By Yves Rey Senior Advisor, Danone Board of Directors & UNOPS; Executive Director, IFAAO
© tombaky | Thinkstock.com

The new economic world order involves a substantial shift from the system that is in place today. I now believe that we may be seeing a paradigm shift in the worldwide market. The past decades, from the years 1980 to 2015, were the era of:

  • Globalization: Trade knew no border.
  • Financialization: Leverage overrode capital equity.
  • Digitalization: Of everything that can be digitalized.

THE NEW ERA. All these trends have reshaped society and, inevitably, impacted economies, countries, and companies. But starting in 2016, the world entered a new era with:

  • Globalization: There is always a tendency toward globalization, but there is local political will to make the country strong again, with protectionism and potential trade barriers returning.
  • Financialization: Traditional industry and agricultural economies and the process of repatriation of manufacturing facilities in their countries of origin tend to slowly regain ground over financial markets and profit maximization.
  • Digitalization: Cross platforms and real-time data-sharing involve major changes in day-to-day operations, human resources, information resources, and technology.

All of these new trends are re-shaping society and, inevitably, are impacting economies, countries, and companies.

We know that to feed nine billion people by 2050, the global food system will need to double or even triple, and we can anticipate that no country will be self-sufficient in food. That means one sure thing about globalization: it’s here to stay, even though different possible scenarios can be envisioned. Forward-looking reflections about the food supply chain have shown that three trend scenarios could be anticipated:

  • Globalization of trade, leading with highly concentrated agro-food industries: one world, one global trade.
  • Widespread consumption of high-tech functional foods — phoods and medi-foods.
  • Strong shift in consumer preferences to food from alternative production system — small, fresh, local, organic, urban farming.

CONSUMER PROTECTION. How can we improve consumer protection in an era of globalization and globalization fears? The challenge of protecting consumers from unsafe and adulterated food calls for the development of new policies and ideas to anticipate and control food safety risks at the early stage of production: at source. We need to control food safety hazards at their source not at the border.

As stated by the World Health Organization (WHO), “Countries should implement international health regulations that seek to control food safety hazards at their source rather than at national borders, and expand their cooperation on surveillance, knowledge, system building, and training.”

Additionally, in a written statement, WHO’s Director-General Dr. Margaret Chan said, “Given today’s universal vulnerability of the food supply chain to food safety threats, better security calls for global solidarity.... International public health security is both a collective aspiration and a mutual responsibility. The new watchwords are diplomacy, cooperation, transparency, and preparedness.”

Trade liberalization is a factor that induced a change in policy and development strategy. Agro-food value chains have become more complex and fragmented than in the past and more difficult to manage. Many food supply chains span across countries or regions and involve a variety of different operators. Moreover, food safety scandals have increased awareness among consumers.

MUTUAL RECOGNITION. Mutual recognition agreements in international food trade could play an instrumental role in executing the decisive step in product integrity and, ultimately, consumer protection. It could enable public health officials, of whatever the country from which the product is delivered, to seek to control food safety outbreaks at their source, rather than focusing on border control at airports and seaports to avert importation of food safety hazards.

Harmonization of food regulations and control systems around the world have several benefits. They provide, among others:

  • Anticipation.
  • Assurance of an adequate level of protection for the consumer.
  • Facilitation of trade.
  • Reduction of waste due to product non-conformity.
  • Elimination of delays at point of entry and risks of running out of stock.
  • Reduction of the cost of the agro-food chain.
  • Reduced dependence on routine checking at point of import.
  • The establishment of a consultative mechanism between the two parties for rapid resolution of problems in conformity assessment and related issues.

FOOD INDUSTRY RESPONSIBILITY. The foremost responsibility for ensuring quality and safety of food lies with the industry. For agro-food businesses, the harmonization of standards is an important objective for several reasons. A multitude of food safety and quality standards, codes of good practice, guidance documents, and food safety management systems have been developed over the last 10 to 15 years in response to specific needs of certain industries.

Private standards and management systems developed by non-governmental organizations were based on international standards and frameworks, such as the internationally recognized Codex Alimentarius, HACCP, and ISO standards. The main private standards include the Food Safety System Certification 22000 (FSSC 22000), the Safe Quality Food Code (SQF), the British Retail Consortium Global Standards for Food (BRC), and the International Featured Standards for Food (IFS). All of these are certification programs of the Global Food Safety Initiative (GFSI), which is an example of a recognition and benchmarking program initiated by food safety experts working for retailing, manufacturing, and food service companies, as well as service providers associated with the food supply chain. GFSI aims to build a global approach to food safety issues by benchmarking and recognizing food safety standards.

The food industry is responsible for producing safe food; government agencies are responsible for setting food safety standards, conducting inspections, ensuring that standards are met, and maintaining a strong enforcement program to deal with those who do not comply with standards. But the laws, regulation, and legislation among the many nations participating in the global food trade are, unfortunately, too often inconsistent.

An important step toward the harmonization of global food standards has been taken with the development of Codex Alimentarius and the agreement on the application of sanitary and phytosanitary measures as developed by WHO. Obviously, such harmonization of public standards would make trade more efficient, as exporters would be able to comply with internationally accepted standards instead of complying with different standards for each target market.

