By Mark Schaub  King & Wood Mallesons’ FDI Group

According to Chinese media reports last year, six children died and nearly 300,000 others were sickened after consuming milk powder containing melamine, a toxic industrial chemical that was added to show a higher protein level in the milk powder. The melamine contamination of dairy products was discovered to be widespread. Concerns about food safety have surfaced in China long before the melamine dairy scare: sub-standard baby milk produced in Anhui, Longkou noodles containing lead from Shandong, fake alcohol in Guangdong, soy sauce made from human hair (still not clear how that works in practice), eggs with melamine – this list is long and a cause of grave concern to Chinese consumers.

This unrest in relation to food safety led to an Asian Development Bank policy note being delivered to the PRC State Council in 2007. The policy note was the result of a technical assistance project between the PRC State Food and Drug Administration and the World Health Organization. The note was generally positive and commented favorably on the great efforts made by the PRC government to improve food safety. Despite some progress, problems remained – in particular in respect of inter-agency coordination and the lack of a framework law in respect of food safety. The latest milk powder problem may have been the catalyst that further sped up the introduction of the new law.

As such, the PRC Food Safety Law was approved by the National People’s Congress (NPC) on February 28, 2009, and provides a legal basis for the government to strengthen food safety control “from the production line to the dining table.”

The law which goes into effect on June 1, 2009, consolidates hundreds of regulations and standards covering China’s 500,000 food-processing companies and promises tougher penalties for producers of tainted products.

The new Food Safety Law further establishes an enhanced monitoring and supervision system, a product-recall system and a set of national safety standards.

Improved Regulation – pursuant to the law, the State Council will set up a province-level food safety commission. The current system of splitting food safety responsibilities among many different agencies has long been blamed for the uneven enforcement and confusion in the market. A major problem in the past has been the patchwork of standards. In order to combat this, the new law stipulates a set of mandatory national food safety standards. This was a key concern voiced in the Asian Development Bank policy note. Food safety standards will be the only mandatory food standards and accordingly, all food producers and business operators shall follow such food safety standards when engaging in food production and related business activities.

Despite the establishment of a food safety commission, the law still foresees a role for a variety of departments including the departments of health, agriculture, quality supervision and industry & commerce. These departments will shoulder different responsibilities such as risk evaluation, making and implementing safety standards, monitoring of food production and distribution etc. All in all the new law will likely make it much easier to determine the correct authority to be addressed and also to deal with co-ordination issues in case a problem arises.

Improved Monitoring – the new law establishes a food safety risk system to monitor food-borne diseases and food contamination as well as a food safety risk assessment system to assess risks as to biological, chemical and physical hazards in food and food additives. These safety systems will be regulated and implemented by the health administrative department of the State Council. In addition, the result of food safety risk assessments will also flow into revisions to food safety standards as well as to how food safety is supervised and administrated. The Food Safety Law focuses on prevention rather than resolving problems that arises.

Another important step the law takes is to cancel the exemptions from the inspection system. A major problem in recent years has been the system of “trusted” companies. These trusted companies were left largely unsupervised. As in the case of Sanlu, it turned out that some of the trusted companies were actually not to be trusted. The trusted system was cancelled by the Food Safety Law. Sanlu’s shadow looms large over the legislation. As a result, the law pays special attention to the issue of food additives that lay at the heart of last year’s infant formula scandal. Additives are prohibited unless proven to be both necessary and safe.

Food Recall Procedures– in the event that the preventative systems do not succeed, the law also establishes a regime for food recalls. Article 53 provides that a food producer which detects non-conformity with food safety standards shall promptly stop production, recall food already in the market place, issue a notification to related producers, business operators and consumers and record the recall.

Improved Enforcement– no matter how well designed a food safety system is, there will still be a need for coercion in implementation. Severe punishments are foreseen to warn off potential offenders. Enterprises found producing or selling sub-standard foodstuffs can be subject to claims of up to 10 times the price of the product in addition to compensation for the harm the product causes to the consumer. In severe cases criminal prosecution is also likely.


The PRC Food Safety Law will become effective June 1, 2009. For food manufacturers, abiding by the law may mean stricter tests on raw materials and tighter control of the manufacturing process. Compliance will likely increase the cost of production. The new law is an umbrella law which aims to establish a comprehensive supervision system for food safety and resolve turf fights between various supervision authorities and set national guidelines. The adoption of this law will not immediately change the food safety landscape. However, careful implementation will lead to improved food quality and safety for consumers of PRC products.