International Food Safety and the Global Food

Chain:China’s role

Richard Gilmore President/CEO of The GIC GroupManaging Director of Global Food Safety Forum

Background

•China–Growing food product exporter– Ingredient supplier

internationally

Background

Incidents• US

– Salmonella• Egg, 2010• Peanut butter, 2008 - 2009

• EU– Dioxin

• Germany and others, 2010

Background

Incidents• China

– Melamine-tainted infant formula, 2008 and 2010

– Dairy products containing leather-hydrolyzed protein, 2011

– Cenbuterol-tainted pork, 2009 and 2011

Xinhua news

• Probe into pork problem in ChinaMarch 23 -- The State Council's call for a thorough probe

into the scandal of feeding pigs with banned substances (ractopamine and clenbuterol) will help re-establish the public's confidence in the government.

• China's top legislature launches new round of inspection on food safety law implementationMarch 24 -- The Standing Committee of China's National

People's Congress (NPC) launched a new round of national inspections to ensure the country's Food Safety Law is properly enforced.

• China targets dairy products, meat in food safety campaign for 2011March 25 -- China has rolled out its annual working plan to

beef up food safety in 2011, as more food safety scandals have entered media spotlight and aroused public concerns.

Factors increasing food-borne disease

• Increased consumption of high-value food commodities– Meat – Poultry– Fresh produce

• Doubling of the global demand for food and of the international trade in food

Factors reducing food-borne disease

• Ability to first detect and investigate a food safety issue and then to develop effective control measures

• Key role– Intergovernmental organizations– International bodies

Threat to the global food chain

• Pathogens and non-pathogens• Fraud• Weak regulatory• Defrauding the consumer

Problems

• Increasingly inter-connected global food supply chain vs. fractionated management of the food chain

• Direct and indirect public health threats• Rising costs of remedies

– Decreased sales– Recalls and destroyed product, and – Penalties from injured parties seeking compensation

through court system

• Dislocation effects on a multiplicity of trade and economic indicators

• Lack of consumer and commercial incentives to underwrite national/international food safety systems

China dairy case

• Rapid growth fueled by large investments from multinational dairy firms– Highly modern and concentrated

processing sector vs. raw materials from millions of small, poor and uneducated traditional farmers

– Government support and encouragement for growth vs. little emphasis on inspection and safety issues

China dairy case

• Melamine crisis prompted Chinese new food safety law

– Mandate regular inspections with no exemptions

– New allowable tolerances for melamine in dairy products

Legislations and enforcement

• Food Safety Law, China, 2009

• Food Safety Modernization Act, US, 2011– Science-based and preventive– Import-Related Provisions

• Accreditation Process for Third Party Auditors

• Foreign Supplier Verification Program• Voluntary Qualified Importer Program• Third Party Certification

Legislations and enforcement

• Lack of harmonization of standards/ certification

• Regional differences in enforcement/ compliance

• Overlap and lack of enforcement resources in place

• Insufficient collaboration platforms for public/ private sector

Non-government initiative

• Transaction oriented strategy• Building an International

Collaborative Network standards

Non-government initiative

• Transaction oriented strategy– Creating a collaborative industry and

industry/public sector platform – Problem solving at operational level, food

safety training, platform provider of dialogue – Designing risk minimization strategies for

Asian markets and global food chain

Non-government initiative

• Building an International Collaborative Network standards– Certification

• HACCP– SQF– BRC– IFS

– Third party audit• Industry accepted• Government recognized

Chinese consumers

• Chinese consumers have the highest willingness to-pay for

1. Government certification program2. Third-party certification3. Traceability system4. Product-specific information label

Survey of Beijing consumers

• Consumer awareness, willingness to pay, and price premiums for HACCP-certified milk products– <20% respondents was aware of HACCP– After receiving information on HACCP

• nearly all respondents were willing to pay a modest price premium for HACCP-certified products

• Price of products with HACCP labels in Beijing supermarkets about 5% higher

Non-government initiative

• Building an International Collaborative Network standards– Harmonization and International food

safety standards

Non-government initiative

• Conversation platform– Trade delegation

visits to US and China

– Workshop or on-site

Non-government initiative

• International expert resources and professional expertise

• Capacity building– GFSF Food Safety Workshop

• Meat, November 2010• Dairy, June 2011• Exporters, June 2011

Non-government initiative

• Rapid response team• Voucher System

Thank you!