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From: Food Quality & Safety magazine, October/November 2011

India Moves to Tighten Food Labeling Laws

With growing consumer sophistication and demand comes the need for more and better information

by Jabir Ali, PhD

The growing market for packaged food provides both opportunities and challenges to food processors, importers, food packagers, and labelers to respond to consumers’ requirements. Innovations in food product development, packaging, and labeling are becoming key factors for survival across the world. Therefore, product packaging and labeling have numerous important roles to play in the emerging market environment.

Some consider food labeling a tool to promote and protect public health by providing accurate nutritional information so that consumers can make informed dietary choices, while others see it as an instrument of marketing and product promotion. Several studies indicate that the label can reduce the information problem between producers and consumers, while also reducing search costs for consumers.

It is argued that a food product constitutes a bundle of attributes (i.e., search, experience, and credence) that serve as critical indicators for analyzing food quality and safety:

• Search attributes are those for which consumer can obtain full information about the product prior to purchase (color, size, shape);
• Experience attributes are those product characteristics that can only be determined after consumption (taste, flavor); and
• Credence attributes are product characteristics that can be known only after a long lag; some credence attributes are hazards that cannot be determined with certainty (nutrition, pesticide residues, calorie).

It is quite evident that most of the quality properties of food products are credence characteristics, with effects that cannot be inferred before, or sometimes even after, consumption; these necessitate mandatory food safety regulations to alleviate risks and hazards. Available literature suggests that one of the most practical methods for addressing credence problems is proper food labeling coupled with an effective institutional arrangement for implementation and certification of food safety processes.

Regulation

The disclosure of information on food labels in India is primarily governed by the Prevention of Food Adulteration Act of 1954, which focuses mainly on basic product information with less emphasis on health and nutritional information. However, recent amendments regarding packaging and labeling of food under part VII of the Prevention of Food Adulteration Rules of 1955 mandate the disclosure of health and nutritional claims on food labels along with basic information. The recently integrated Food Safety and Standards Act (FSSA) of 2006 also aims at establishing a single reference point for all matters relating to food safety across the country, by moving from multilevel, multidepartmental control to a single line of command.

Chapter IV, paragraph 23 of the FSSA clearly states that no person shall manufacture, distribute, sell, or expose for sale, nor dispatch or deliver to any agent or broker for the purpose of sale, any packaged food product that is not marked and labeled in the manner specified by regulation. The Food Safety and Standards Authority of India was established to speed up the implementation of various rules and regulations in the act.

Standards for Imported Products

Despite being a leading producer of many agricultural products, including milk, India accounts for only about 1.5% of the global processed food trade. And, although India is a net exporter of agricultural products, the demand for imported food products in the country has been increasing much faster than the growth in exports. With increasing income levels and changing consumer lifestyles, the demand for imported processed and packaged food products continues to grow.

According to a recent India Agribusiness Report by Business Monitor International, India is among the world's largest and fastest-growing markets for milk and milk products, growing at nearly 7.5% annually. The demand for value-added dairy products is increasing at a double-digit rate. It is important to note that demand is growing slightly faster than supply; serious issues with respect to self-sufficiency in the near future could further spur the import of milk products.

Section 3A of the Livestock Importation Act of 1898 confers on the central government the power to restrict the import into India of all livestock products without sanitary import permits. The sanitary import permit shall be issued by the joint secretary of the Trade Division of the Ministry of Agriculture’s Department of Animal Husbandry, Dairying, and Fisheries only if, after a detailed import risk analysis, the concerned authorities are satisfied that the import will not adversely affect the health of the animal and human populations of the country. Additionally, all livestock products must be imported into India through the seaports or airports where Animal Quarantine and Certification Services Stations are located, at Delhi, Mumbai, Kolkata, and Chennai.

As per the notification of the director general of foreign trade (DGFT), all packaged products are subject to compliance with all the provisions of the Standards of Weights and Measures (Packaged Commodities) Rules of 1977, when imported into India. The labeling requirements are applicable only to imports of those pre-packaged commodities intended for retail sale; imported raw materials, components, bulk imports, and other products that will invariably undergo further processing or assembly before they are sold to consumers, are not subject to the labeling requirements.

Labels and Consumers

Because almost all food products have embedded credence attributes, it is difficult for consumers to evaluate the quality of food products themselves by looking at the food labels. In general, consumers do not understand the complex and technical information regarding health and nutrition that is given on such labels. However, this information definitely increases consumer confidence about food quality and safety.

Standardization and uniformity of information on food labels might help consumers understand the information. But it will not be possible for consumers to assess quality and safety if a food product has been wrongly labeled. Because claims on food labels create expectations among consumers regarding the healthfulness of products, these claims need to be scientifically confirmed and enforced through proper regulatory mechanisms.

Future Action

India has sufficient rules and regulations for mandating the production and supply of safe and quality food products in the market. However, operational and institutional mechanisms for enhancing the efficiency and effectiveness of this legislation require urgent attention. In most cases, imported packaged food products carry ingredient details in foreign languages and lack uniformity in labeling information.

A recent report on food labeling in the U.S. indicates that food import refusals due to labeling violations were caused by lack of required nutrition information (25%); failure to list the common or usual name of each ingredient (18%); failure to accurately state the product’s weight, measure, or numerical count (13%); and failure to provide the label in English (12%) as required by the U.S. Food and Drug Administration.

We may learn from a recent initiative of the Indonesian government, in which the National Agency for Drug and Food Control mandated the use of the Indonesian language on the labels of all packaged food products imported for retail purposes. Similarly, food labeling rules in China also mandate that packaged foods for retail sale must have their fundamental elements printed in a Chinese language.

Dr. Jabir Ali is assistant professor at the Centre for Food and Agribusiness Management at the Indian Institute of Management in Uttar Pradesh (www.iiml.ac.in). Contact him at jabirali@iiml.ac.in.

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