MANAGING FOOD SAFETY & QUALITY IN THE NEW GLOBAL TRADE ENVIRONMENT By Pitak Supanantakarn, Regional Director, Food Services Asia Pacific Intertek Testing Services HOW TO MANAGE THE PRODUCTS TO EXPORT PROMOTION, PHNOM PENH, CAMBODIA 17th December, 2009

THE FOOD SAFETY CHALLENGES Complexity of agri-food supply chain – no. of suppliers, processes, ingredients, etc. Food trade globally – global sourcing & geographical coverage. Rapid globalization of food production increased potential likelihood of food contamination Gaps in product safety implementation Additional and more specific laws and regulations Product liability – Brand Protection….. Consumers are better educated and well informed about food & food related issues. Customer demands and preferences constantly changing….

NEW CONSUMER MENTALITY & EXPECTATIONS Consumers are more educated and better informed about food and food related issues. Appetites for conformation – where it grow, how it was produced,.. Life style changes – convenient, ready to service.. Quality and safety concerns – product and services Focus on “Quality” rather than “Quantity” Seeking better values – “Less for more”.. Ecological concerns,… global warming, Social concerns - ethical issues, social responsibility, occupational health and safety… Others – animal welfare, sustainability approach,… IT IS,……THE MARKET CHANGES…!!! Intertek is a global leader in testing, inspection and certification of products, commodities and systems. We offer customers an unparalleled advantage through applying our broad technical expertise to fulfil their individual needs. Our range of services for quality helps customers, such as manufacturers, retailers, governments and traders advance their reputation and master the complexities of the global marketplace. Our advisory services help customers deal with increasingly complex regulation and social issues

GLOBAL FOOD CRISIS HYGIENE, DISEASE AND CONTAMINATION To date, the world has faced with food crisis of variable nature, for example: Mad Cow disease Sudan Red Dioxin Melamine Causes have been traced to various possibilities such as negligence in causing contaminated animal feed and chemical residue but also to the extent of deliberate adulteration ANIMAL WELFARE Compromised welfare of animals and livestock

GLOBAL FOOD CRISIS FRAUD Other deliberate attempts affecting global food supply include product counterfeit, illegal sourcing and mislabeling of products. Cases have involved : Fish products African coffee Belgian chocolate ENVIRONMENTAL Pollution Over-harvesting Ecological imbalance

21st Century FOOD ISSUES Private Label Foods flood the Marketplace Health & nutrition greatly influencing Product Development Global Financial Crunch, Cheaper Price  Production Costs, Cuts on food spending Decreasing Consumer Confidence Clamor for Foods that meet Health, Safety & Environmental Needs Changes in Preferences and Sourcing Patterns Problems on Traceability - Supplier Food Safety Controls Product Mislabeling & Misinformation (Allergens, GMO’s, etc) Risk & Recall Communication Migration of Hazardous Substances Concerns on Food Bio-security Consequences of Climate Change Environmental Degradation World population 6.7B (2010)  9B (2040)

Doing nothing is no defense! WHY MANAGE FOR FOOD SAFETY Doing nothing is no defense! Customer demand it It’s good for business Potential product liability Regulators requirement Nothing remains the same.. Your past experiences guarantee nothing..!!! Playing the media Failure to manage risk: - Always costs money…! Always damages a reputation.. ! Public recalls..!

MANAGING FUTURE RISKS.. THE NEED Why Managing Risk? Change in technology Change in the law # Change in consumer attitude toward risk Change in customer requirement & expectations Change in business environment….. …..never be the same..!!

THE BUSINESS PROCESS Increasing Time Investment Monetary Emotional 9

Example: AGRI-FOOD SUPPLY CHAIN Soya / Maize Animal Feed Live Animal Raw Meat Primary Agriculture Animal Feed Production Animal Production Animal Slaughter & Processing Cooked Meat Further Processing & Cooking Breeding Stock Ingredients & Packaging Medicines Seed, Pesticides Storage & Distribution

Complexity & Multiplication of Impact CHAIN TRACEABILITY Ingredients Raw materials Packaging Storage Man. Process Storage & Transport Retail Complexity & Multiplication of Impact Reduction of Risk (Risk = Hazard x Exposure)

Agri-food Supply Chain – Integrated Quality Program From Farm To Fork Growers/ Farmers Collector/ Primary producer Processors/ Packers/ Manufacturers Distributors/ Wholesales/ Retailers Consumer GlobalGAP, Organic, Non-GMO BRC-Packaging Halal, GMP/ HACCP BRC-Packaging BRC-Food IFS, Halal GMP/ HACCP “one brand” Certification “one brand” certification Supply chain inspections From Farm Management standards: ISO 9001, 14001, 22000, OHAS 18001, SA 8000, HACCP, To Fork Product standards: Organic, non-GMO, Halal, Q&S, etc. Traceability and Testing Product liability insurance, Training, Risk management, Consulting, etc

