Preparing for the food safety crackdown

The PRC Food Safety Law (中华人民共和国食品安全法) first came into force on June 1 2009, replacing the PRC Food Hygiene Law that had been regulating the food industry for nearly 26 years. After the 2008 milk scandal caused serious questioning of domestic supervision over food safety both in and out of the country, the imminent enactment of the Food Safety Law was much anticipated.

However, as it was so urgently called for by the scandal, the Law has also been criticised for being drafted hastily and roughly. The corresponding punishments for illegal conduct were too mild to carry deterrent value and therefore it failed to effectively regulate the food industry.

In addition, the institutional reform that was obviously critical for the improvement of administration was not simultaneously carried out with the enactment of the Law. Enhancing the supervision of food safety has been further emphasised since the 18th CPC National Congress convened in 2012, where the requirement of building the “strictest food and drug safety supervision system” was announced. One of major steps taken was to reform the administration system and to establish the China Drug and Food Administration (CDFA). Prior to the transform, the authorities other than the State Food and Drug Administration (SFDA, predecessor body of the CDFA) involved in the process included the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), which regulated the production process, and the State Administration for Industry and Commerce (SAIC), which oversaw distribution. The CDFA began supervising food safety in all processes after it was officially founded.

The dairy products pollution incident in 2008 raised public awareness concerning food safety in China and also triggered legal reform. Nevertheless, there remains little optimism regarding the situation of food safety. The first amendment to the Food Safety Law was released after five years since it came into force and will become effective on October 1 2015.

Close watch on the food industry

Institutional reform

The institutional reform was initiated by the State Council in March 2013 and it is now explicitly stipulated through legislation. The reform being reflected in the 2015 Food Safety Law (2015 Law) marks the end of the formerly adopted regime that divided and designated supervision functions to different authorities based on stages of the food industry. This arrangement caused uncertainty of responsibilities and buck-passing among departments. The new law integrates functions and provides a more concentrated and efficient supervisory regime.

Traceability & self-inspection systems

The new law establishes a whole-process food safety traceability system. Food traceability systems have been widely utilised in western countries, typically in France and the US, especially after the outbreak of mad cow disease. In China, the system has been used by high-end brands as a way of propaganda or brand marketing. However, the 2015 Law aims to greatly enlarge the scope of application and build a system that covers the entire domestic food industry by imposing the requirements on all “food producers and traders”.

It also requires food producers and traders to establish a food safety self-inspection system. As a newly introduced system, it demands that the inspection and assessment of environments must be conducted by producers and traders on a regular basis. The self-inspection requirement is further emphasised in the special foods industry. The 2015 Law especially stipulates that enterprises producing “special foods” must establish a production quality management system adapted to their processes and conduct self-inspections on their operating conditions. Further, a self-inspection report must be submitted to the local authorities.

Widened applicability

The regulation of food additives is notably improved under the 2015 Law, which prohibits the producing of and trading in food additives which do not meet certain standards. The application scope of the inspection recording system for outgoing production has also been extended to include food additives. The operation standards of the recording system for food additives are now level with those for foods.

The new rules also introduce supervision over food production and processing workshops and food vendors. Compared with the traditional method of focusing on large-scale enterprises, regulating petty dealers is equally demanded considering the conditions of the local food market. Given the significant role these workshops and vendors play in people's daily lives, this regulation is urgently needed. In addition, supervision over the disinfection of tableware and kitchenware in canteen and service entities has also been included in the amendment to improve the hygiene conditions of concentrated dining.

Despite the massive development of online shopping in China, the corresponding regulation for food is relatively behind. Supervision over providers of third-party platforms for online food trading has been added in the amendment. Such platform providers, like Taobao, are required to conduct real name registration for online food traders and to review their licenses (if applicable). Further, platform providers must report to the authorities or stop providing services to food traders if any illegal activities are discovered.

Special foods

One of the most notable changes of the Law is the addition of Section 4 in the fourth chapter, which covers “special foods”, which are defined as “health foods, formula foods for special medical use, infant formula foods and other special foods”. The producing and trading process of these will be strictly supervised and administrated.

