China urged to increase food safety in the supply chain
12th May 2009
Many Chinese food companies lag behind foreign firms in ensuring food safety, partly because consumers do not trust safety certification, said experts yesterday.
China has thousands of small-scale food manufacturers and many do not invest in food safety certification, said Huang Dejun, director of Beijing Orient Agribusiness Consultancy (BOABC).
Huang was speaking at a meeting of food and agribusiness leaders outside Beijing to promote quality in the global food chain.
Safe food
“The Chinese consumer is going to have to realize the value of safe food. Larger companies putting [food safety and quality] programmes in place are having difficulties convincing consumers to pay more for those products,” said Vincent Paez, director of food safety business development at Thermo Fisher Scientific.
Thad Simons, chief executive of animal nutrition firm Novus, pointed out that “there are companies in China following excellent processes”. But frequent faking of labels and certificates means Chinese consumers have no reason to believe this is the case. “The consumer doesn’t know who to trust right now.” Simons said retailers could play a role in building consumer trust in safe brands.
Also, the government needs to back intellectual property, said Brady Sidwell, head of advisory at Rabobank’s north-east Asia office. “Companies would be willing to invest in food safety if the consumer is prepared to pay more, which they will. But, if there’s no brand protection and the company can’t protect its premium, then there’s no incentive for them to invest,” he said.
Opportunities
Despite such issues, participants said interest in investing in China remains strong. Yangjun Lu, senior financial analyst at GIC, said foreign firms see “only the opportunities” in the Chinese market.
China has few nationwide food brands but market consolidation will force companies to pay greater attention to brand development and food safety, said Huang. The country’s food and agriculture sector could be worth $1.5 trillion but two-thirds of the market has not yet been explored, he added.
Small and medium-sized firms need more training on food safety, said Huang. “We hope we can learn from these foreign companies and draw on experience from abroad.”
Read the full article on Food Production Daily where this article originated.