The food processing industry one of the largest industries in
India is widely recognized as a 'sunrise industry' in India
having huge potential for uplifting the agricultural economy,
creation of large scale processed food manufacturing and food chain
facilities, and the resultant generation of employment and export
earnings.
Laws governing the food industry:
The Indian food processing industry is regulated by several laws
which govern the aspects of sanitation, licensing and other
necessary permits that are required to start up and run a food
business. The legislation that dealt with food safety in India was
the Prevention of Food Adulteration Act, 1954 (hereinafter referred
to as "
PFA"). The PFA had been in place
for over five decades and there was a need for change due to varied
reasons which include the changing requirements of our food
industry.
The act brought into force in place of the PFA is the Food
Safety and Standards Act, 2006 (hereinafter referred to as
"
FSSA") that overrides all other food
related laws. It specifically repealed eight laws which were in
operation prior to the enforcement of FSSA:
- The Prevention of Food Adulteration Act, 1954
- The Fruit Products Order, 1955
- The Meat Food Products Order, 1973
- The Vegetable Oil Products (Control) Order, 1947
- The Edible Oils Packaging (Regulation) Order, 1998
- The Solvent Extracted Oil, De oiled Meal, and Edible Flour
(Control) Order, 1967
- The Milk and Milk Products Order, 1992
- Essential Commodities Act, 1955 (in relation to food)
Need for the new act:
FSSA initiates harmonization of India's food regulations as
per international standards. It establishes a new national
regulatory body, the Food Safety and Standards Authority of India
(hereinafter referred to as "
FSSAI"), to
develop science based standards for food and to regulate and
monitor the manufacture, processing, storage, distribution, sale
and import of food so as to ensure the availability of safe and
wholesome food for human consumption. All food imports will
therefore be subject to the provisions of the FSSA and rules and
regulations which as notified by the Government on 5th of August
2011 will be applicable.
Key Regulations of FSSA:
A. Packaging and Labeling:
FSSA provides for separate packaging and labeling regulations
known as Food Safety and Standards (Packaging and Labeling)
Regulations, 2011 (hereinafter referred to as the
"
Packaging and Labeling Regulations")
which lay down the statutory and regulatory requirements for
packaging and labeling of products. A plain reading of the
Packaging and Labeling Regulations, show that there are different
kinds of products: Pre-packaged, Proprietary and other specific
products as mentioned in the regulations.
Regulation 2.12 of the Food Safety and Standards (Food Products
Standards and Food Additives) Regulations, 2011 defines
"
proprietary food" as food that has not been
standardized under these regulations. Regulation 1 (8) of the
Packaging and Labeling Regulations defines
"
prepackaged" or "
pre-packed
food", as food, which is placed in a package of any
nature, in such a manner that the contents cannot be changed
without tampering it and which is ready for sale to the
consumer.
The Packaging and Labeling Regulations provide the general
requirements for labeling of food products prescribed under the
FSSA, as follows:
- The particulars of declaration required under these Regulations
to be specified on the label shall be in English or Hindi in
Devnagri script: Provided that nothing herein contained shall
prevent the use of any other language in addition to the language
required under this regulation.
- Pre-packaged food shall not be described or presented on any
label or in any manner that is false, misleading or deceptive or is
likely to create an erroneous impression regarding its character in
any respect;
- Label in pre-packaged foods shall be applied in such a manner
that they will not become separated from the container;
- Contents on the label shall be clear, prominent, indelible and
readily legible by the consumer under normal conditions of purchase
and use;
- Where the container is covered by a wrapper, the wrapper shall
carry the necessary information or the label on the container shall
be readily legible through the outer wrapper and not obscured by
it.
In addition to these general requirements specified above, every
package of food shall also carry the following information on the
label: (i) name of the food; (ii) list of ingredients; (iii)
nutritional information; (iv) declaration regarding veg. and
non-veg; (v) declaration regarding food additives; (vi) name and
complete address of the manufacturer; (vii) net quantity; (viii)
lot/code/batch identification; (ix) date of manufacturing or
packing; (x) best before and use by date; (xi) country of origin
for imported food; and (xii) instructions for use.
Since a large variety of food products are being imported into
India, under the Packaging and Labeling Regulations, it becomes
necessary to mention the country of origin of the food on the label
of food imported into India, and when a food undergoes processing
in a second country which changes its nature, the country in which
the processing is performed shall be considered to be the country
of origin for the purposes of labeling.
Therefore, the above are the statutory and regulatory
requirements that are to be complied with regard to labeling of
products that are sold in the Indian market as "pre-packaged
goods".
B. Signage and Customer Notices:
Having briefly dealt with the statutory and regulatory
requirements with respect to labeling of products, it is necessary
to understand the statutory and regulatory requirements with
respect to signage and customer notices more from the point of view
of a food outlet. It is important to note that though the
provisions of FSSA do not specifically provide for any statutory
and regulatory requirements either for signage or customer notices,
but it has certain provisions with regard to advertisement of
products by food business operators.
Section 3 (1) (b) of FSSA defines the term
"
advertisement" (which includes a
"notice") as any audio or visual publicity,
representation or pronouncement made by means of any light, sound,
smoke, gas, print, electronic media, internet or website and
includes through any notice, circular, label, wrapper, invoice or
other documents.
