International Approaches to Food Safety in China

Exporters and importers from around the world have gathered at the 2011 Northeast Asia Expo in northeast China's Chang Chun city. Among them are food importers hoping to extend their market share here in China.

CRI's David Dawson takes the chance to examine how different companies are tackling the controversial issue of food safety as they develop new strategies, using everything from lab testing, to supply chain modifications 1 and advanced technologies.

 

Food safety is an issue that's been on everybody's mind lately - particularly those who depend on it for their business.

"We want to be perfect, we want to be excellent, but every day we need to fight."

That's Jean Luc Lhuillier, Carrefour Vice 3 President and General Manager for the Northeast region of China. The French company has carved out a significant slice of the Chinese market.

Like all retail 4 food chains in China, Carrefour faces food safety challenges. Recent food contamination scares have made Chinese consumers warier 5 than ever when it comes to what is on their dinner plates.

Carrefour's food safety strategy is ambitious. China's food production industry differs from most western nations as the bulk of food products are provided by smaller farms. This makes it tough for retailers 6 and inspection 7 agencies to ensure food quality, as the supply chains are more fragmented.

Retailers are faced with a choice - they can try to control the supply chain or they can work with local producers. Carrefour has opted 8 to work with the locals and reduce the potential for contamination in other ways.

"I think the first thing is to train the farmer, to train them about what is hygiene 9, how to improve hygiene, how to decrease the pesticide 10."

Lhuillier says Carrefour trains the farmers who provide their wholesale 11 goods. It represents an impressive undertaking 12, as there are around 800,000 Chinese people employed with suppliers on the production side of their business. They've also eliminated the middle-men, who may be tempted 13 to cut corners, and have established their own laboratory in order to test supplies regularly.

Even if companies control production, they still must deal with counterfeit 14 products. These pose two potential risks for importers – fake products can eat into their market share or worse, they may cause health scares.

"As soon as you get any market penetration 15, then the fakes start coming along."

That's the General Manager of Golden Seal. The New Zealand company imports luxury foods, among other things. Golden Seal is protective of its brand and plans to use a novel new technology that's still in development and won't have a significant market presence for at least another year. It's called 'Near Field Communication' or 'NFC' and utilizes 16 mobile phones.

"Basically our products, especially our honey which is our company's own brand, will have an NFC chip embedded 17 in it, and if a customer scans it with a phone, because it has a unique identifier, they'll be able to know that this is an authentic 18 product."

Chinese Fortune 500 company COFCO is also developing new strategies to deal with food safety. COFCO senior executive Wan 2 Zaotian says the company is instituting new procedures which would allow them to specifically identify where in their supply chains problems might exist. He says the company recently launched these procedures in their meat and wine supply chains, and he's confident COFCO's food safety measures will protect consumers.

It remains 19 to be seen which companies will have the most successful food safety strategies into the future, but one thing is certain - food safety will be on the minds of Chinese consumers for quite some time, and the companies that effectively deal with it will have an edge in the marketplace.

For CRI, I'm David Dawson.