FSSAI scraps existing approvals process, move leaves industry confused

Shambhavi Anand  |  28 August 2015, 8:21 AM IST

The food safety regulator has done away with process of product approvals in line with a recent Supreme Court order and now plans to reintroduce the procedure through regulations.

NEW DELHI: The food safety regulator has done away with process of product approvals in line with a recent Supreme Court order and now plans to reintroduce the procedure through regulations.

The move, however, has left the industry confused about pending applications and new product launches.

The Food safety Standards Authority of India (FSSAI) in a circular said, "It is no longer possible for FSSAI to continue with the process of product approvals, which was facilitated through the advisory dated 11 May 2013, in view of the order dated 19 August 2015 of the Supreme Court, whereby the judgement and the order dated 1 August of the Bombay High Court has gained finality and the said advisory has ceased to remain operative."

The court ruled that the process introduced through an advisory had no legal standing and asked FSSAI to get the government to change the regulations to enact the procedure.

In its circular FSSAI said, "Every endeavor will be made to expedite the regulations governing Section 22 products."

Products specified under Section 22 include food supplements, food for special dietary uses and functional foods.

While the move to quash the advisory was welcomed, industry association All India Food Processors Association (AIFPA) has raised concerns over lack of clarity on what will happen to pending applications and new product launches as it will take some time for the regulation to be put in place.

"The regulator is now trying to convert the advisory on food approval into regulations but this will take some time," said Amit Dhanuka, president of AIFPA.

"There is no clarity on what will happen till then. FSSAI did not clarify on new product launches or applications which are already in the pipeline. It may be the case that product launches may not be allowed at all until a fresh regulation comes in," he said.

Under the earlier regime, product approval was required only if there was a new ingredient or additive being introduced.

ET VIEW: Needed, Clarification by FSSAI The food regulator has been constrained by the Supreme Court to upgrade its advisory on food product approvals to a regulation. What are food companies supposed to do in the interim? Hold all new product launches? Launch products anyway? The regulator should clarify what food companies should do, on the applications already in the pipeline and will accumulate till new regulations are framed. Launching on trust would be a good idea, with the FSSAI cracking down on any product that it finds harmful, ex post, with heavy penalties that consumers can augment with class action suits.

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Focus: What impact will Maggi scare have on Nestle?

Dramatic scenes emerged from India today (5 June) as television cameras showed rowdy consumers burning Nestle's Maggi branded noodles in a bonfire. Nestle has witnessed the rapid deterioration of consumer trust in the country as a food safety scare that started in the state of Uttar Pradesh spread throughout India.

The Food Safety and Drug Administration (FDA) in Uttar Pradesh claimed high lead levels were found during "routine tests" in two dozen packets of instant noodles. The state authorities also said they found the flavouring MSG, which must be labelled if it is used in production.

State governments throughout the country then began carrying out tests of their own. According to the Food Safety and Standards Authority of India, a further two states have also confirmed the presence of lead and MSG in samples collected.

While Nestle has repeatedly insisted Maggi is safe – and apparently questioned the validity of the state's tests behind closed doors in discussions with the FSSAI – the immediate impact on Nestle's reputation in India has been startling.

"Detection of lead in a food product as a heavy metal contaminant beyond permissible levels renders the food product unsafe and hazardous," the FSSAI insisted today. The body required Nestle to pull all nine varieties of Maggi noodles from the shelves. In fact, Nestle had already initiated a voluntary recall. The company conceded consumer trust has been dented and said it is pulling products from the shelves until the "confusion" surrounding Maggi's safety can be clarified.

"The trust of our consumers and the safety of our products is our first priority. Unfortunately, recent developments and unfounded concerns about the product have led to an environment of confusion for the consumer, to such an extent that we have decided to withdraw the product off the shelves, despite the product being safe," the company said in a statement. "We promise that the trusted Maggi noodles will be back in the market as soon as the current situation is clarified."

Speaking during a press conference in India, CEO Paul Bulcke – who has flown in to try to contain the situation – reiterated his belief Maggi noodles are safe. The issue, he suggested, was one of communication – with both the authorities and consumers.

The fact Bulcke has swept in to contain the damage speaks to how seriously Nestle is taking the situation. He insisted Nestle remains committed to India, highlighting how the company has operated in the market for a considerable period of time. "Nestle has been in India for 100 years. Nestle is part of India," he told reporters.

