IT IS AN embarrassment for a company that says “food safety and quality assurance are guiding principles in delivering products that go above and beyond our customers’ requirements” when it is accused of supplying meat to fast-food chains that has gone past its sell-by date and other food safety violations. The Shanghai Municipal Food and Drug Administration is investigating Shanghai Husi Food, the local unit of OSI Group, a food supply group based near Chicago in the United States, for the “alleged use of expired raw food material production and the processing of it in food.” The allegations were first made in a report on Dragon TV.
McDonald’s and KFC’s owner Yum, the two top brands in China’s $174 billion fast-food market, are among the global fast-food franchises that OSI supplies in China. McDonald’s buys beef, chicken and lettuce from Shanghai Husi. Like KFC, it has immediately stopped buying from it.
For both chains, it is another food-safety setback following one in 2012 involving chicken pumped with excessive amounts of antibiotics. KFC’s owner Yum has also hand to contend with the reputational challenge of an outbreak of bird flu. This Bystander also recalls Wal-Mart being caught up in an incident in 2011 involving out-of-date duck meat. And we won’t even mention the case of fox allegedly being passed off as donkey meat.
OSI says it is dealing “directly and quickly” with what it says it believes is “an isolated event”. Most of all, this latest food-safety scare highlights the difficulty for any multinational in enforcing strict processes to assure quality and product safety along its supply chain when that chain is dependent in large part on local staff.
Unilever, the soaps to Slim-Fast packaged consumer goods group, has a well-established presence in China for both its international and local brands. It has had a global R&D headquarters in Shanghai for a couple of years. Earlier this year, it became the first European multinational to issue renminbi-denominated bonds. So the discovery of unusually high levels of toxic rare earths in a batch of one of its Lipton brand teas is a poke in the eye for it, albeit one that a number of multinationals, including Wal-Mart and Johnson & Johnson, have experienced recently.
The General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) says that in a check of 58 brands of oolong teas around the country, it found 19 samples in which traces of rare earths were higher than the permitted 2 milligrams per kilogram. In Lipton’s case, it was 3.2 milligrams per kilogram; the highest concentration found was 5 milligrams per kilogram in a tea from Fujian. Lipton’s sample, a 50 gram box of Iron Goddess of Mercy tea, was tested in Anhui. (AQSIQ news release).
Oolong tea producers sometimes add fertilizers containing rare earths to the soil as they are believed to enhance flavor and raise yields of oolong teas. A parallel test by AQSIQ of 90 black teas turned up no higher than permitted concentrations of contaminants, and the only two samples that failed appear to have done so for passing themselves off as higher grades of tea than they really were.
Excessive fertilization risks transmissions of toxins in damaging concentrations to tea drinkers. Unilever has said it believes its offending oolong tea picked up its trace amounts from the soil; and that it wasn’t a case of adulteration during production. The batch in question, which was produced last January, has already been recalled and destroyed, the company says.
AQISQ officials in Sichuan, who have been investigating tea production there since September, say some local producers were adding substances such as lead, chromium, talc and glutinous rice paste to their teas. Slipshod, unhygenic and ill-regulated production has emerged as a common theme behind many of the product safety concerns that have been such a touchy issue with consumers since the deadly melamine-tainted infant formula scandal of 2008. Beijing has made strides in improving food and product safety quality controls, but the sheer size of China’s food and consumer goods industries – and the persistence of cosy links between local companies and officials – makes it an overwhelming task for regulators. For political reasons, Beijing has been reluctant to allow the growth of grass-roots consumer movements to share the load, just as for other political reasons, the odd pop at multinationals – Lipton is the only well-known foreign-owned brand fingered this time – is irresistible to show that there are no clean hands anywhere, so to speak.
