No escaping farm-to-table issues in trade with China
Kiwi food exporters need to get serious about the ‘T’ word: traceability, writes Peter Stevens.
OPINION: Food quality and food safety are huge concerns in China. New Zealand businesses must share those concerns if they are to continue growing the volume and value of their food and beverages sold to the increasingly affluent Chinese public.
We might think New Zealand milk products, meat, wine, honey and so on are world-leading on quality and safety. But what actually matters is our capacity for maintaining and protecting the quality and safety of every shipment to China.
In short, New Zealand producers and exporters need to get really serious about the ‘‘T’’ word. Traceability in its fullest sense is the capacity to track and trace every batch of a product (and perhaps every item in the batch) for rapid recall if needed, and to provide discerning consumers with all the answers about the product when it is on offer to them.
Food safety has long been a huge issue in China, fuelled by repeated instances of food contamination, fraudulent labelling and regulatory incompetence or corruption. In the Pew Research Centre’s 2016 survey of Chinese public opinion, 40 per cent of respondents said the safety of food was ‘‘a very big problem’’.
That is reflected in Beijing’s new Food Safety Act, under implementation since October 2015. This law puts much greater responsibility on producers and supply chains, consistent with China becoming a more consumeroriented market and more open to a multitude of foreign suppliers.
The biggest New Zealand exporters to China are, of course, acutely aware of public sentiment there. The dairy industry in particular has come a long way since the 2008 melamine milk contamination crisis, in which Fonterra’s then-partner Sanlu was implicated.
These days New Zealand dairy plants producing infant formula for the Chinese market are subject to regular inspection by officials the China Certification and Inspection Group (CCIG), and the brands open to importation are tightly restricted.
Similar registration and monitoring applies to more than 100 New Zealand meat processing and cool storage sites, and the CCIG has indicated the same for this country’s suppliers of wine and honey from mid-2017 onwards.
Such regulation (in partnership with New Zealand government agencies) amounts to site-specific traceability. Officials have direct visibility at the key processing stage. But what of the whole supply chain, of the production in lower-risk product categories, and of Chinese consumers’ rising demand for information?
Here, China is showing it will increasingly rely on international standards and systems.
Fonterra has grabbed the lead among Kiwi exporters, confirming in December its plans for whole-ofsupply-chain traceability on all products by 2020. The dairy giant is building capacity to track and trace ingredients and products, between the farms that supply milk and the retailers who sell Fonterra products.
China is the major impetus after 2013’s whey protein concentrate contamination scare, which temporarily threw New Zealand milk powder exports into turmoil. The incident was a false alarm but it did highlight deficiencies in Fonterra’s traceability processes at the time.
The company will now have electronic data processes based on the ‘‘one up, one down’’ principle: Each business site and business partner in the supply chain will record and hold relevant information on the ingredients and products it receives, processes and stores, and on the other sites and partners to whom it sends those ingredients or products.
Fonterra will have the capacity to identify and isolate any product of concern within three hours (not the five days required in 2013).
Traceability of this scale and complexity requires data collected, stored and shared to global GS1 standards as now used by businesses and governments in more than 150 countries.
Global standards have become the common language required by supply chain participants across the world. Fonterra was quick to recognise this after 2013 and its programme will show the way for New Zealand’s other global food and beverage producers.
In China, Alibaba Group has also come to the same recognition. Alibaba has recently adopted GS1 standards in its dealing with suppliers worldwide: They are asked to use the standards for all product identification and information management in order to access and use Alibaba’s online retail and other trading platforms.
At last count, Alibaba had 435 million active buyers. The use of global data standards will make it much easier for them to find products on Alibaba’s online stores and to access information on them (including access via smartphone apps).
For New Zealand businesses supplying China, the traceability stakes are high and rising.
For those with China and the ‘‘T’’ word increasingly on their minds, the Fonterra example and Alibaba’s data invitation are signposts to a bright future.
❚ Dr Peter Stevens is the chief executive of GS1 New Zealand.