Nestle said it was "too early" to comment on what impact the scandal and recall will have on sales in the market. According to MainFirst analyst Alain Oberhuber, Maggi sales comprise around 29% of Nestle sales in India. The loss of this revenue stream would represent a "significant hit" to Nestle in the country.

Kepler Cheuvreux analyst Jon Cox believes the issue could affect Nestle's total organic growth in the current quarter. "India is a small part of group sales... [but] India is a major growth driver (particularly given weakness elsewhere in BRICs and emerging markets) and we presume the issue could knock ten to 20 basis points from Nestle’s organic sales growth in Q2, which we already expected to be a somewhat soft quarter," he wrote in an investor note.

The issue could also prove detrimental to Nestle's broader strategy in the Indian market. According to Euromonitor International analyst Lianne van den Bos, India is an important country for Nestle's Maggi brand, representing its second-largest market with retail revenue of US$623m.

"Nestle’s strategy in India has been to provide affordable products that cater to a wide consumer base (including tier three and four cities). By building a strong image in an affordable product such as noodles, Nestle has been able to broaden the Maggi brand’s remit, and extend into products with higher margins such as cooking sauces and meal solutions for the more affluent consumers. This strategy has, however, been dependent on the trust that consumers have in Maggi and this is what is at risk," van den Bos noted.

Another risk factor for Nestle is the scandal could spill over into other international markets. Singapore has already moved to block the sale of noodles imported to the market from India while the UK has confirmed it is testing Maggi noodles for lead and MSG.

Nevertheless, commentators by and large believe the issue will be a short-term bump in the road for Nestle. Pundits have highlighted Nestle's strong food safety and compliance record, on the one hand, and the short memories of consumers, on the other.

As van den Bos summed up: "This scandal is very damaging for Nestle in the short run as it affects its whole business strategy in India. It should be pointed out, however, that Maggi has been around for a very long time in India and food scandals are frequent in the Indian market. It will not be long until another comes along and distracts consumers (and the media) from the Maggi food scandal of 2015."

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FSSAI directed to formulate guidelines on foods in school

Monday, March 23, 2015 08:00 IST 
Ashwani Maindola, New Delhi

Foods high in fat, salt and sugar such as chips, fried foods, and sugar sweetened beverages should be restricted in schools and nearby while the advertisement and promotion of such foods targeted at children is to be regulated says the Delhi High Court while disposing a petition asking for ban on Junk Food.
However, the term ‘junk food’ has not been defined under the FSS Act and the Rules and Regulations, the court also observed.

But the FSSAI in its submission accepted that  “junk food” is understood as food that is high in fat, sodium and / or sugar and lacking in micro-nutrients such as vitamins, minerals, amino acids and fiber; also such food is responsible for obesity, dental cavities, diabetes and heart disease.

Further the FSSAI, is also undertaking a project for development of Guidelines for making available quality and safe food in schools and had already initiated the process thereof, the court also observed, the submission said while adding that the Ministry of Health and Family Welfare has already requested the Chief Ministers of the States and Ministry of Human Resource Development for taking steps to ban / restrict availability / withdrawal of such food items from canteens of schools and educational institutions, says an affidavit filed by the FSSAI in Court while hearing on the subject.

On the guidelines on such food,The Court has directed that the guidelines be given a form of regulations or directions as per the Food Safety and Standards Act, 2006 within a period of three months to enforce their implementation across the country.The court said, “We therefore direct the FSSAI to within three months herefrom give the said Guidelines the form of Regulations or directions and to further take appropriate steps for ensuring enforcement thereof.”

Centre For Science and Environment -CSE says the judgement is significant, as it recognises the fact that this kind of food is bad for children. Further it could prove to be a milestone in combating diseases like obesity and diabetes among children in India.

 “We welcome the Delhi High Court order in the junk food case, in which it has directed strict implementation of the guidelines for making available wholesome, nutritious, safe and hygienic food to school children in India,” said Sunita Narain, director general, Centre for Science and Environment (CSE), responding to the judgement which came on March 16.

“We would have liked a complete ban on the sale of junk food in schools, but what the Court has ordered is also very significant: restriction is an important step in recognition of the fact that this kind of food is bad for children, and must not be allowed in schools,” Narain added.  

