FSSAI can hold retailers responsible if found selling unapproved products

Shambhavi Anand, The Economic Times

New Delhi, 18 June 2015

The country’s food regulator plans to soon put the onus on retailers to check for product approvals and could hold them responsible if they are found selling items that have not been approved by it.

The Food Safety and Standards Authority of India (FSSAI), which has been at the centre of the recent crackdown on Nestle’s Maggi noodles and several other brands, is working on an advisory that will make clear the responsibilities of retailers, its head told ET. This will be a drastic move that will make retailers responsible for the products they stock and could render them vulnerable to regulatory and legal action in the event of anything going wrong.

"The retailers should also be responsible for what they are selling to the consumers. They should at least check for food approvals," said Yudhvir Singh Malik, chief executive of FSSAI.

Malik said it was often found that many retailers sold unapproved items for higher margins, but when confronted and challenged by food inspectors, most of them pleaded ignorance. The Maggi case first came to light after a food inspector in Barabanki, Uttar Pradesh picked up random samples of the popular noodle brand from an organised retailer and tests on it showed that it contained high levels of lead and monosodium glutamate. When the authorities sought to hold the retailer responsible, it said the item was not manufactured by it and it could not be held responsible.

While Nestle’s Maggi noodles has been taken off the shelves by almost all retailers following the controversy, many products that do not carry FSSAI approvals and have in fact been banned by it continue to adorn store shelves. The FSSAI banned some 500 products recently which include some 32 products from Tata Starbucks, cereal from Kellogg’s, poultry products from Venky’s, Hindustan Unilever’s Knorr instant noodles and a multivitamin from Ranbaxy.

While retailers declined to comment on the FSSAI’s proposed move saying they wanted to study it before reacting to it, analysts said putting the onus on the retail trade would pose several challenges in a country with nearly 8.8 million stores.

"Until now the burden of compliance lies only with the brand owner or manufacturer. But if the regulator wants to split the responsibility of compliance, execution will be a challenge. While it will not be an issue for modern retailers, who have the resources to read rule books and execute such rules, kirana shops and mom-and-pop stores may not be able to do so," said Devangshu Dutta of Third Eyesight, a retail consulting firm.

The head of a leading supermarket chain said for what the regulator is proposing to work, timely and regular communication from it would be key.

"Removing the product is a simple step but knowing which ones is tricky unless we get regular communication from FSSAI," said this person, requesting anonymity.

In the aftermath of the Maggi controversy, the food regulator has ordered testing of instant noodles, pasta and macaroni brands of seven companies including ITC, GSK Consumer Healthcare (GSKCH) and Nestle India, and declared brands made by all other companies as unapproved.

(Published in The Economic Times.)