Shanghai expands blacklist to incorporate stricter penalties
The blacklist scheme, which was introduced in 2013 to include using false information and fake documents to obtain a license, using excessive food additives, and using non-food materials for food production, will now be broader in scope and adopt stricter penalties.
Under the new regulations, violators will face stricter inspections, heightened public exposure and tougher bureaucracy. This will be done by reducing access to credit and reducing the availability of land-use permits, according to the Shanghai Food and Drug Administration.
“In addition to expanding the blacklist, the authority will increase the frequency of spot checks and monitor consumer comments about restaurants on websites,” said Yan Zuqiang, director of Shanghai FDA.
“Poor performers will be inspected more frequently and thoroughly, while those who perform well will be used as role models for promotion.”
By the end of last year, Shanghai FDA released 16 blacklists to name and shame 31 companies and 65 individuals in the food and drug industries.
Shanghai officials said that they have been drafting new food safety regulations and welcomed public input.
“The draft of the new regulations is now accessible to the public on our website and WeChat account until April 20,” Yan said.
“The regulations, expected to take effect in May, will allow us to create an effective farm-to-table monitoring network.”
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Vitamin A prices set to continue upwards
After more than a year-long slump, China’s important vitamin A market is finally starting to rebound, with prices expected to continue to grow until the second-half 2016, according to market analyst CCM.
“The vitamin A price may keep increasing,” said Shi Xuejian, chief editor of Vitamin China News. “In fact, the rising price is mainly due to tight supply and price rises instigated by producers and dealers.
“Also, the booming downstream farming industry and the domination of production by a few giant players help the price keep rising in some way.”
Prices began to grow last December when Royal DSM, a giant global player in the vitamin industry, suspended vitamin A production to perform maintenance to a factory in Switzerland. This shut-down subsequently led to a reduction in the supply of the vitamin globally, with production stalled until February this year.
This reduced availability was exacerbated by the short supply of citral, a key intermediate of synthetic vitamin A. At the end of 2015, BASF’s citral factory in Malaysia, a leading supplier which accounts for more than 60% of global supply, failed to begin production as scheduled.
Taking advantage of DSM’s production suspension, successive vitamin A producers, including Zhejiang NHU, Zhejiang Medicine and BASF, have raised their prices.
“These measures pushed up the domestic market price of vitamin A, which has continued to rise,” said Shi, “And driven by profit, dealers also raised the price of the vitamin.”
“Currently, dealers are increasing their purchasing amount of vitamin A to stock up. They tend to sell the products at a very high price so as to gain huge profit,” said one sales manager from NHU who was not willing to reveal his name.
With large-scale live pig farming developing rapidly in China, demand from the feed industry is expected to steadily drive up demand for vitamin A.
At present, 70% of this demand comes from the downstream feed industry, though the cost of vitamin A only accounts for around 1% of feed production expenses, suggesting that increasing vitamin prices will have little effect on the cost of feed.
Vitamin A usually has a short shelf-life which does not allow for feed producers to preserve their stock for long periods of time. After China’s 2016 Spring Festival, the domestic feed industry has ushered in a peak period for stocking the vitamin, and as demand increases, its price is expected to continue its rise.
Until now, only three vitamin A companies have achieved large-scale production in China: NHU, Zhejiang Medicine and Kingdomway, with a total capacity that accounts for 40% of the global market share.
The remaining 60% is taken up by global giants DSM, BASF and Adisseo. Since the industry is highly concentrated and technologically demanding, it is easy for these enterprises to continue to push up the price of vitamin A, also aided by a stable supply structure due to a lack of new competition.
Nutricia withdraws Karicare from Chinese market
Danone Nutricia has stopped supplying its Karicare brand in China more than two years after the New-Zealand made infant formula was at the centre of a botulism contamination scare.
The French dairy manufacturer was forced to withdraw some Karicare lines in August 2013 after Fonterra, which supplied its milk powder, announced the possibility that it contained botulism-causing bacteria, though this was found to be a false alarm.
Danone is currently in arbitration with Fonterra in Singapore after it revealed the recall had cost it an estimated US$395m in lost sales.
According to a Reuters report, the company will now focus on developing Aptamil and Nutrilon, two other baby formula brands, in the Chinese market. Karicare will continue to be sold in Australia and New Zealand.
China reopens long-abandoned halal regulation debate
Beijing lawmakers are considering a new halal law 13 years after the country’s State Council ordered the legal provision, the council’s legal office has announced.
A divisive issue in China, halal food is currently governed by a mix of regional standards in an unsatisfactory system that hinders the country’s ability to export halal items in a burgeoning global Islamic market.
The concept of halal food is widely opposed by Han Chinese, though legislation to govern it centrally has been deemed “reasonable and necessary for national unity and stability”, according to the Ethnic Affairs Committee of the National People’s Congress.
Activists among the majority Han claim that atheist China should not make exceptions for a Muslim minority that comprises less than 2% of the population. A growing trend among Chinese companies to label non-halal food as halal in a bid to gain business has resulted in occasional mob action by Muslims.
A halal law also faces opposition from some Chinese intellectuals. Last month, Xi Wuyi, an Marxism expert at the Chinese Academy of Social Sciences, wrote on Weibo that halal legislation "violates the principal of separation of state and religion”.
Nestlé ramps up coffee research and training in Yunnan
In China, Nestle has opened a coffee centre as part of a university joint venture to research tropical crops in Yunnan province.
The 30,000 square-metre Nescafé Coffee Centre, in collaboration with the College of Tropical Crops at Yunnan Agricultural University, features a training laboratory that focuses on green coffee beans, and a quality control lab and warehousing.
“Nestlé is committed to developing coffee farming in Yunnan, and has reached remarkable achievements and created shared value by working with local government and farmers over the past three decades,” said John Cheung, Nestlé China’s chairman and chief executive.
“The NCC integrates training, technical support, lab and modern warehousing, and thus promotes the effort for win-win result to a higher level. It builds us a larger platform for cooperation, exchange and sharing with research institutions and the whole industry.”
The Yunan city of Puer, where the centre is located, has been central to China’s coffee industry for the past 30 years.
“The newly built NCC offers a new and larger cooperation platform for industry growth, and will promote the quality and efficiency of the value chain that covers farming to distribution, improve further industry integration, and promote Puer coffee’s competitiveness and its reputation on global market,” said Lu Han, director of Puer’s coffee office.
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