The Court order has come in a public interest litigation of 2010 on the availability of junk foods to school children. In its order, the Court has directed the Food Safety and Standards Authority of India (FSSAI) to implement the ‘Guidelines for making available wholesome, nutritious, safe and hygienic food to school children in India’. These guidelines were developed by a committee constituted by the FSSAI as directed by the Court.

The guidelines provide a scientific background on how consumption of junk foods high in fat, salt and sugar is linked with growing non-communicable diseases such as obesity, diabetes and hypertension among children. Some of the key principles behind these guidelines are ‘benefits of balanced, fresh and traditional food cannot be replaced, ‘schools are not the right places for promoting foods high in fat, salt and sugar’ and ‘children are not the best judge of their food choices’ says CSE.

Narain said: “The guidelines are scientific, comprehensive and well establish the harmful effects of junk foods. The essence throughout the document is to not allow the availability of such foods in schools. If well implemented maintaining the spirit of it, the guidelines will help avoid the looming health crisis in this country”.

She added: “The Court has emphasised on time-bound enforcement across the country and has put immense faith in the FSSAI. It could prove to be a milestone development towards addressing the growing burden of obesity, diabetes and heart disease -- among other non-communicable diseases -- in the Indian context.”

For schools in Delhi, the Court has asked the Administrator, Delhi to consider issuing directions under Rule 43 of the Delhi School Education Rules, 1973 to follow the guidelines and ensure their compliance. The Court has suggested not waiting for regulations or directions from the food authority and taking necessary action by the end of April 2015.

For schools outside Delhi and those affiliated to Central Board of Secondary Education (CBSE), the Court has directed CBSE to consider this issue, take a decision on it and if possible see if it can include abidance with the guidelines or similar directions as a condition for affiliation or continued affiliations of the schools with CBSE.

The guidelines recommends

• Most common junk foods that are high in fat, salt and sugar such as chips, fried foods, sugar sweetened carbonated beverages, sugar sweetened non-carbonated beverages, ready-to-eat noodles, pizzas, burgers, potato fries and confectionery items should be restricted in schools and 50 meters nearby.
• Advertisement and promotion of such foods targeted at children is to be regulated through a framework that includes all types of media, celebrity endorsements and promotional activities.
• A canteen policy should be implemented based on color coding. Green category foods -- the healthy food options -- should constitute about 80 per cent of available foods. Red category of select most common junk foods that are high in fat, salt and sugar should not be sold or served in schools. Suggested, healthy menu options should include fruit salad, fruits, paneer / vegetable cutlets, khandvi, poha, uthapam, upma, idlis and kathi rolls, low fat milk shakes with seasonal fruits and no added sugar, fresh fruit juice and smoothies with fruits, fresh lime soda, badam milk, lassi etc.
• The FSSAI should fix limits of unhealthy ingredients such as transfats to 5 per cent at the earliest.  
• Schools should promote nutrition education and awareness for children. A well-structured curriculum on balanced diet and its health impacts should be introduced.
• Labeling regulations must be strengthened by the FSSAI to enable complete and transparent information on the amount of fat, salt and sugar with reference to recommended daily allowed limits. 

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Government to flag off Rs 4000 crore investments with nod for 17 mega food parks

ET Bureau  |  11 March 2015, 7:56 AM IST

The government has sanctioned 42 mega food parks, of which 21 have already got the final approval and are in various stages of development.

NEW DELHI: The government plans to clear 17 mega food park projects in a month estimated to attract total investments of over Rs 4,000 crore.

"We are evaluating the proposals for allocations of food parks. Very soon we will announce about it," food processing minister Harsimrat Kaur Badal said on the sidelines of a food and hospitality fair on March 10.

The government has sanctioned 42 mega food parks, of which 21 have already got the final approval and are in various stages of development, while four have been awarded and are in the process of meeting the conditions for final approval.

Officials in the ministry of food processing industries said the government received 72 proposals from various companies, including ITC and Future Group, for the remaining 17 food parks. The final allocation could take place by March-end, they said. It is expected that on an average, each project will have around 30-35 food processing units with a collective investment of Rs 250 crore that would eventually lead to an annual turnover of about Rs 450-Rs 500 crore and a creation of direct and indirect employment to about 30,000 persons.

Badal earlier said establishment of more food processing units would reduce the huge food wastage estimated at over Rs 45,000 crore in the country. State governments are promoting diversification of crops, thereby moving farmers from wheat and paddy to dairy and horticulture.