China’s Communist Party worries greatly that popular distrust of the safety of the country’s food supply may turn into distrust of its right to rule. Ever since the melamine-tainted infant formula scandal of 2008, its administrative might has been directed at calming and cajoling a disconcerted citizenry on this point, with at best mixed results as one tainted food scandal has followed another. The General Administration of Quality Supervision, Inspection and Quarantine (Aqsiq) shut down great swathes of the dairy industry in April. It also said it would continue to step up its inspections, on the lookout for both health risks and officials who turn a blind eye to food safety violations, a significant problem at local level. In addition, the food safety law has been amended to impose harsher punishments, including the death penalty, in such cases.
The result of those investigations has been 2,000 arrests and 5,000 businesses shuttered, mostly all small enterprises. The numbers sound impressive until set against the scale of China’s food industry. Nearly 6 million food producers were inspected. Yet only one in a thousand was found to have been adulterating food with illegal additives? Little wonder that consumers’ confidence that their food won’t sicken or kill them remains so low.
Little wonder, either, that citizens who can afford to are taking matters in to their own hands. The China Law Blog reports processed food being carried across the border from Hong Kong in prodigious volumes, with custom officials apparently turning a blind eye to it’s well-heeled porters; the BBC reports middle-class professionals–lawyers, programmers, teachers and the like–taking to allotments at weekends to cultivate their own fruit and vegetables. Neither development will sit well with a Party that, for all it’s efforts, can’t keep a basic bargain with its people to keep their food supply safe.
Three more child deaths from adulterated milk, the poison being nitrite additives in this case (via BBC), underlines how broken China’s food production system remains despite extensive efforts to fix it in the wake of the melamine-tainted infant formula scandal of 2008. The sheer numbers of small subsistence farmers scrabbling to make a living by any means and the prevalence of local officials overlooking transgressions by local cronies further up the supply chain has overwhelmed the endeavors of central government.
Help may be at hand from an unlikely source: new food safety legislation passed in the U.S. in January. The Food Safety Modernization Act (FSMA) tightens the purview of the U.S. Food and Drug Administration (FDA) over imported foods, including inspections at source. In a timely post on the China Law Blog, guest blogger Marc Sanchez, an attorney specializing in food and product safety matters and who writes the Food Court blog, writes:
China is the fourth largest exporter of food to the U.S…..Foreign inspection of Chinese facilities means increase pressure for China to modernize [food production]…China has attempted reform legislation, but its vast food production system remains largely unchanged. If FSMA receives its funding, it will act as a new push for rapid modernization of China’s food safety system. it will place FDA on the ground in China and it will increase border inspection of Chinese food coming into the United Sates. There is no way the FDA can do what the Chinese bureaucracy has been unable (or unwilling) to do, but it can act on China’s pride. China will not want to make the list of countries blocked from being able to export its foods to the United States.
Two comments: First, the U.S. will have to be prepared to fund FSMA foreign food inspections. With budget cutting, not spending, the crie de jour in the U.S. that is not a given. As it is some polls have shown Americans think 15% of the U.S. budget is spent on foreign aid (the actual number is less than 1%) so paying to clean up China’s food supplies, as it will inevitably be portrayed in some quarters of the U.S., will not go over well with some American taxpayers. Second, acting on China’s pride can always be a double-edged sword.
The improvement in quality standards at China’s dairies have been so patchy since the melamine-tainted infant formula scandal in 2008 that Beijing has moved to close down vast swathes of the industry. Operating licences have been denied for 533 milk producers, nearly half the country’s 1,176 dairies. The General Administration of Quality Supervision, Inspection and Quarantine (Aqsiq) had said in March that all diaries would have to reapply for their licences by July. It says that 107 of the 533 who have lost licences will be allowed to reapply once they have improved their quality controls.
Local governments have been sending resident supervisors into all dairy enterprises to enforce health and safety regulations since last October when new rules came into force tightening the controls over the production and marketing of melamine, a toxic industrial chemical used to make plastics, fertilizers and concrete but which can increase milk’s apparent protein value. Dairy safety regulations had already been tightened in 2008 in the immediate aftermath of the tainted milk scandal that killed six babies, sickened more than 300,000 children and all but closed down China’s dairy exports that year.
