Prabodh Halde

Head – Regulatory MARICO LTD

VP-AFST Mumbai.

Indian Vegetable Oil Landscape &Regulatory Changes

Malaysia – India P alm OilTrade Fair & Seminar 2012

7 - 8 June 2012ITC Maratha Hotel, Mumbai

Organized by :

What we will cover

Indian Food & Oil Industry

Transition form PFA to FSSAI

Impact on FBOsCompliance and penalties

Issues

Way forward

•Indian Food & Oil Industry

3

Indian Economy

Today India is one of the biggest agro based country with strong economical growth, with a $ 800 billion GDP, growing at 6% annually (8% in 20010-11), is the world's 12th largest and one of its fastest growing economies

Though it is number one in Agricultural production, our Processing rates are far below compared to other developed countries.

Increasing middle class segment gives opportunity to food processing sector and thus it is called as rising sector.

New FSSAI act has also provided huge opportunity in various sectors including Nutraceutical and functional food

4

John E. PetersM Dr. A.P.J Abdul Kalam

Hon’ble Ex. President INDIA 2020 a Vision for the new Millenium ( Chapter 4 Food, Agriculture & Processing )

India At A Glance

India will be word power in Food & Agriculture by 2020

5

India India’s Rank in World Production

Arable Land (Million ha) 151 2Irrigated Land (Million ha) 55 1Wheat 72 2Rice, Paddy 124 2Coarse grains (including maize) 29 3Milk 91 1Fruits 47 2Vegetables 82 2Edible Oilseeds 25 3Pulses 15 1Sugarcane 245 2Tea 0.85 1Cattle (million) 186 2

An overview of Indian Agriculture

6

7

Food processing sector

Food Processing

Fruits & vegetable processing

.Dairy

Meat & Poultry

.Marine .Grain processing

Oils and Fats

Beer and Alcohol

Consumer products

Biscuits

Snacks

beverages

PRESENT VALUE 5 LACS CRORE or 850 Billion USD

Indian Oil Industry

India has shown steady growth of 4.5% over last 10 years.

Per capita consumption of oil is 13.3kg/yearVs 24 Kg/year of world’s average.

In respect of volume Palm,Soya bean Oil and Mustard are three largest oils consumed in India

Palm -46%Soyoil – 16%Mustard – 14%

Imports are steadily increasing from 3% in year 1992 to 55% in year 2011.

8 SOURCE : SEA

Indian Oil Industry

In India the oil seed productivity is very low 950 to 1000kg per hector ( 1/3 rd of world’s average)

The Production is stagnated at around 27 million MT/yr and oil demand is increasing by 7lacs tonnes per year and thus India has to depend on Imported oils.

9

Import of Vegetable Oils Edible, Vanaspati & Non-edible for 2005 to 2010

(Qty.in Mn.T) Vegetable

Oils (Nov.-Oct.)

2009-10 2008-09 2007-08 2006-07 2005-06

Edible Oils 8.82 8.18 5.61 4.71 4.41 Vanaspati(E) --- 0.02 0.05 0.25 0.30 Non-edible 0.42 0.46 0.65 0.63 0.68 Total 9.24 8.66 6.31 5.59 5.39

Source : SEA Data

10

0

10

20

30

40

50

60

70

80

90

100

Qty

Edible oil status

Domestic Veg. Oil Availability

Import of Edible Oil

Self Sufficiency (%)

REF : SEA DATA

•Indian Food Laws

11

Food Legislation – Milestones in India

1899 : States’ / Provinces’ own food laws with differencein standards for the same commodity --Conflicts in inter provincial trade.

1943 : Central Advisory Board for Central Legislation that brings in uniformity throughout the country.

1954 : Central Legislation –Prevention of Food Adulteration Act, 1954. Rules and Standards framed under the Act 1955.