Heath foods are required to be registered with the CDFA or filed with its provincial branches, depending on the raw materials the food uses. Formula foods for special medical use and infant formula foods are also subject to registration with the CDFA and filling with its provincial branches, respectively.

Since infants have lower resistance and more limited choices of food, supervision over infant foods is likely to be extra strict. The 2015 Law introduces quality control of the highest standard to regulate infant formula products and requires enterprises to implement quality control during the entire production process of infant formula foods, as well as conduct inspections on the processed food “batch by batch”. With many infant formula/milk powder producers now importing milk powder in bulk and selling it in smaller packages, the risk of pollution has significantly increased. The 2015 Law prohibits this method so as to reduce contamination. More importantly, it encourages domestic enterprises to enhance research and development abilities, according to a CDFA officer. These measures are all aimed at ensuring the quality of infant foods, as well as to rebuild public confidence in the local industry.

In addition, a manufacturer is no longer allowed to produce different milk powder brands by using the same formula.

Provisions of the PRC Advertising Law are also specifically integrated in this section to curb over-exaggerated or false advertising of special foods. As for health foods, besides the explicit stipulation that labels must state that “the product cannot replace medicine”, businesses also need to obtain approval documents from the provincial government regarding their advertisement.

Liability and punishments

The amended Food Safety Law imposes harsher punishments. Other than increasing all original standards of penalties by two to 10 times, it also introduces enhanced punishment systems.

The “first-asking response system” aims to make it convenient for customers to claim compensation by requiring producers and traders to reimburse the customers when asked, regardless of whose responsibility it is. When the producer/trader with no liability has paid for the compensation, it is entitled to recover the loss from the liable producer/trader. This system was established in the PRC Law on the Protection of the Rights and Interests of Consumers (中华人民共和国消费者权益保护法) (Consumer Protection Law) and PRC Product Quality Law (中华人民共和国产品质量法), and has been introduced in the Food Safety Law for the first time.

The system has been expanded to regulate e-commerce. When consumers make a claim for compensation while using a third-party platform for online shopping, platform providers who fail to provide the true name, address and valid contact information of food traders are required to pay the full refund in advance. This gives customers the chance to make claims to the more suitable targets in nearer locations and with greater ability to pay punitive damage – an uncommon concept in the Chinese legal system that has been introduced in the 2015 Law. Compared with similar regulations regarding punitive damage, such as in the PRC Tort Liability Law (中华人民共和国侵权责任法)(where the concept is brought up without any stipulation of the standard of punitive damage) and in the PRC Contract Law (中华人民共和国合同法) and Consumer Protection Law (where the standards are set as “less than two times the losses”), the “ten times the purchase price” requirement set in the original Food Safety Law is already relatively strict. However, considering the low price of food, the total amount of damages would still not be high enough to serve a deterrent purpose. The amendment alters the standard of punitive damage to “ten times the purchase price or three times the losses”. It also fixes a minimum amount of punitive damage at Rmb1,000.

The “lifetime ban” system has also been introduced in order to ensure the exclusion of anyone who has been sentenced to a fixed-term imprisonment or above for food safety crimes from food production and trading management, as well as the exclusion of any staff of food inspection agencies who have violated their duties or regulations.

Waiting for more

The first Food Safety Law amendment overall improves supervision over food safety, which is urgently called for by the local people. With its expanded regulatory scope, the Law has been updated to keep up with the development of the food industry. The stricter rules provide a stronger deterrent against violation.

But some newly-added regulations require further details. For instance, the aim of building a “traceability system for the entire process of food production” still needs clarification, such as the target of the objective and the specific requirements and standards of the system. These goals need to be defined in order to avoid ending up as mere slogans.

Overseeing food production, processing workshops and food vendors will be very difficult due to their high mobility. The corresponding punishments for violations are expected to be enacted by the local governments.


Xudong Ni, East & Concord Partners, Shanghai

Beibei Bao, an intern at the firm, assisted in writing this article