Yet batches of contaminated milk and milk powder have continued to turn up (2,334 tones of it as of February). Some came from 2008 supplies that should have been destroyed but which got unscrupulously diverted into a sort of dairy black market. However, the newly announced licence revocations suggests that long-standing suspicions that some dairy farmers were continuing to pad out their milk with melamine were well founded.
Aqsiq says it will continue to step up its inspections, on the lookout for both health risks and officials who turn a blind eye to food safety violations, a significant problem at the local level. The newish food safety law has been amended to impose harsher punishments, including the death penalty, in such cases.
Public concern about unsafe food has been intensified recently by the discovery of illegal chemical additives in pork. The latest food safety scare is shrimp soaked in chemicals to give them more weight. Last month the Office of the Food Safety Commission said as well as dairy products and meats, its inspectors are most concerned about the safety of edible oils, health foods, food additives and alcohol. The Party is most concerned that popular distrust of the safety of food supplies may turn into distrust of its right to rule.
On the face of it, the two-and-a-half years jail sentence imposed on Zhao Lianhai for campaigning on behalf of the victims of the melamine-tained infant formula scandal that struck in 2008, is simply bizarre. Zhao, a former editor of a state food safety publication and the parent of one of the 300,000 sickened children, though not of one of the six that died, was convicted of social disorder (via BBC).
The tainted milk scandal all but closed down China’s dairy exports in 2008 and was an embarrassment to the government, particularly domestically. Following an initial cover-up at the local level, central government acted decisively. More than 20 people were convicted in connection with the scandal and at least two sentenced to death. Parents of affected families were offered compensation. Tougher new food safety rules and procedures were introduced last year to restore public confidence in what people were eating and drinking. In September, officials readied a new crackdown on melamine-tainted milk that has still be turning up as the new rules came into force. Just this week, the government said it would become more open with the public with food-safety information.
New regulations from the health and commerce ministries and the General Administration of Quality Supervision, Inspection and Quarantine define what information should be publicized and by which government departments. Previously they have been typically bureaucratically tight-lipped, letting food safety information come out mainly through media reports. But “in many cases, from milk powder to the crayfish, false news was occasionally delivered to consumers and this hurt public confidence in China’s food safety and the government’s credibility,” said Deng Haihua, spokesman for the Ministry of Health, the main government agency in charge of overseeing food safety (via China Daily).
Wherein lies the clue to Zhao’s sentence. The credibility of the government’s ability to take care of its citizens over everything from tainted milk and the earthquake resistance of school buildings to getting richer is an important plank of the platform on which the Party’s legitimacy to govern rests. It was severely tested by the tainted milk scandal and the government’s response to it. Zhao’s efforts to publicize the scandal, organize a parents’ self-help group and to get better compensation for families was seen as saying that the government was falling short in protecting its citizenry. That was a direct political challenge. Party strategists have long feared single-issue pressure groups as a potential threat to the Party’s legitimacy to govern and a possible kernel of opposition parties. Thus even single-person pressure groups are not to be tolerated.
Despite the melamine-tainted milk powder scandal that killed six babies, sickened more than 300,000 children and all but closed down China’s dairy exports in 2008, batches of contaminated milk are still turning up, the latest only this month. Some of that is supplies from 2008 that should have been destroyed but which got unscrupulously diverted into a sort of dairy black market. But the suspicion has never gone away that some dairy farmers were continuing to pad out their milk with melamine, a toxic industrial chemical used to make plastics, fertilizers and concrete but which can increase milk’s apparent protein value.
That those suspicions are well founded is supported by proposed new food safety regulations. These tighten the rules on the production and marketing of melamine, including setting up a register of wholesalers to track distribution of the chemical to retailers and getting local governments to send resident supervisors into all dairy enterprises to enforce health and safety regulations, which have already been tightened since 2008. The new rules also call for all dairy enterprises to test their products for melamine before distributing them and for food enterprises to check dairy products they buy.
The new rules come into effect at the end of October. Dairies that break them face being shut down. We also expect an intensifying of the crackdown on any dairy farmer or milk producer found to be using melamine, and the imposition of some exemplary sentences.