2006: FOOD SAFETY & STANDARDS ACT – 2006

2011.: FSSR 2011

2012 – FSS Import Regulations

PH:PIM13

DEFINITION OF FOOD UNDER PFA ACT, 1954

“Food” means any article used as food ordrink for human consumption, other thandrugs and water and includes:-

13

PH:PIM14

DEFINITION OF FOOD UNDER FSSA ACT, 2006

Food means any substance, whether processed, partiallyprocessed or unprocessed, which is intended for humanconsumption and includes primary food to the extent defined inclause (zx), genetically modified or engineered food or foodcontaining such ingredients, infant food, packaged drinking water,alcoholic drink, chewing gum, and any substance, including waterused into the food during its manufacture, preparation or treatmentbut does not include any animal feed, live animals unless they areprepared or processed for placing on the market for humanconsumption, plants prior to harvesting, drugs and medicinalproducts, cosmetics, narcotic or psychotropic substances:

14

•FSSAI 2006

15

PH:PIM16

FSSA, 2006

Food Safety and Standards Bill piloted by MOFPI, passed by parliament in Monsoon

session and approved by President in September, 2006

1955 2006

India then and now…….

PFA FSSAI

PH:PIM19

Objectives of FSSA

W

• To consolidate the laws relating to food• To establish food safety and standards authority of India

for laying down science based standards for articles of food.

H• To regulate the manufacture, storage, distribution, sale

and import of food products

Y• To ensure availability of safe and wholesome food for

human consumption

PH:PIM20

Where is the emphasis :

Minimum Effective

Legislation

Legislation should not

restrict competition

Include non regulatory measures

Innovations for Consumer Choice &

Health

Science base legislation

Risk Analysis

Evidential Analysis

Enforcement to enablement

Graded penalties

PH:PIM21

Critical Shifts – PFA to FSSA

Adulteration Safety

Several Authorities Single Authority

Prescriptive Standards General Standards

Inspection /Control Monitoring & Surveillance

PH:PIM22

FSSAI will replace the following acts :

FSSAIThe Prevention

of Food Adulteration

Act, 1954(37 of 1954).

The Fruit Products Order,

1955.

The Meat Food Products Order,

1973,

The Edible Oils Packaging

(Regulation) Order, 1998.

The Vegetable Oil Products

(Control) Order, 1947.

The Milk and Milk Products Order, 1992.

The Solvent Extracted Oil, De oiled Meal,

and Edible Flour (Control)

Order, 1967

Any other order issued under the

Essential Commodities Act, 1955 (10 of 1955). relating to

food.,

FSSAI STRUCTURE

State CommissionersChairman

Scientific Committee Scientific Panel

C E O International / Codex

Program Management

Inspection &Investigation Unit

Surveillance & Compliance

Unit

Laboratory Services

Advisory &Extension Services

CentralAdvisory

Committee

Legal Unit AdministrativeFinance Unit

-Programming

(Annual Reports & Planning)

-Implementation / & LiaisonWith States Advisory

ImportsR & D Trouble

Solutions

Monitoring(States)

Compliance)

ManpowerDevelopment

-Analytical Manuals-Accreditation

-Quality Assurance Prog-Analysts Training

Training & AwarenessAudio visual

Sampling TechniquesTo Regulators / industry including

Microbiological Sampling etc

Budgeting

Food Safety & StandardsAuthority Of India 23 Members

PH:PIM24

Salient features Defines the concept of “substandard”

and “unsafe food”;

emphasizes on the need on risk assessment; not trade restrictive

Provisions relating to functional and novel food

Prescribes graded penalties for offenses/violations

Improvement notices

Legislative Frame

FSSAI 2006

FSS RULES

2011

FSS

REGULATION 2011

FSS Regulations - Chapters

1. General-- Mainly Definitions

2. Licensing and Registration of food business

3. Packaging and Labeling regulations

4. Food Safety and Standards (Food Product and Food Additives)

5. Substances added to food

6. Prohibition and Restriction on sales

7. Contaminants,Toxins and Residues

8. Laboratory and Sample Analysis

Every container in which vanaspati, margarine, bakery shortening,

blended edible vegetable oils, mixed fat spread and refined vegetable

oil is packed shall bear;

The name/ description of the contents, “Free from Argemone oil”

The mass/ volume of the contents

Name and business particulars of the producer

Net weight of the contents in the container

Batch no, Month and Year of Manufacture

Indian Standards institution Certification Mark

Labeling Of Edible Oils And Fats

Important regulations

Food Safety and Standard regulations

2.2 Fats, oils and Fat emulsions1. Oils2. Partially hydrogenated soybean oil3. Edible fats4. Margarine and fat spread5. Hydrogenated Vegetable oils