Another new standard that is gradually gaining awareness is that of IFAAO, the International Food Authenticity Assurance Organization (IFAAO), of which I am the executive director. The nonprofit organization is working to address the growing challenge of determining the authenticity of food ingredients to provide global benefits, including those of enhancing sustainability, nutrition, and public health; reducing food waste; and preventing economic adulteration — as well as to ensure that consumers are purchasing exactly what they expect and what is declared on the packaging. (For more information, see About IFAAO.)

THE ROLE OF GOVERNMENT. National legal frameworks are a key pillar in an effective food control system. In all countries, food is governed by a complexity of laws and regulations which set out the government’s requirements to be met by food chain operators to ensure the food is safe and of adequate quality. However, a country-by-country look at regulations and best practices shows many inconsistencies, non-equivalences, and even incoherencies.

By seeking equivalence and transparency from a country’s government, the goal is to reduce the toll, both in human sickness and death, as well as in the economic impact that risks or rumors can have on a country.

Based on a survey carried out by IFC, the best practices that every country’s government should implement are:

  1. A single inspection agency for the greatest effectiveness in delivering transparent, consistent inspections based on food safety and consumer protection.
  2. Continuous training of all inspectors in accordance with clearly defined regulations to ensure risk-based inspections at all times.
  3. A central register of food business operators to promote transparency.
  4. Certification issued by authorities in accordance with WHO requirements and internationally accepted practices, such as those of GFSI.
  5. Sampling of imported and domestic goods performed according to regulations with defined risk-analysis principles, including non-conformities observed in documentation; previous violations or concerns with the same importer/producer; or notification on food safety risks associated with a certain product placed through the international Rapid Alert System or some other regional system.

But there is still a long way to go to get such best practices implemented. Gaps exist in international public health security because of inadequate food safety policy and investment in public health defenses. Moreover, many governments are unwilling to report outbreaks because of the potential damage to their economies through disruptions in trade, travel, and tourism.

China’s new infant formula milk powder registration rules provide a visa “to market a product in China.”
© Achy0701 | Dreamstime.com

HEADED IN THE RIGHT DIRECTION. Some of the public and private initiatives and actions that demonstrate that we are heading in the right direction to control product at source are those of the U.S. and of China.

In the U.S.:

  • Although still incomplete, one of the first steps toward certification and controls at source before exportation to the U.S. is being specified by FDA.
  • The Food Safety Modernization Act (FSMA) rule on Foreign Supplier Verification Programs (FSVP) for Importers of Food for Humans and Animals requires that importers perform certain risk-based activities to verify that food imported into the U.S. has been produced in a manner that meets applicable U.S. safety standards.
  • The program also specifies the education, training, and experience needed to be a qualified auditor to perform the activities to meet the requirements of the program.

In China:

  • China HACCP is the national certification scheme implemented by the Certification and Accreditation Administration of China (CNCA).
  • Being certified with China HACCP is an excellent statement of a foreign food producer’s willingness to ensure its products are complying with the Chinese import regulations and standards.
  • This also represents an important referential material for Chinese authorities both at the national and local level, including the CNCA registration for overseas high-risk food producers, and the compulsory China Inspection and Quarantine (CIQ) at the entry borders.
  • Last but not the least, the China HACCP quality mark is widely promoted by CNCA and gives positive exposure of products in the Chinese market.

For the very first time a food regulation agency has defined food standards — not only the maximum level of contaminants that a food product could contain, but also the food safety management system that a manufacturing facility should implement, i.e., HACCP; the general requirements for a food processing plant; and the general hygiene regulation for food enterprises standard.

The advantages of China HACCP certification are that it:

  • Increases company and product brand awareness in the Chinese market.
  • Significantly facilitates the CNCA registration process for dairy, infant formula, aquatic product, and meat product producers.
  • Accelerates the CIQ clearance at the Chinese border.
  • Provides access to unique promotion opportunities in China.

Moreover, the China HACCP scheme has been assessed and recognized as technically equivalent to the already benchmarked GFSI recognized schemes. This is because, in addition to the benchmarking and recognition of private schemes, GFSI has introduced a new category: Technical Equivalence, which is dedicated to government-owned schemes.

INFANT FORMULA REGISTRATION. China’s new infant formula milk powder registration rules provide a visa “to market a product in China.”

The CFDA Administrative Measures for Registration of Recipes for infant formula products (CFDA June 6, 2016) increase the entry barriers to the infant formula milk powder industry, creating a registration threshold which tightens production requirements. The new rules restrict the number of formulas, limiting a single company to applying for no more than nine formula products within three series. The new rules subject infant formula products to formula registration administration, whether produced in or imported into China.

To apply for registration, an infant formula milk powder production enterprise must have appropriate capabilities in research and development, production, and inspection; satisfy the powdered infant formula foods’ GMP requirements; have implemented HACCP; manufacture the products in accordance with relevant laws; carry out batch testing of products produced in accordance with relevant legal provisions and infant formula milk powder food safety standards.

In product labeling and specification, the applicant is required to submit the application with samples of the label and instructions, along with proofs for the label description and instruction, and provide detailed provision of the statements made in the labels and instructions.

This new regulation is a good example of the reinforcement of upstream control measures and certification to anticipate and accelerate the clearance at the border. Step by step, we are making very slow progress in the process of control and certification at source.