Weekly Comment

Ingredients for cheap?

Related tags Supply chain Food

As recent incidents of food contamination demonstrate, the cheapest
source for ingredients may not turn out to be so cheap after all.

Two such incidents - one involving contaminated pet and human foods, the other a shipment of illegal genetically modified (GM) rice to Europe - highlighted problems with sourcing ingredients from China.

While the ingredients may have seemed cheap to processors at the time, they ended up costing a lot in terms of the subsequent withdrawals, the loss of consumer confidence in brands, increased regulatory scrutiny, and the effort it took some companies to search for alternate sources.

Contaminated ingredients from a variety of countries, including China, have made their way through borders in the past (think Iranian pistachios for example).

However, the increasing focus of food regulators on stopping unsafe products at the borders will surely catch more companies out.

All of a sudden ingredient price is being trumped by food safety and quality concerns.

Probably the best example is the incident in the US last month with wheat gluten products imported from China for use by the pet food industry.

The ingredients were found to have been contaminated with the banned chemical melamine and were blamed for the deaths of hundreds of dogs and cats.

Then regulators discovered last week that the pet products had also been fed to a herd of hogs and three million broiler chickens, leading to regulatory fears of the further spread of the contamination to the human food chain.

The Food and Drug Administration subsequently give its inspectors the power to detain without inspection all vegetable protein imports from China for use as animal or human foods if they suspected the products might contain the chemical.

In an import alert guidance, the FDA singled out a number of wheat, rice, corn, soy and mung bean imports from China for regulatory attention.

Any increase in detention rates could mean processors will find their ingredient imports from China are not available when they need them, or worse they will have to pay to store and then send them back.

But would any processor currently dare to continue depending on China for a source, with the fear that they could themselves fall prey to further contamination incidents?

China has since banned its food exporters from using melamine.

As an emerging powerhouse supplier to the world, the country will surely have to ensure its products are not just cheap, but also meet standards set by other countries.

Unfortunately for the country, one or more of its exporters also caused a problem in Europe last week.

The UK reported that unauthorised genetically modified rice intended for animal feed had entered the market from China via the Netherlands.

The alert was sparked off after regulators found that an unapproved GM line had been found in rice protein concentrate imported to Cyprus from China via the Netherlands.

Businesses in Belgium, Greece, the Netherlands, Poland and Spain were also named as receiving consignments of the rice protein concentrate.

While such contamination incidents initially dealt with pets and animal feed, they highlight the potential for disaster in the human food supply chain.

The recent problems highlight the need for better traceability and food safety controls along a processor's supply chain.

The supply chain manager with his eye on the ball probably has such proceedures in place already.

But as the recent incidents demonstrate, many still do not.

Ahmed ElAmin is editor of FoodProductionDaily.com.

He is a business journalist who specialises in development issues, food, wine, technology, international business and offshore finance.

To comment on this article please e-mail ahmed.elamin@decisionnews.com.

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