China Food Scandals
A crisis in confidence in China's food industry emerged after melamine was found in domestically produced baby formula in 2008. The scandal sickened 300,000 babies and resulted in six premature deaths. Other stories of fake eggs, diseased pork, recycled oil, mislabelled meat and more have only led to more calls for industry reform.
Food safety must be a priority for government and companies
Food safety remains an abiding concern on the mainland. With lax regulation and quality control stretched by growth in consumption, it was a question of when, not if, the country's image would be tarnished by another scandal. Multinational fast-food chains have been caught up again in a rotten-meat scandal exposed in an undercover report by Dragon TV at a Shanghai factory. Authorities are investigating 22 restaurants and food distributors and have shut Husi Food, owned by a US-based firm, during a probe of claims it had falsified expiry dates on meat products. The affected chains - including McDonald's and Pizza Hut - have all said none of their Hong Kong outlets used meat from the factory. But the city's Centre for Food Safety is investigating the import of products from a plant in Hebei province run by Husi.
Given that so many food lines have been tainted by scandal on the mainland, it is no wonder Chinese joke that nothing is safe to eat. Never a truer word was spoken in jest. Multinationals, in particular, were assumed to have rigorous quality control to protect their brands, giving them a marketing edge. If consumers cannot rely on that, where do they put their trust?
The affair smacks of a race to the bottom on price amid keen competition, in which suppliers face tight margins. The consumer stands to benefit, but only if buyers verify quality control, and don't rely on assurances from third parties.
It is first and foremost a public health and safety issue rather than one of mainland consumers being corruptly exploited for gain, as is alleged for example in the pharmaceutical industry. If the companies have been complacent about safety or failed in their duty to consumers, someone must be held accountable. That said, food scandals are not confined to the mainland. Only last year the discovery of horsemeat in products sold in Europe and labelled as containing beef resulted in a finding in a British parliamentary report that consumers had been "cynically and systematically duped" for profit.
The main lesson for foreign firms from food scandals involving unscrupulous suppliers and business people on the mainland is the importance of quality control, firstly for the sake of the consumer but also their own brands and reputation.
Beijing must also press on with consolidation of its food and drug regime to eliminate overlapping and red tape that is all too often part of the problem rather than the solution.