The scheme of food parks aims at providing a mechanism to link agricultural production to the market by bringing together farmers, processors and retailers so as to ensure maximising value addition, minimising wastages, increasing farmers' income and creating employment opportunities, particularly in the rural sector.

Increasing land prices and delay in getting necessary clearances by state government have hampered the setting up of mega food park projects in the country, said government officials. For example, the Kolkata-based Keventer Group, Pristine Logistics & Infraprojects and JVL Mega Food Park, which had the requisite approval to set up in Bihar by November 2011, is still in the process, said officials.

The government provides financial assistance for mega food parks in the form of grant-in-aid at 50% of eligible project cost in general areas and at 75% of eligible project cost in the northeastern region, hilly states and integrated tribal development programme areas, subject to Rs 50 crore a project.

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Fruit juice segment is poised for 30% growth

Tuesday, February 24, 2015 08:00 IST 
Libin Chacko Kurian and Rashmi Nair, Mumbai


 With lifestyle diseases and conditions like hypertension and diabetes experiencing an exponential rise in the country, more and more Indians are opting for healthier options such as fruit juices, fruit-based drinks and nectars.

While, traditionally, the market of fruit juice has been dominated by the unorganised sector, and offerings belonging to the branded, organised sector have been very few, the latter has been showing consistent high growth both in terms of volume and market share for the last few years. 

Tax concessions
Not only that, government support in the form of tax concessions is buoying growth in the sector compared to other sub-segments of the beverage sector. For instance, concession in tax that is being given to fruit juices is not being given to other non-alcoholic beverages. This could be because these beverages are considered healthy.

While aerated beverage products are taxed at 20%, fruit juices are taxed at a concessional rate of 12.5%. This helps both the producers of fruits and consumers. While it creates better market for farmers growing fruits, consumers are getting nutritionally rich products for consumption. Tax concessions also mean more investments by both big players and regional small players. Thus the sector keeps experiencing consistent growth and in years to come may leave other key beverage sub-segments far behind in business expansion. 

Minuscule compared to West
Indian fruit juice segment is poised for 30% growth in next 5 years, according to a study published by International Research Journal of Commerce, Arts and Science titled Consumer Behaviour for Fruit Juice Market in India, published in 2013. The study reads “India produces about 9 million tonne of fruits every year, growing at a rate of 12% per annum. The total market for fruit juices is 230 million litre which includes both packed and freshly made fruit juices. The proportion of packed fruit juices is small at just 3.4 million litre just over 1% of market. But even this huge volume translates to just 20 ml per capital consumption as against 45 litre in Germany, 42.5 litre in Switzerland and 39 litre in USA.” 

Prashant Chaturvedi, director, Sunrise Agriland Development (a major exporter of fruit juices), explained, “Fruit juices are fast moving beverages due to convenience and nutritional peculiarities. A health-conscious population growing in both rural and urban parts of India, even when they look for convenience foods to escape long meals, they still go for better nutrition.

He added, “Beverages are the most convenient form of consumption, in which fruit juices are the nutritious and healthy choice for consumers. The medicinal advantage of fruits are the most important driving force in the beverage market. No other beverage can copy that natural nutraceutical specialty of fruits. Different fruits have different nutritional combination and can be used for specific nutrition. The market is expanding into different parts of the country.”

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Amit Burman's Lite Bite plans Indian cuisine restaurant chain in US

By Divya Sathyanarayanan | 02 January 2015, 7:55 AM IS

MUMBAI: Dabur scion Amit Burman's Lite Bite Foods plans to launch a premium dining brand American Tandoor.
The restaurant chain, which will serve Indian cuisine in an American way, will debut in June next year and the first outlet will be a 250 seater, spread over 5,500 square feet, in one of the biggest malls in Washington DC Tysons Corner Centre with an investment of around Rs 10 crore. Lite Bite Foods will invest over Rs 100 crore in the next two-three years through internal accruals to grow its existing portfolio of brands in India and overseas.

"It's a big-ticket investment for us and we plan to expand the brand in America as it has a lot of potential and their food consumption habit is incredible," Rohit Aggarwal, director of Lite Bite Foods, told ET. "If the concept does well, it's easy to open even 200 outlets there, as the market provides easy scalability."

Lite Bite already operates restaurant chains such as Punjab Grill, Bakers Street and Street Foods by Punjab Grill in India.

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Happy New Year - 2015