ; Most lenient options (IIV and VIII) >75%
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Benefits of the Proposed SchemeNutrient Nutrient-related Disease
Energy Obesity
Total fat Obesity, Cardiovascular diseases
Protein Renal diseases
Carbohydrate Obesity, Diabetes
Sodium Hypertension, Renal diseases, Stomach Cancer
Saturated fat Cardiovascular diseases, Diabetes, Breast cancer
Cholesterol Cardiovascular diseases
Sugars Obesity, Diabetes, Colorectal cancer
Dietary fibre Diabetes, Cardiovascular diseases, Hypercholesterolemia, Colorectal cancer
Calcium Osteoporosis, Colorectal cancer
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Benefits of the Proposed Scheme (cont.’)
Quantifying the Reduction in Nutrition-related Diseases:
The proportion of food consumed that is likely to be prepackaged
The likely changes in the proportion of consumers who would read and use nutrition labels
Percentage of the population who would be affected by a particular nutrient
Quantifying the Financial Benefits:
Savings from avoided public hospital admissions
Corresponding saving from General Practitioner visits and medicines associated with each of the nutrition-related conditions
Savings from a reduction in lost productivity due to hospital admissions
Premature deaths avoided due to a reduction in nutrition-related diseases
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Cost-Benefit Analysis –Trade Costs
After fully implementing the proposed nutrition labelling scheme, for every HK$100 spent on prepackaged foods, there will be less than HK$1 increase in food price if the trade costs is totally transferred to consumers.
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A number of niche products with low sales revenue and
profit might cease to be imported, which might amount
to between 5% and 10% of product variety* on sale in
Hong Kong.
If the most stringent option (I or V) is implemented, up to
191 SMEs (less than 1% involved in the import and
retail of food products) might be significantly affected.
* Currently, there are approximately 22,000 prepackaged food product lines in the local market
Cost-Benefit Analysis –Economic Costs
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Depending on the option to be implemented, the total benefits accrued over a 20-year period range from HK$ 800 million to 11,000 million
Cost-Benefit Analysis –Economic Benefits
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Cost-Benefit Analysis
Conclusion 1
The net benefits increase as the number of core nutrients increases.
Conclusion 2
With the exception of the options to regulate only energy plus 3 core nutrients, all the other options would present net economic benefits to Hong Kong.
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Our Latest ProposalFactors for Considerations -
Local public health situation
Related Codex Guidelines and International practices
Comments and suggestions collected from the public consultation and technical meetings with the trade
Results of the Public Opinion Survey
Results of the RIA Study
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Our Latest Proposal
Phase ILabelling of prepackaged food with claims only;
Energy plus 5 core nutrients
(protein, carbohydrate, total fat, saturated fat, sodium); and
A 2-year grace period before implementing Phase I.
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Phase IIAll prepackaged food, except those exempted;
Energy plus 9 core nutrients
(protein, carbohydrate, total fat, saturated fat, sodium, cholesterol, sugars, dietary fibre, calcium); and
Phase II will be implemented 2 years after the implementation of Phase I.
Our Revised Proposal (Cont’d)
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Trade and Economic Costs
Phase I initial trade cost = HK$ 38 million
Phase II initial trade cost = HK$ 202 million (for testing and relabelling of prepackaged food affected by Phase II)
If the trade cost is totally transferred to consumers, for every HK$100 spent on prepackaged foods, there will be less than HK$1 increase in food price
The total trade cost and economic cost# accrued over a 20-year period are estimated to be HK$ 1,689 million and HK$ 1,939 million respectively.
Under the worst-case scenario, up to 191 SMEs (less than 1% involved in the import and retail of food products) might be significantly affected.
Latest Proposal –Cost & Benefit Analysis
# Economic cost Includes trade cost; all costs are Net Present Value (NPV).
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Economic Benefits
Annual maximum benefits
Phase I ~ HK$ 250 million
Phase II ~ HK$ 1,540 million
After full implementation (i.e., Phase I + II) ~ HK$ 1,790 million
The total benefits# accrued over a 20-year period is estimated to be HK$ 10,500 million.
Latest Proposal –Cost & Benefit Analysis
Figures of benefits are Net Present Value (NPV)
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The total net benefits1 accrued over a 20-year period is estimated to be HK$ 8,570 million#.
Latest Proposal –Cost & Benefit Analysis
1 Net benefits = Benefits – Economic Costs
# Figures of benefits are Net Present Value (NPV)
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JustificationsStriking the right balance between achieving our long-term public health objectives and helping the trade in adapting to the changes in the short run.
Reducing Phase I requirementsEnergy plus 5 core nutrients
Regulating only prepackaged foods with nutrient-related claims
Speeding up Phase II implementationPhase II will be implemented two years after the implementation of Phase I
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Justifications (cont.’)The revised proposal will present substantial net benefits to Hong Kong through savings in health care costs, avoided productivity losses and reduction of premature deaths.
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Next StepsDraft the legislation; aim to introduce the legislative amendments to the LegCo in 2006
Continue dialogue with the trade and the relevant professionals
Develop guidelines for implementation and reference testing methods
Establish a set of local Nutrient Reference Values for nutrition labelling purposes
Strengthen public education