x Abu Dhabi, UAEMonday 24 July 2017

Food safety at top of China menu

Building Brics: A number of scandals has left consumers nervous about the quality of what they eat and spurred Beijing to take the matter much more seriously.

Diners eat at a local restaurant in central Beijing. The Chinese government is worried about the raft of scandals surrounding safety in the food industry. David Gray / Reuters
Diners eat at a local restaurant in central Beijing. The Chinese government is worried about the raft of scandals surrounding safety in the food industry. David Gray / Reuters

Everyone must eat, but food is central to Chinese culture in fundamental ways that means the expression "Have you eaten?" is a standard greeting still for many Chinese.

Chinese people love to talk about food and pretty much all commerce seems to take place around some banquet table or other. A super-safe government job is even known as an "iron rice bowl".

So it is no surprise the government is worried about the raft of scandals about safety in the food industry, ranging from the use of the industrial chemical melamine in infant formula, which killed at least six children and made nearly 300,000 sick in 2008, to the use of toxic "gutter", or reused, cooking oil. Along the way we've had exploding watermelons and poisonous peanuts.

"People are taking food safety very seriously now. As far as the government is concerned, they have also started taking it seriously in terms of promotion this year," says Wu Heng, who founded the popular Zhichuchuangwai food safety website in 2011 and who writes food safety articles for China News Weekly magazine.

About 10 government departments and ministries under the state council, or cabinet, keep an eye on food safety in China, and there has been streamlining.

"Food is essential, and safety should be a top priority. Food safety is closely related to people's lives and health, economic development and social harmony," says the Chinese premier Li Keqiang.

"We must create a food safety system of self-disciplined food companies with integrity, effective government supervision and broad public support to improve overall food safety," adds Mr Keqiang, who is also the head of the government's taskforce on food safety.

In March, the central government set up a new agency called the food and drug administration, which increases the power of the government in overseeing food safety.

In May, the People's Supreme Court had a press conference explaining how the law would be applied for food-safety criminal cases. It said it would hand down death sentences to serious offenders in "gutter oil" cases to try and stop the use of recycled cooking oil by restaurants and food processors.

Sharon Palmer is the food director at PerkinElmer's analytical sciences and laboratory services division, which is the part of the company responsible for environmental and food detection technology.

She says the major food companies are working hard to do more than the basic requirement.

"What we see from China from the larger producers are going over and above the regulations. The regulations move slowly but the larger brands are going over the regulations on chemical contaminants," she says

"There is a huge burst for smaller processors to learn how to improve their food safety. Government regulators recognise the need to improve and streamline things, to provide better oversight from the tractor to the table," says Ms Palmer.

Most analysts date the beginning of the food safety debate as a constant issue in the media to the melamine scandal in September 2008, when six children died and a further 294,000 were made ill from drinking milk contaminated with the chemical melamine. Nearly 52,000 more were hospitalised. The chemical was added to watered-down milk, generally by small suppliers, to give it the appearance of high-protein levels.

Infant formula is a major case in point.

More than 70 per cent of Chinese mothers rely on baby formula rather than breast milk to feed their babies, as they believe they do not provide enough milk.

"Many in the industry see the melamine scandal as the straw that broke the camel's back," says Ms Palmer.

The increase in the use of social media means there is nowhere for unscrupulous food producers to hide because as soon as a suspect product is revealed, it goes viral on China's Twitter-like Sina Weibo service or WeChat.

"There are so many small food suppliers with five to 10 employees, thousands of companies which don't know the regulations or the technology around food safety," says Ms Palmer.

The milk powder scandals have spurred major consolidation in the dairy industry. Last month, China's largest dairy producer, China Mengniu Dairy, announced a HK$12.5 billion (Dh5.92bn) deal to buy Yashili International, a local infant-formula maker.

In terms of ensuring food safety it's going to take a long time, and Chinese consumers in the meantime will rely on imported food and big brands.

The president of PerkinElmer China, Nam-Hoon Kim, says the desire for better food safety is one of the major aspects growing the company's expansion there. PerkinElmer has built a centre of excellence in Shanghai; it is developing software there and a whole host of services all related to the China market. About 1,000 of the company's 7,500 employees are in China.

Mr Kim says food safety accounts for 40 to 45 per cent of the firm's business there and it has a solid working relationship with the food safety watchdog.

"Environmental business is growing very rapidly in the last three to five years. The environmental issue is a critical subject and it is growing very fast. It is going to happen in multiple dimensions on the food supply chain. Don't forget, China is the biggest food supplier - Korea imports 30 per cent of food ingredients from China. Japan imports food products from China," he says.

Analysts see the big influx of foreign companies as a positive to helping with food safety, but ultimately, foreign firms are not going to be able to save the Chinese market, says Mr Wu.

"The government should take action on contaminated soil. Farmers don't have the motivation to do anything, as they still get paid to sell poisonous rice," he says.

"The government needs to subsidise the farmer and spend time and money on the problem."

The bureaucracy also needs to be streamlined - with so many agencies responsible for food safety, it is easy for different departments to pass the buck.

Most people are not in any position to really do anything about food safety. The media and relevant departments give tips on how to recognise poisonous food or fakes.

"But we're missing the point. As consumers, it's not up to us to have to recognise fakes. What consumers can do is improve the accountability of the government and show their dissatisfaction and tell the government they want to buy safe food," says Mr Wu.

One step that people are taking, he says, is growing their own food - people in big cities such as Beijing or Shanghai are growing food on their balconies, or buying organic food at a higher price.

Working against the government's efforts to tackle fraud and safety issues is the fact that climbing food prices means suppliers are cutting costs in various ways, such as mislabelling and using cheaper ingredient product substitutions.

Some multinationals, such as the world's biggest food company Nestlé, adopt a varied approach. Nestlé uses imported milk powder for baby milk formula, but uses tightly controlled local products for its other dairy products.

Yesterday, Bloomberg reported Danone, another giant food producer, said it would cut prices for its main infant-formula products in China by as much as 20 per cent.

The move came after the government started an investigation into possible price-fixing by overseas producers.

The French company will cut prices of all its Dumex-branded products in the Asian country by between 5 and 20 per cent, starting today, it said.

High prices charged by companies including Danone, Mead Johnson Nutrition and Nestlé were the subject of a national development and reform commission investigation, the official People's Daily reported on July 2, citing the agency.

Chinese firms are going to have to learn from their international counterparts if domestic consumers are to fully regain their appetites.