What Should the Industry Expect? Inspection ”One stop shop” BRC Testing ISO 9000 HACCP IFS ISO 22000 NON-GMO GlobalGAP Program Management Security Social Accountability Environmental HALAL ORGANIC

Integrated Food Quality and Safety Systems ENHANCING FOOD QUALITY & SAFETY Efficiency Profitable Integrated Food Quality and Safety Systems Market and Legal compliance

CIES TOP MIND SURVEY Ranking 2009 Ranking 2008 Ranking 2007 Economy and Consumer Demand 1 4 11 Food Safety 2 8 Corporate Responsibility 3 5 Competitive Landscape 9 6 Retailer Supplier Relations A CIES survey conducted in January 2008 across approximately 400 retailers and manufacturing CEOs indicates that food safety remains a high priority among this leadership group. The issue of food safety jumped 6 places this year to second place in the survey. There were a number of alerts, recalls, and illness outbreaks in the United States, Europe, and Asia in 2007 that once again shifted consumer perception about food safety. The amount of media scrutiny over these events only heightened their concern. Where ever the threat to food safety originates, a wider-reaching global supply chain exposes our food supply to enhanced risk and much of the responsibility falls to those who ultimately produce and sell the food. As the distance from farm to fork grows wider, it becomes harder for retailers to control every point in the supply chain. Source: CIES France 15

GLOBAL FOOD SAFETY INITIATIVE GFSI launched at the CIES Annual Congress in 2000, following a directive from the food business CEOs. Food Safety was then, and is still, top of mind with consumers. Consumer trust needs to be strengthened and maintained, while making the supply chain safer. Managed by CIES – The Food Business Forum GFSI Mission: “Continuous improvement in food safety management systems to ensure confidence in the delivery of safe food to consumers”   At this time, food safety was top of mind with consumers due to several high-profile recalls, quarantines, and negative publicity about our industry. The retailers and manufacturing CEOs agreed that consumer trust needed to be strengthened and maintained, while making the supply chain safer. Source: CIES France 16

GFSI TECHNICAL WORKING GROUPS Source: CIES France 17 17

Codex Alimentarius Standards FOUNDATION IN SCIENCE Codes Of Practice GFSI Recognised Schemes ISO Standards ISO 22000 Codex Alimentarius Standards HACCP Principles Legislation Supplementary Codes Schemes Standards Principles Requirements Source: CIES France

BENCHMARKING – WHAT DOES IT MEAN? « Once certified, accepted everywhere Source: CIES France

SOME COMPANIES NOW ACCEPTING GFSI RECOGNISED SCHEMES Source: CIES France 20 20

MAIN CHALLENGES IDENTIFIED BY SUPPLIERS No management systems in place at the production unit Limited information of expectations and needs Reduced support of implementation stage from some buyers Short term relation or view Very competitive market Reduction in prices and margin Increase of global production Standards developed in buyer markets for implementation at sourcing markets

HOW AND WHAT TO IMPLEMENT BY SUPPLIERS? Management systems programs Systematic and proactive approach, rather than reactive with costly actions Consult your clients, understand their needs Identify best fitting alternative of recognized programs Ensure top management endorsement Develop reasonable, timely and cost-effective action plan Monitor program implementation and efficiency periodically Select qualified and experienced service provider for consultancy or external verification

INDEPENDENT VERIFICATION – WHY USE IT? Increasing consumer demand for product differentiation in global markets Buyers are increasingly using Assurance Schemes to verify quality Excellent tool for the operator to: Validate their quality and/or traceability system against international standards To communicate to customers and suppliers the quality standard they have achieved Increases producer’s credibility Verify label claims – Halal, Non-GMO, organic, Kosher, fair trade, etc Certification an increasingly valuable “ticket to trade”

CHALLENGE TO THE SUPPLY CHAIN MANAGEMENT Customer requirement is constantly changing.. Endless.! Language Culture Local legislation Time and distance Individual interpretation International legislation Lack of resource and support Using quality system in the wrong reason..

OUR FOCUS Intertek Food Services Food service industry: Testing (all levels) Inspection (all levels) Certification (3rd party) ISO 9000 ISO 22000 Food Safety (BRC, IFS, SQF, etc.) Consulting Training Preassessment Asia EAME America Quality assurance Food Services? Certification Fire wall Advisory System Process Product Food Services

INTERTEK INTELIGENCE ─ Countries 110 ─ Laboratories 440 ─ Offices 630 ─ Employees 24.000 Floated May 2002 FTSE 100, Support Services Sector Market capitalization £1.6bn Intertek do assess, identify and predict any potential hazards and quality promises from concept to distribution. This is carried out with out with combined testing and auditing services by our global network of laboratories and industry experts. AMERICA 1/3 Turnover, People EAME 1/3 Turnover, People ASIA 1/3 Turnover, People

Thank you for your attention For more information: www.intertek.com Pitak Supanantakarn Regional Director – Food Services Asia Pacific Mobile: +66 81 841 5314 E-mail: pitak.sup@intertek.com