Front-of-pack labelling norms will affect MSMEs if enacted, says industry

Ease of Doing Business for MSMEs: Trade association and sellers body, Indian Sellers Collective on Wednesday opposed a proposal by the government’s food licensing body, Food Safety and Standards Authority of India’s (FSSAI) on Front of Pack Nutrition Labelling (FOPNL) regulation of putting star ratings on food items based on their nutrient composition, as per a report by Mint.

Under the proposed regulation, packaged food and beverages will be given star ratings like ‘one-star food’, ‘two-star food’, and therefore ‘good-food’, ‘not-good food’, etc. on the basis of their salt, sugar, and fat content.

FSSAI has published a draft notification on front-of-pack labeling in a bid to regulate the unhealth ingredients used for packaged food products.

“The representative body has claimed that FOPNL will lead to ethnic Indian foods being classified as unhealthy, cause severe loss of business to MSMEs (micro, small and medium enterprises) packaged food manufacturers and sellers and open the floodgates for western packaged food to capture the Indian markets,” the association said in a statement.

Traditional Indian snacks have salt, sugar and fat for scientific and customary reasons and the regulation will classify them unhealthy as per the proposed parameters, the report said. This may lead to consumers rejecting these traditional food items, said the industry association.

Bhujiya, Dhokla, Murukku, Gulab Jamun, Ras Malai, Barfi, nimbu pani, lassi are some of the common packaged foods and beverages produced by the traditional snack makers.

The sellers’ collective also said that the regulation may favour multinational food companies as they will be able to modify the nutrient composition of their food products to secure a better health star rating. Such companies could add nuts and fruits to their existing product to gain favourable ratings in their food items as well as beverages.

Dhairyashil Patil, President, All India Consumer Products Distributors Federation (AICPDF), said “Large distributors and big retail who are thriving through collaborations with MNCs and large food companies will continue to sell the reconstituted, western packaged foods in India, as adoption of FONPL will go on to destroy the market for traditional Indian packaged foods. However, the millions of small, independent sellers who largely depend on MSME manufacturers and packaged traditional Indian snacks to earn their livelihoods, will have no recourse, thereby threatening their very survival.”

AICPDF is an industry body that represents dealers and distributors of fast-moving consumer goods companies.

FSSAI’s notification also gives a list of solid foods and beverages which will be exempted from FOPNL norms.

Referring to the exemption list, Indian Sellers Collective said that the list disregards Indian origin food product categories and instead pushes western products which are high on sugar, salt and fat.

According to industry estimates, India’s food processing industry accounts for 32 per cent of the country’s total food market. As a matter of fact, almost 79 per cent of the processed food market is dominated by the MSME players and is concentrated in tier II and tier III towns of the country. For these regions, the FOPNL regulation could put the existence of small manufacturers in threat, if enacted.