Relevant Chapters & Clauses1. FOOD SAFETY AND STANDARDS (LICENSING AND REGISTRATION) REGULATIONS, 2011

Licensing and Registration of Food Businesses

2.1 Registration and License for Food Business

2.1.2 License of food business

2.1.3 Application for License

2.1.4 Processing of Application

2.1.5 Procedure for License under certain local areas

2.1.6 Commencement of business

2.1.7 Validity and Renewal of Registration and License

2.1.8 Suspension or cancellation of Registration certificate or License

2.1.9 Modifications, expansions, change in premises after grant of license and registration

2.1.10 Mode of payment

2.1.11 Transfer of Registration certificate or License

2.1.12 Appeal

2.1.13 Return

2.1.14 Food business operator to be bound by Directions or order

SCHEDULES

Schedule 1 List of Business under the purview of Central Licensing Authority

Schedule 2 Forms

Form B - Application for License / Renewal of license under FSSA

Form C - License Format

Form D - 1 Annual Returns to be filed for business

Annexures

Schedule 3 Fee for Grant/ Renewal of License / Registration / License Fees

Schedule 4 Part II - Practices to be followed by all Food Business Operators applying for License

Relevant Chapters & Clauses2. FOOD SAFETY AND STANDARDS (PACKAGING AND LABELING) REGULATIONS, 2011

Packaging and Labeling Regulations

2.1 Packaging

2.1.1 General Requirements

2.1.2 Product specific requirements

2.2 Labeling

2.2.1 General Requirements

2.2.2 Labeling of Pre packaged Foods

2.3 Manner of Declaration

2.3.1 General Conditions

2.3.2 Principal Display Panel

2.3.3 The height of numeral in the declaration

2.4 Specific Requirements/ Restrictions on manner of labeling

2.4.2 Labeling of edible oils and fats

2.5 Restriction on advertisement

2.6 Exemptions from labeling requirements

4. FOOD SAFETY AND STANDARDS (PROHIBITION AND RESTRICTION ON SALES) REGULATIONS, 2011

Prohibition and Regulation of Sales

2.1 Sale of certain admixtures prohibited

2.2 Restriction on sale of Til oil produced in Tripura, Assam and West bengal

2.3 Special provisions relating to Vegetable Oil and fat

Relevant Chapters & Clauses3. FOOD SAFETY AND STANDARDS (FOOD PRODUCT STANDARDS AND FOOD ADDITIVES) REGULATIONS, 2011

2 Food Product Standards

2.2 Fats, oils and fat emulsions

2.2.1 Oils

2.2.2 Interesterified Vegetable Fat

2.2.3 Partially Hydrogenated Soybean Oil

2.2.4 Edible Fats

2.2.5 Margarine and Fat Spreads

2.2.6 Hydrogenated Vegetable Oils

3.1 Substances added to Food

3.1.1. Food Additives

3.1.5 Anti-Oxidants

3.1.7 Anticaking Agents

3.1.8 Antifoaming agents in edible oils and fats

3.1.17 Other substances to be used in Specified limits

3.1.18 Carry over of Food Additive

Appendix A Table 4 List of food additives for use in edible oils and fats

5. FOOD SAFETY AND STANDARDS (CONTAMINANTS, TOXINS AND RESIDUES) REGULATIONS, 2011

Contaminants, Toxins and Residues

2.1 Metal Contaminants

2.2 Crop Contaminants and Naturally Occuring Toxic Substances

2.3 Residues

•Impact on Industry

32

General ImpactAll Big manufacturing facilities will need to be licensed by Central Licensing Authority FSSAI New Delhi

All importers need to take import license from FSSAI.

Small players /warehouses/distributors will need to obtain a valid license from State Licensing Authority

New Products and Proprietary food need pre approval

All the licensed establishments will be subject to periodical inspections and food safety audits by respective licensing authorities

FSMS Plan and Food Recall process

General Impact

oReduction in court cases by adjudication processoAgmark & LM will continue as it is.

oNew Import regulations.

oNew food categorization systems.

oAdditive approval system.

o New section of food categorization : Section 22o Functional food and Nutraceuticalso More scope for product innovation

o New documents of label claims & Claim substantiations.