Section 24 of the FSSA provides that no advertisement shall be
made of any food which is misleading or deceiving or contravenes
the provisions, rules and regulations made there under. No person
shall engage himself in any unfair trade practice for purpose of
promoting the sale, supply, use and consumption of articles of food
or adopt any unfair or deceptive practice including the practice of
making any statement, whether orally or in writing or by visible
representation which:
- falsely represents that the foods are of a particular standard,
quality, quantity or grade-composition;
- makes a false or misleading representation concerning the need
for, or the usefulness;
- gives to the public any guarantee of the efficacy that is not
based on an adequate or scientific justification thereof, provided
that where a defence is raised to the effect that such guarantee is
based on adequate or scientific justification, the burden of proof
of such defence shall lie on the person raising such defence.
FSSA being applicable to all food business operators in India,
the provision with regard to advertisements would have to be
complied with.
C. Licensing Registration and Health And Sanitary
Permits
It is also important to note that FSSA, being the only
legislation applicable to the food industry throughout the country,
will also apply as far as the national health and sanitary permits
are concerned.
The Food Safety and Standards (Licensing and Registration of
Food Business) Regulations, 2011 (hereinafter referred to as
"
License and Registration Regulations")
govern the aspect of license and registration of a food business
operator.
Under Regulation 2.1 of the License and Registration
Regulations, all food business operators in the country are
required to be registered or licensed in accordance with the
License and Registration Regulations, hence no person shall
commence any food business unless a valid license is possessed by
the food business operator, and the conditions with regard to
safety, sanitary and hygienic requirements have to be complied with
at all times by them.
One of the prime purposes of these conditions is to ensure that
the food business operator maintains sanitary and hygienic
standards as specified in each food category. It is hereby
recognized and declared as a matter of legislative determination
that in the field of human nutrition, safe, clean, wholesome food
is indispensable to the health and welfare of the consumer of the
country.
It shall be the deemed the responsibility of the food business
to comply with the labeling, safety and health and sanitary
requirements laid down in the License and Registration Regulations.
The labeling requirements are specified under the regulations and
they need to be complied with at all times especially with regard
to pre-packaged goods.
Penalties:
The FSSA provides for penalties in case of any non compliance.
Generally, non-compliance with various provisions of the FSSA may
attract penalty of up to Two Lakh Rupees (
approx USD
4000). However, under Section 63, it provides that if any
person or food business operator (except the persons exempted from
licensing under sub-section (2) of Section 31 of FSSA), himself or
by any person on his behalf who is required to obtain license,
manufacturers, sells, stores or distributes or imports any article
of food without license, shall be punishable with imprisonment for
a term which may extend to six months and also with a fine which
may extend to Five Lakh Rupees (
approx USD 9000).
Other Licenses:
The FSSA being a central act has to be complied with by all the
food business operators in the country. However, India being a big
market, each state may have their local laws which may also need to
be complied with. Some of the other approvals and licenses that a
food operator may be required to obtain from various authorities
under other laws include: health and trade licenses from the
municipal corporation of the relevant area, environmental
clearance, no-objection certificate for fire prevention and safety,
registration under the police act of the respective city/state,
verification certificate under the Standards of Weights and
Measures Act, 1976 for each of the outlets issued by the Department
of Legal Metrology of the respective areas, registration under the
shops and establishments act of the respective state, eating house
license and liquor license.
A license for playing music in restaurants is also required for
playing recorded or live music. It is mandatory for a food business
to obtain insurance from any insurance company with regard to
public policy, product liability, fire policy, building and assets.
Other insurances though are not mandatory may be useful if
taken.
Some of the other registrations and permissions may include
registration under the Employees' Provident Funds and
Miscellaneous Provisions Act, 1952 if it is engaging more than 20
employees. Registration is also required under the Central Excise
Act, 1944 as in respect of goods specified in Third Schedule of the
said act, repacking, re-labeling, putting or altering retail sale
price etc. will fall into the category of manufacture. Subject to
applicability, other statutory and regulatory compliances may also
include registrations under Income Tax Act, 1861, Customs Act,
1962, sales tax, service tax and other labour laws.
Foreign Direct Investment in the Food Processing Industry:
Foreign Direct Investment (hereinafter referred to as
"
FDI") is permissible for all the
processed food products under 100% automatic route (except for
items reserved for micro, small and medium enterprises, where FDI
is permissible under automatic route up to 24%), subject to
applicable laws/regulations/securities and other conditions.
Conclusion:
The preamble of PFA laid emphasis only on provisions for
prevention of food adulteration. FSSA lays emphasis on
consolidating the laws related to food and to establish FSSAI for
laying down science based standards for articles of food and to
regulate their manufacture, storage, distribution, sale and import,
to ensure availability of safe and wholesome food for human
consumption and for matters connected with them. The new objectives
clearly go far beyond the objectives of PFA. The strict penalties
imposed in FSSA may lead to increase in corruption, as enterprises
may resort to unfair practices to avoid these penalties.
The PFA dealt with countless Government ministries handling
different food sectors as per separate orders, like the fruit
products order, and other orders related to vegetable oil products,
edible oils packaging, milk and milk products and meat food
products, which were issued at different points of time and were
sometimes overlapping and inconsistent. On the other hand, a
unified act like FSSA enables unidirectional compliance. The
administrative control of the FSSA has been assigned to the
Ministry of Health and Family Welfare thereby establishing a single
reference point for all matters and eradicating any possibility of
multiplicity of orders or the chance that any coordination problems
are caused.
Apart from the harmonization of laws relating to food quality
and standards with established international norms, FSSA aims at
regulating food hygiene and safety laws in the country in order to
systematically and scientifically develop the food industry. Thus,
the food processing industry may see FSSA as a mixed blessing but
the practical application of this legislation, being at its nascent
stage, will require some time to come into full force.