International Food Safety and the Global Food Chain: China’s role Richard Gilmore President/CEO of The GIC Group Managing Director of Global Food Safety Forum

China Background Growing food product exporter Ingredient supplier internationally

Background Incidents US EU Salmonella Dioxin Egg, 2010 Peanut butter, 2008 - 2009 EU Dioxin Germany and others, 2010

Background Incidents China Melamine-tainted infant formula, 2008 and 2010 Dairy products containing leather-hydrolyzed protein, 2011 Cenbuterol-tainted pork, 2009 and 2011

Xinhua news Probe into pork problem in China March 23 -- The State Council's call for a thorough probe into the scandal of feeding pigs with banned substances (ractopamine and clenbuterol) will help re-establish the public's confidence in the government. China's top legislature launches new round of inspection on food safety law implementation March 24 -- The Standing Committee of China's National People's Congress (NPC) launched a new round of national inspections to ensure the country's Food Safety Law is properly enforced. China targets dairy products, meat in food safety campaign for 2011 March 25 -- China has rolled out its annual working plan to beef up food safety in 2011, as more food safety scandals have entered media spotlight and aroused public concerns.

Factors increasing food-borne disease Increased consumption of high-value food commodities Meat Poultry Fresh produce Doubling of the global demand for food and of the international trade in food

Factors reducing food-borne disease Ability to first detect and investigate a food safety issue and then to develop effective control measures Key role Intergovernmental organizations International bodies

Threat to the global food chain Pathogens and non-pathogens Fraud Weak regulatory Defrauding the consumer

Problems Increasingly inter-connected global food supply chain vs. fractionated management of the food chain Direct and indirect public health threats Rising costs of remedies Decreased sales Recalls and destroyed product, and Penalties from injured parties seeking compensation through court system Dislocation effects on a multiplicity of trade and economic indicators Lack of consumer and commercial incentives to underwrite national/international food safety systems

China dairy case Rapid growth fueled by large investments from multinational dairy firms Highly modern and concentrated processing sector vs. raw materials from millions of small, poor and uneducated traditional farmers Government support and encouragement for growth vs. little emphasis on inspection and safety issues

China dairy case Melamine crisis prompted Chinese new food safety law Mandate regular inspections with no exemptions New allowable tolerances for melamine in dairy products

Legislations and enforcement Food Safety Law, China, 2009 Food Safety Modernization Act, US, 2011 Science-based and preventive Import-Related Provisions Accreditation Process for Third Party Auditors Foreign Supplier Verification Program Voluntary Qualified Importer Program Third Party Certification

Legislations and enforcement Lack of harmonization of standards/ certification Regional differences in enforcement/ compliance Overlap and lack of enforcement resources in place Insufficient collaboration platforms for public/ private sector

Non-government initiative Transaction oriented strategy Building an International Collaborative Network standards

Non-government initiative Transaction oriented strategy Creating a collaborative industry and industry/public sector platform Problem solving at operational level, food safety training, platform provider of dialogue Designing risk minimization strategies for Asian markets and global food chain

Non-government initiative Building an International Collaborative Network standards Certification HACCP SQF BRC IFS Third party audit Industry accepted Government recognized

Chinese consumers Chinese consumers have the highest willingness to-pay for Government certification program Third-party certification Traceability system Product-specific information label

Survey of Beijing consumers Consumer awareness, willingness to pay, and price premiums for HACCP-certified milk products <20% respondents was aware of HACCP After receiving information on HACCP nearly all respondents were willing to pay a modest price premium for HACCP-certified products Price of products with HACCP labels in Beijing supermarkets about 5% higher

Non-government initiative Building an International Collaborative Network standards Harmonization and International food safety standards

Non-government initiative Conversation platform Trade delegation visits to US and China Workshop or on-site

Non-government initiative International expert resources and professional expertise Capacity building GFSF Food Safety Workshop Meat, November 2010 Dairy, June 2011 Exporters, June 2011

Non-government initiative Rapid response team Voucher System

Thank you!