Food categorization

Food

Standard Food Proprietary Food

Novel Food/organic

food/GM food

Food for specific

nutrition

Health Supplement FSDU

Section 22

Restricted category

Food Business“Food business” means any undertaking, whether for profit or not and

whether public or private, carrying out any of the activities related to

any stage of manufacture, processing, packaging, storage,

transportation, distribution of food, import and includes

food services, catering services, sale of food or food

ingredients;

No Person Shall commence any food business unless he possesses valid

licence/Registration. ( Section 2.1 Licensing and Registration)

Non compliance will attract up to 6 months of Imprisonment and

5lacs of fine.

Licensing and Registration of Food Business

Central Licensing AuthorityState Licensing

AuthorityRegistering Authority

Designated Officerappointed by the ChiefExecutive Officer of theFood Authority of India in his capacity of Food Safety Commissioner

Food Safety Officer or any official in

Panchayats, Municipal Corporation or any

other local body in an area, notified as such

by the State Food Safety Commissioner

for the purpose of registration

Designated Officers appointed under

Section 36(1) of the Act by the Food Safety

Commissioner of a State or UT for the

purpose of licensing and monitoring.

Schedule 4 Requirements

1. Location and Surrounding

2. Layout and Design of Food Establishment Premises

3. Equipment

4. Facilities

5. Food Operations and Control

6. Management and Supervision

7. Food testing Facilities

8. Audit, documentation and Records

9. Sanitation and Maintenance of Establishment Premises

10. Personal Hygiene

11. Product Information and Consumer Awareness

12. Training

1.0 Dairy products and analogues 2.0 Fats and oils, and fat emulsions

3.0 Edible ices, including sorbet4.0 Fruits and vegetables 

5.0 Confectionery 6.0 Cereals and cereal products

6.0 Cereals and cereal products 7.0 Bakery products

8.0 Meat and meat products  9.0 Fish and fish products

10.0 Eggs and egg products 11.0 Sweeteners

12.0 Salts, spices, soups, sauces, salads and protein products

13.0 Foodstuffs intended for particular nutritional uses

14.0 Beverages 15.0 Ready‐to‐eat Savories

16.0 Prepared Foods 17.0 Others

17 Food Categories

Proprietary Food Product Approval System

• NOC and Then Approval

• NOC and then approval

• No Approval

• Safety Study and then approval

Novel Produ

ct

Traditional

ProductNon

traditional but safe in

the Market

New to India but

proven outside

370 standard foodIn market more than 10000 food products

Food Product Approval SystemNew product/ingredient approval procedure

ProcessApplicant must apply to Director (PA) in prescribed forminitial screening of the application by the “Approval Screening Committee” Screening process place application under category A or category BCategory A – approval/rejection will happen basis the information furnishedCategory B – products that require further assessment in respect of safety etc. ; will be assessed by the scientific panel/expert group and thereafter scientific committee

ImpactProduct/ingredient approval is a time consuming processProduct launch timelines may be affectedStrong support in terms of research and science will be required

Review of standard process

1. Receiving suggestions -2. Examination of suggestions by SRC-02 months 3. Report of the specially constituted expert committees as per

requirement - 02 months 4. Consideration by Scientific Panel - 02 months 5. Consideration by Scientific Committee - 02 months 6. Consideration by Food Authority - 2 months 7. Approval by the Government and draft notification - 02 months 8. Time given for receiving public comments and notification to WTO,

SPS/TPT etc - 02 months 9. Disposal of comments and finalising the draft - 03 months 10. Approval of the Government and final notification - 02 months

20 Months

Compliance and Penalties

43

Justice Dispensation System under the Act

ADJUDICATING COURTS

For Misbranding and sub standard food

For unsafe Food

FineFine with

Punishment

Fine and Penalties

Penalty for substandard food Rs 5 lacs

Penalty for misbranded food Rs 3 lacs

Penalty on misleading advertisement Rs 10  lacs

Food containing extraneous matter Rs 1 lac

Penalty for failure to comply with food safety officer

Rs 2 lacs

Penalty for unhygienic processing of food Rs 1 lacs

Punishment for unsafe food/Not having valid license

six months to 10 yrs of imprisonment

What we must do

Actionable

Study Import regulations and give feedback

Convert/Obtain a valid license from Central/State licensing authority

for all the manufacturing facilities and

warehouses/distributors/Retailors

Ensure compliance with all the conditions of license & Schedule 4

requirements at all times

FSMS Plan or Certification.

