China’s new Food Safety Law took effect on October 1, 2015, and will have a far-reaching impact on importers, producers and sellers of food. The new law significantly expands the scope of the previous Food Safety Law, which dates from 2009.
With respect to the new Food Safety Law, Mr. Zhang Yong, head of the food and drug administration, said the following when briefing the lawmakers at the bi-monthly session of the Standing Committee of the National People's Congress (NPC):
“The current law has helped improve food safety, but the situation remains severe. Through the law amendment, the country expects to impose the harshest civil, administrative and criminal penalties on offenders and toughest punishment on supervisors who neglect their duties.”
There follows a summary of some of the key changes.
Tighter rules on online purchases
Online food sales have been increasing rapidly in China, but they have not been specifically regulated. The new law adopts several significant new provisions regulating online food sales. Third-party online vendors of food must register the real names of the food distributors which sell products on their platforms, and have the duty to inspect their licenses. If an online vendor fails to do so, it may be subject to compensation claims by consumers.
Special foods specially regulated
The new law adopts specific rules for “special foods”, such as health foods, baby formula, and genetically modified (GMO) foods.
Health foods are now categorized as either requiring registration or reporting to the China Food and Drug Administration, depending on the product’s ingredients and whether it has previously been imported into China. The labeling and advertising of health foods must clearly state that the product “cannot be a substitute for medicine”.
The new law requires that GMO labels must be placed on GMO foods in a prominent position. A manufacturer or distributor of GMO foods who fails to do so will be subject to administrative penalties such as the confiscation of illegal income and products, fines, suspension of business, and the revocation of licenses.
Tougher penalties for safety violators
The new law also addresses the conduct of food industry employees. Previously, it was unclear whether the legal representative or the person in charge of a business which has its food license revoked would be banned from the industry. The new law makes it clear that both the legal representative and the person directly in charge of a food business which has had its license revoked will be subject to a five-year disqualification from both managing a food business, and from acting as a food safety manager.
Increased Punitive Damages
Under the old Food Safety Law, consumers could claim punitive damages of up to 10 times the product or service price, or twice the total loss if the product resulted in death or severe damage to health. Under the new law, consumers can claim compensation from food manufacturers and distributers of up to three times the loss incurred. Food imports will immediately be subject to recall.
China’s new Food Safety Law is the latest step in the tighter and more effective regulation of the country’s food sector. The government’s clear aim is to prevent food scandals such as those which in past years have hit milk, meat and other products. Importers, producers, distributors and vendors of food face an increasingly tight regulatory environment in which the slightest non-compliance can draw the attention not only of the regulators, but also of the media.
Dorsey & Whitney has significant experience in the food sector in China and would be delighted to assist. Please contact our Shanghai managing partner, Peter Corne, on corne.peter dorsey.com or by telephone on +86 21 6135 6188.