Food business enterprises often believe that any regulatory measures can be taken against their enterprises only post-inspection or investigation. Yet, in the current scenario of the regulatory environment, even a single consumer complaint is capable of triggering such actions as inspections, lab tests, confiscation of stocks, and legal proceedings.
The latest case of enforcement by food safety authorities highlights the importance of compliance for any food business and emphasizes that it involves more than just acquiring an FSSAI license. Here, authorities have seized food stocks worth about ₹31.61 lakh due to various compliance issues discovered during inspection and lab tests.
Though the business entity involved here is not important, the lessons learned from this case are crucial for all food producers, importers, marketers, and startups operating in India.
What lessons we learn is that non-compliance issues that seem to be minor may lead to considerable consequences if found by authorities.
How Did the Regulatory Action Begin?
The enforcement was reportedly initiated after a consumer complaint raised on the official food safety complaints portal.
It involved a complaint related to the quality of the product in question as well as the inability of the business to solve consumer problems.
Here is an important point for contemporary food businesses:
Customer complaints are no longer simply customer service problems—they can become regulatory problems.
What Was Found by Inspectors
According to the report, there were several major findings during the inspection and follow-up audit.
First of all, it includes:
Missing Product Information That Must Be Provided
The information about the product that must be available on the label was incomplete.
When some information is not provided, consumers cannot make proper purchasing decisions, and thus, the product might be labelled as misbranded.
Inadequate Ingredient Information
It is necessary for consumers to know what ingredients are contained in their food products.
Lack of information in this regard raises the issues of transparency and consumer rights.
Poor Product Quality
There were visible abnormalities found in the product by inspecting officials. Whenever inspectors see something abnormal, strange appearance, sediments, change in color or presence of foreign objects, they ask for thorough analysis.
Misleading Product Information
The regulators pointed to the discrepancy in the product information contained in different areas of the package. All contradictions in product information are misleading in nature from consumer rights point of view.
Most Serious Finding: Use of an Unpermitted Substance
The situation took on a much more serious aspect upon testing at the lab.
There were reportedly reports about the existence of substances that were not allowed according to the relevant regulations for the particular category of food products.
Moreover, the substance was reportedly introduced during the manufacturing process rather than being naturally present in the original product.
Many businesses involved in food processing wrongly believe that if a substance is natural or even commercially available, it may be incorporated into the food product.
In reality, food businesses have to make sure that all the ingredients, additives, minerals, extracts, and other substances used for processing are specifically permitted for use for the particular type of food product.
Failure to properly verify legality of the ingredients prior to launching the product will result in enforcement actions by regulators.
Why Seize Products Worth ₹31.61 Lakh?
Contrary to popular opinion, enforcement actions are seldom based on one single factor.
Food regulators typically look at overall compliance record of the product and the business.
In this particular situation, the violations included:
- Consumer grievance issues
- Package defects
- Lack of declarations
- Quality observations related to the product
- Mismatch between product information
- Existence of unpermitted substance
In situations where multiple compliance lapses happen, it is determined that the product cannot stay in the market until all regulatory issues have been sorted out.
This led to the seizure of the stock worth approximately ₹31.61 lakh.
For most companies, indirect costs are actually higher than the amount of the seized inventory.
They include:
- Disruption of business
- Product withdrawal costs
- Legal fees
- Repackaging costs
- Loss of distributors' trust
- Tarnishing brand reputation
- Loss of consumers' trust
Many companies put effort into:
- Developing the products
- Designing their packaging
- Selling marketing campaigns
- Erecting distribution systems
But they often miss out on one important component:
Regulatory Readiness
Regulatory readiness is the ability to prove compliance anytime and anywhere.
A company should be able to provide:
- Specifications of its products
- Approvals for each ingredient
- Laboratory results
- Quality assurance records
- Manufacturing data
- Consumer complaint history
- Corrective actions performed
Failure to provide such information will result in serious consequences.
Management of Customer Complaints Is Also a Part of the Compliance Framework
One of the major learnings from this case study is that customer complaints should be treated as a matter of compliance.
For food companies, the following should be done:
- SOPs for handling complaints
- Procedure for escalation
- Process for investigation
- Time schedule for handling complaints
- Closure procedure
A well-handled complaint would probably not reach a regulator.
But, if ignored, the business might face inspections.
Compliance Goes Beyond Licensing
Acquisition of an FSSAI license is just the start of the compliance process.
A company needs to regularly assess:
Product Compliance
- Are the ingredients used allowed?
- Are the product formulation and processing compliant?
- Are claims properly supported?
Manufacturing Compliance
- Are controls working effectively?
- Are records properly kept?
Consumer Protection Compliance
- Are complaints handled effectively?
- Is customer communication transparent?
Regulatory Compliance
- Are products robust to regulation?
Food Business Lessons
There are some key lessons for food businesses:
- Lesson 1: All consumer complaints require careful consideration.
- Lesson 2: Testing products can help identify problems that are difficult to detect during regular business operation.
- Lesson 3: Each individual component used needs to be independently reviewed to confirm its legality.
- Lesson 4: Documentation becomes an equally important component as the product itself.
- Lesson 5: Numerous minor breaches can add up and lead to significant enforcement action.
- Lesson 6: Prevention is considerably less costly than correction.
Conclusion
In summary, food regulation in India is moving towards becoming increasingly consumer-based, technology-driven, and enforcing.
Consumer complaints alone will now trigger inspection, laboratory analysis, product assessment, and further enforcement actions.
The most recent case of seizure of products worth approximately ₹31.61 lakh clearly shows that compliance problems seldom arise from one single factor. On the contrary, they usually result from numerous breaches which occur concurrently.
What we can learn is quite obvious.
Compliance goes beyond licensing and includes, amongst other things, constant monitoring of product formulation, and legal use of ingredients, proper handling of consumer inquiries, documentation, quality assurance system, and grievances management.
Firms that cultivate a culture of compliance are not only better prepared for inspections but also have more chances of earning consumers' trust.
How Piplbyte Can Help?
The following are some of the services provided by Piplbyte to support food companies:
- Consulting on FSSAI Compliance
- Review of Ingredients/Formulae
- Assessment of Product Claims
- Food Regulatory Auditing
- Review of Packaging/Compliance
- Creation of an Internal Compliance System
- Systems for Handling Consumer Complaints
- Regulatory Risk Assessments
Our aim is straightforward: to find potential risks before regulatory action is taken. Book your consultation with experts from PiplByte and stay compliant.