The Food & Beverage Industry in China, An Attractive Destination

The Food & Beverage Industry in China

An Attractive Destination

  1. Overview

The ever-growing Food and Beverage (F&B) industry in China, with a US$ 700 billon share of the global market, is currently deemed as an attractive destination for many investors. The revenue of the F&B industry in 2019 has amounted to US$22.7 billion, demonstrating a growth of 22.5 percent comparing with that in 2018.[1] This makes China’s F&B market the biggest revenue generator in the world.

Consumer dynamic in the country is usually what the potential investors often first take notice of. According to China Brief, a growing awareness of health foods is demonstrated in Chinese consumer behavior, which has impacted on their purchasing behavior. Consumers in tier one cities (Beijing, Shanghai, Chongqing, etc.) have shown a high level of demand for foreign F&B products, and the demand for foreign F&B products are also strong in tier two and three markets.[2]

After studying the market potential for F&B products, foreign investors need to pay close attention to China’s food safety laws and import regulations as China maintaining a strict regulatory for F&B products. Foreign F&B products are falling under the regime as soon as they reach the country.

  1. China’s Food Safety Law

(1) Health food

Health foods that contain ingredients outside the approved list of health food ingredients must be registered with China Food and Drug Administration (hereinafter “CFDA”).[3] CFDA recordal is required when health food is imported for the first time and serve to supplement vitamins, minerals and other nutrients. Other health food must be recorded with provincial level food and drug administrations. The recent draft of Implementing Regulations has suggested that importation should have recordal of three months.

Furthermore, label and instruction on packages of health food shall contain the statement “this product cannot replace medicine.”[4] That is, it should not refer to any preventive or therapeutic function. Functions and ingredients of the health foods must be consistent with those stated on their packages.

(2) Online food platform

Ordering food online is now a vital trend in China for both domestic and foreign investors. The safety of food purchased over the internet has raised issues. Providers of third-party online food trading platforms must review a trader’s permit and the real identity of the trader shall be registered. As soon as online food platform provider is aware of food safety violations, it shall stop the retailers from such activities and report them to local FDAs. For serious violations, the provider must immediately stop providing the internet platform service.

(3) Food additives

According to Article 3 of GB 2760-2011[5], the usage principle of food additives is that, firstly, it should not generate any health hazard for our body. Secondly, it should not conceal food decay and deterioration. Thirdly, the additives should not be used for the purpose of addition, adulteration and falsification. Furthermore, it should not reduce the nutritional value of food itself and the usage amount in food should be reduced as far as possible. Permitted food additives are listed in the instrument as annex.

  1. Import Regulation / Labelling

A manufacturer and international exporter must be registered upon approved organisms as the Certification and Accreditation Administration (“CAA”) in the country where the product will be exported in the “list of importations of food submitted to the registration of the company”. Health food products are submitted to special conditions for registration which is valid for 4 years and the term is extendible if needed.

China requires all imported food products to be labelled in Chinese simplified characters in order to facilitate the comprehension and the clearance, but also need to mention:[6]

  • Standard name of the food product
  • List of ingredients in percentage
  • Names and addresses of manufacturers, local agents or distributors
  • Date of production, date of suggested consumption, expiry date and guide for the storage.
  • Country of origin
  • Category of quality
  • Code of national norm / Industrial norm for the production
  • Specials contents

The content of the label shall be approved by the Service of Inspection and Quarantine (CIQS), as the regulations are continuously changing, Wintertaling China Desk is ready to assist you in your F&B investment in China.

[1] DBS Bank, China/Hong Kong Industry Focus: China Food & Beverage Sector, pp. 1 < https://www.dbs.com/aics/pdfController.page?pdfpath=/content/article/pdf/>

[2] DBS Bank, China/Hong Kong Industry Focus: China Food & Beverage Sector, pp. 3 < https://www.dbs.com/aics/pdfController.page?pdfpath=/content/article/pdf/>

[3] 2015 Food Safety Law of the People’s Republic of China (Food Safety Law), < https://www.hfgip.com/sites/default/files/law/food_safety_-_16.02.2016.pdf>

[4] Andrew Sim , Esq., and Yilan Yang, Esq, China: An Overview of the New Food Safety Law, < https://www.foodsafetymagazine.com/enewsletter/china-an-overview-of-the-new-food-safety-law/>

[5] http://www.svscr.cz/wp-content/files/zivocisne-produkty/GB_2760-2011_Food-Additives.pdf

[6] Prepackaged foods Label Regulation, GB771, 8-2011, <http://www.nhfpc.gov.cn/sps/s3594/201402/544c0539b95d4d35b99ffbc105579071.shtml>

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