As 13,000 pig carcasses floated down the Huangpu river last week, the issue of China’s poor food safety standards once again became front page news. Citizens were outraged, but despite the shocking images, there was little mention of just how much food safety in China has started to improve in recent times
There is now a far greater awareness of food control issues amongst the general populace, partly engendered by social media, and this has created more pressure for change than ever before. This is primarily being driven by the new middle class, who find themselves with more money to spend and more of a voice to ensure that what they feed their families is reliable, trustworthy and true to the claims made on the packet. Recognizing the potentially combustible nature of this issue, incoming President Xi Jinping has indicated that he will tackle issues of food safety as part of a general drive to improve the wellbeing of Chinese citizens
Long gone are the days of the Sanlu milk scandal of 2008, when government authorities tried to supress information about the tainting of dairy products from the public. They massively underestimated the potential of the internet to disseminate information easily and quickly. Now, stories of poor water quality, poisoned foods or dangerous drugs are picked up and published on the web before the government has a chance to react. A market has even grown up around it; a popular food safety app available in Chinese lists scandals by date, location and severity. Now, the people control the information flow. A warning that Coca-Cola’s ‘Minute Maid Pulpy Orange Juice’ contained an agricultural fungicide called carbendazim was forwarded over 77,000 times on Sina Weibo within just 15 hours.
This increased knowledge has some serious implications for food companies in China. As the middle class grows larger and wealthier, people start thinking not about what they can afford to eat, but what they want to eat. Unlike China’s pollution problem, where most people have no choice but to suffer the poor air, consumers in China can choose not to buy a suspected product. One can see the effect of this on the profits of companies like KFC and Shuanghui Group, who suffered huge drops in profit as a result of doubts regarding the safety of their food and supply chains. KFC sales in China not only dropped by 6% following the scandal, but the western fast food industry as a whole also suffered. In order to rebuild brand confidence, KFC owners Yum Brands Inc. announced their intention to improve control on poultry suppliers, increase public communication and remove over 1,000 sub-standard chicken houses from their supply chain. Although sales in China are still suffering, the company initially predicted that sales could drop by up to 25%/.This may indicate that KFC’s attempt damage control was at least partially successful.
On the other hand, if a company can maintain their customers trust, then this represents an opportunity for growth. The organic market in China, although still in its nascent stages, has found a growing market among high and middle income consumers.
The combination of increased spending power and consciousness, along with a fear of losing face, has undoubtedly led to food safety becoming a top priority for the government. Bureaucracy in China has always struggled to manage the food chain in China, and not without reason. 80% of Chinese food producers and processors are still small and medium sized enterprises, making effective enforcement problematic, if not impossible. The 106,000 regulatory staff in the Food Safety Department of the Ministry of Health are required to supervise around 10 million registered businesses. This number does not include all the unlicensed restraints, hotels and street sellers.
Furthermore, the Ministry of Health is only one of seven different agencies that deal with food safety. The remit of these agencies often overlaps, with agencies unwilling to act on incidents that may be the legal responsibility of other departments. In addition to this fragmentation of authority, the food testing laboratories, especially those situated in rural areas, suffer from a shortage of funding, skilled staff and modern technology.
These systematic flaws have plagued attempts at regulation and frustrated many Chinese consumers. However a recent announcement that the State Food and Drug Administration will be promoted to ministerial level as part of an effort to streamline bureaucracy in China indicates that Xi Jinping is fulfilling his promise to make structural improvements. It has also been reported that there are plans to establish a food safety standards centre, which will establish compulsory industry standards, as well as a new nationwide food safety monitoring system.
China is not the only country fighting to establish effective food safety controls. Only recently, donkey, water buffalo and goat meat was found in South African burgers. China’s neighbour India is also struggling;13% of all food failed to meet standards set by the Food Safety and Standards Authority of India.
Although China’s plans will not be easy to implement, they are an important step towards making food in China safe. The combination of official policy and consumer power is a potent one. Indeed, as the middle class in China continues to grow, consumer spending trends will accelerate changes quicker than any government can push through, and any company that falls foul of the food safety rules can expect to be severely punished by their customers as well as the CCP.