June 20, 2012

China battles food safety challenge

A senior food expert in China revealed that only less than a quarter of the country's local food enterprises do routine checks on the quality of their food products.

Speaking at a recent food safety meeting Cai Muyi, director of the China National Research Institute of Food and Fermentation Industries, said only 23.3% of domestic food producers routinely check for quality.

"Only 5.1% of food enterprises detect for toxic or harmful substances, and less than 1.2% of them can meet the dectability requirement for all substances including food additives, biotoxins, pesticide or antibiotic residues and other kinds of microbes," Cai was quoted as saying by local media.

Cai urged food companies to update their substance detection equipment, which is mainly imported. He also suggested the government build public food examination platforms to improve food safety and give China a voice in the field of international food safety criteria.

China has suffered from food safety problems for a long time, from milk powder scandals to clenbuterol in meat and recently even maggots in the ham made by a major food enterprise.

"If domestic food companies don't catch up with the pace, they will lose competitiveness to foreign food companies within 10 years," said Liu Jiawei, a principal analyst at Dongxing Securities.

Global food majors have been making steady inroads into China for some time. Recent M&A activity has included the acquisition of Wyeth by Nestle SA, reinforcing the Swiss giant's dominance in the local milk powder market.

In 2009 Coca-Cola Co. failed in its attempt to buy domestic drinks enterprise Huiyuan after the Ministry of Commerce rejected its bid. But local players won't always be able to rely on shields from foreign competition, especially when the domestic food industry continues to suffer from serious food safety problems.