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Imported foods worth Rs 22,000 crore stuck; SC stays High Court orders
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Thursday, 14 August, 2014, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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fiogf49gjkf0d The long-simmering labelling norms issue faced by food importers has flared up into a mega crisis with the recent Supreme Court direction - interim stay on Bombay High Court’s orders on product approvals.
Interestingly, FSSAI (Food Safety and Standards Authority of India), instead of working on an early solution to months of deadlock over Rs 22,000 crore worth of imported foods, rushed to the Supreme Court seeking a direction in its favour following the HC judgement that came about a month back.
With the interim stay continuing till October 2014 and SC final judgement taking a few months, foods and food ingredients that are stuck at various ports and airports in the country awaiting approval are likely to continue rotting and resulting in piling of losses for food importers.
FSSAI chose to move the apex court, following the HC quashing all FSSAI directives that insisted on strict adherence to new food labelling norms that seek clarity on ingredients in foods before giving approval to any products.
Lindt to exit India
In the process, apart from hundreds of food importers, two global chocolate majors have suffered huge losses and one of them is withdrawing its operations from India.
While Swiss chocolate maker Lindt has decided to shut its India operations, Barry Callebaut, another Swiss chocolate manufacturer, has suffered mega losses - rejection of some 300 tonne of its imported consignments last year.
Lindt is said to be the second-largest manufacturer of Swiss chocolates in the world and supplies chocolates to over 120 countries. According to industry sources, the company which was operating in India for over half a decade has been forced to withdraw several of its consignments imported to India amassing losses to the tune of Rs 15 crore.
Sources at the Forum of Indian Food Importers (FIFI) informed that last October consignments worth Rs 8 crore belonging to the company were rejected. This was followed by rejection of Rs 3 crore worth consignments in January this year and recently another rejection happened in March.
The reason for this is that the powers that be at FSSAI refuse to give NOC (no objection certificate) to importers whose consignments are stuck at various ports and airports in the country. According to a source at FIFI, the authorities refuse to take note of the importers’ pleas either by saying, “This is not the final judgement,” or “We are waiting for a direction from the Supreme Court.”
As a result, the authority has confiscated huge number of consignments that came to the country and the process of checking any non-standardised food item with 100% sampling continues.
Fresh containers
This year so far around 300 fresh containers having fruits, primarily apples, on account of some protein enzyme, vegetables, spices, canola oil, olive oil and so on are at bay waiting for clearance for the past two months.
The cost attached to each container is around US$300 for detention and demurrages. This includes some 25 containers of olive oil, and 12-13 containers of canola oil. The total losses are said to be Rs 22,000 crore.
“The FSSAI’s view on imported food is counter-productive for us and we’ve been forced to shut our businesses,” rued a FIFI member. It says that the importers are suffering losses from 30% min to 70% max and already 10% of the importers have shutdown their businesses.
Canola oil
Some members say that the controversy being created by the authority about canola oil is not correct and the product is as good as olive oil. However, FSSAI sources said that importers need to display correctly that it’s a rape-seed oil with low uricic acid. Generally canola oil contains high (upto 40%) uricic acid.
India is one of the big importers of canola oil with almost a million litre coming every year since last 10 years. Sources with the FIFI also claimed that Rs 300 crore worth of samples were taken over by FSSAI so far with an additional cost of testing to the tune of Rs 50 crore.
Meanwhile olive oil is also caught in labelling norms requirement imposed by FSSAI. According to importers, the FSSAI is demanding higher level of salt in the oil while the Codex norms allow only 1% max limit against the demand of 5% mini by the authority.
FSSAI however claims that the process of standardisation is continuous and the apex food regulator is expected to harmonise some 11,000 standards by the end of August and subsequently will be notifying with the WTO.
But the problem of confiscating of the consignment reveals that the FSSAI still does not have many standards other than the original 377 done by the erstwhile PFA. Importers further rue that the authority still does not have standard for products such as mayonnaise which is being produced and eaten widely by consumers across the country.
A member also claimed that despite several of their representations made before the health minister Dr Harsh Vardhan, he refused to intervene.
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