ActionableFile the nominations with the Licensing Authorities in

Form IX for all units/branches

Technical person needed as a supervisor in production

Water analysis /Testing of contaminants in to be done

once in six months

Proprietary food product approval if require.

Safety study from recognized institutes

Actionable

Business to be performed with only licensed/registered

vendors

Monitoring/Surveillance/Improvement notices

Product recall/traceability procedure compulsory

Internal audit/assessment on regular basis

Apply for specification changes

Put license number on label ( replace the EOP/VOP

Number)

ActionableFBO License for what Central/State

Head office Import /Rellebeller/Marketer Central

Manufacturing units Manufacturing and storing As per capacity

2P/3P Repacker /manufacture As per capacity

Company Depots Storage Central/State

C&FA Storage State

Distributors Wholesale trade State

Transporters Transportation State

Retailer Retailing State

Eligibility Criteria for LicensingCentral Licensing State Licensing Registration

Units processing & producing vegetable oil

by the process of solvent extraction and refineries including oil

expeller unit

More than 2 MT per day Up to 2 MT per day and turnover above

12 lakh

Less than 12 lakh

For FBOs operating in two or more states-

Storage capacity Capacity more than 50,000 MT

Capacity upto 50,000 MT

Packer/Repacker Turnover greater than 20 crores

Turnover upto 20 crores

Relabeller Turnover greater than 20 crores

Turnover upto 20 crores

Marketer Turnover greater than 20 crores

Turnover upto 20 crores

Transporterstransporting edible oil

Having more than 100 vehicles or turnover more

than 30 crores

Having upto 100 vehicles or turnover

upto 30 crores

Important AdvisoriesLicensing Documents : 14:05:2012Product approval – Dated 02.05.2012Advisory with regards to FSMS Plan : Dated 11.04.2012HS Code Advisory : Dated 10:04.2012Advisory on Licensing : Dated 25.01.2012Advisory/Clarification regarding expiry of licenses : Dated 10:01:2012Advisory dated 03:10:2011Advisory dated :3rd June 2012

• AV in crude Palm oil – Limit is 10

• Technical qualified person

• Unsap value for blended oil

• Acid value procedure for RBO based oil

• Acid value limit for refined oil /Palm oil

• FSMS certificate

Issues

ISSUESDefinition of Vanaspati needs to be changed in view of the changes being proposed to produce low TFA products

Clause of H2 generating facility in Hydrogenated vegetable oil–2.2.6(vi) needs to be deleted/modified

Palm stearine to be included in the list of edible oils & specs defined

Statutory labelling of sentence “ hydrogenated oil/fat used contains trans “ needs to be removed

To promote healthy/nutritional oil mix production definition of blended oil to be changed at the earliest.

ISSUES

Specification for Crude Oils to be included in FSSAI regulations ( which was part of SEODMO 1967)

Skilled manpower and their regular training to facilitate accurate testing / interpretation of results in case of advanced testing like TFA etc by GLC.

Properietary product approval system – Expensive/Time consuming and not required

Delay in grant of licenses

Should I need license to produce Eggs?

Way Forward

We need Support and Nurturing

WHAT WE NEED

Procedures ( Path) should be very clear

WHAT WE NEED

Positive participation with authority for Regulation Making

WHAT WE NEED

Consumer safety is priority

WHAT WE NEED

No blind copy from west

WHAT WE NEED

NO OVER LOADING OF REQUIREMENTS

WHAT WE NEED

HOPES OF GOOD TOMORROW

Thank You Any Query…Prabodhh@maricoindia.net…

9820278746