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How institutional reform will impact the ingredient space

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Changes to the Food Supervision Department in China will have an effect on enterprises doing business in China and sourcing ingredients.

On March 17, the first session of the 13th National People's Congress in China voted to adopt a decision on the institutional reform plan of the State Council. Several new and revised ministries will impact the nutrition industry.

National Health Commission

The first affecting the health space is the establishment of the National Health Commission. Compared with the National Health and Family Planning Commission before the reform, the newly formed National Health Commission has taken on some responsibilities of the Ministry of Industry and Information Technology and the State Administration of production Safety Supervision and Administration.

Forming the National Health Commission highlights government emphasis on promoting national health. This commission will focus on the development of “big health” and “great health,” formulating a national health policy and advocating the integration of the nutrition industry, which will be beneficial to the promotion of health. It also maintains some original functions, including promoting improvement of  existing nutrition law and standard system, improving the nutrition work system, and rapidly developing the food nutrition and health industry.

The new department is also charged with strengthening the monitoring of food safety risks. Enterprises should control food safety from the source, and strengthen daily inspection capabilities and monitoring. They should ensure products meet the requirements of national standards or public standards to ensure the compliance of products when entering and exiting the factory.

Ministry of Agriculture and Rural Affairs

The establishment of the Ministry of Agriculture and Rural Affairs, previously known as the Ministry of Agriculture, reflects more of the functions of rural social and economic governance by government sectors.

Although the responsibilities of the Ministry of Agriculture and Rural Affairs will not change related to management, examination and approval of contents related to food safety, it may further strengthen law enforcement of agricultural product quality and safety and the standardization of agricultural production and business practices in the future.

Agricultural production enterprises should not only pay attention to the environmental pollution caused by agricultural production, such as the irrational application and improper treatment of pesticides and fertilizers, but also to the standardization of the production process, which should be strictly in accordance with relevant standards so that the quality of agricultural products can meet the standard.

State Administration of Market Regulation

In this reform, the responsibilities of the State Administration for Industry and Commerce (SAIC), the State Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), the China Food and Drug Administration (CFDA), the duties of price supervision and inspection and anti-monopoly enforcement of the State Development and Reform Commission, the duties of undertaking centralized anti-monopoly law enforcement of the Ministry of Commerce, the duties of Office of the State Council Anti-monopoly Commission and so on, are integrated to set up the State Administration for Market Regulation as a subordinate directly affiliated to the State Council.

Although this institutional reform has integrated the functions of food supervision and management into the State Administration for Market Regulation, some institutional responsibilities are unclear, and frequent changes in relevant laws and regulations during the course of reform will further increase the compliance risk faced by food enterprises. Therefore, in the process of this institutional reform, enterprises should pay more attention to the issue of product compliance, strengthen self-inspection, strictly monitor the quality of products and ensure food safety.

Under the premise of further clarified responsibility of market supervision and ensuring product safety and quality, enterprises will face higher risks and pressures in product packaging, storage, transportation, advertising, market circulation, etc.

General Administration of Customs

The integration should be able to significantly reduce the process of inspection and declaration, as well as the cost of manpower and material resources, simplify the process of handling documents, and promote the unification, flow and standardization of customs orders. After the combination of food entry and exit inspection, quarantine and customs, the professional knowledge of both sides will be integrated, and they will be better at managing goods classification, epidemic prevention, laws and regulations, etc. At the same time, inspection will be more stringent, and gray areas may disappear.

Learn more about the Chinese market, and connect with ingredient buyers and suppliers at SupplySide China, at Area B, China Import and Export Fair Complex on June 28 to 30, 2018 in Guangzhou, China.

Lillian Fan is a food regulation expert from Antion who has worked in the nutrition, health and food regulatory business for many years.

TAGS: Regulatory
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