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Food Safety Modernization Act : The Breakdown (Part 3 – The Next Steps) 3/24/2011

Food Safety Modernization Act - FDAManufacturers and importers must move forward with this information and start making decisions.

What Next?:

-Any real certifications will most likely not happen for at least 12 months or more… “Implementing this law will require over a dozen separate rulemakings and at least 10 guidance documents. The implementation of the legislation will take more than three years.” Source

-Importers will be in the process of setting up their verification system, but the exact rules and requirements of certification are in progress.

-Businesses in the food industry are urged to start thinking about what this means for them and begin preparing for more strict inspections and regulations.

Q: Why do I need to act now if it will take the FDA a few years to write any new rules?

A: Reviewing your company’s food-safety, record-keeping and product-tracking procedures can lead to performance improvements and innovation. By being in the forefront of efforts to improve food safety and providing credible information to regulators and consumers, companies can not only get a leg up on the competition, but begin marketing their food safety practices to the public.

Within one and a half years, all registered facilities will be required to conduct a hazard analysis, implement preventive controls and develop a food safety plan to document the monitoring, correction, and verification of preventive controls. The food safety plan and all related documents must be made available to FDA during inspections. As part of its food safety plan, a facility may be required to document sanitation procedures, a recall plan, a food allergen control program, supplier verification activities, and environmental sampling testing. Plans such as these take time to create and implement; it is never too early to be safe.

In preparation for the FDA audits, our partner company FactoryAudits.com offers comprehensive Food Safety Assessments that analyze your facilities’ HACCP plan implementation, chemical control processes, pest control processes, sanitation risks and hazards and much more.

Keep checking back with us as we will continue to post about the progression of this Act.

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Food Safety Modernization Act : The Breakdown (Part 2 – The Impact) 3/24/2011

Did you miss Part One?… Food Safety Modernization Act: The Breakdown (Part 1 – The Facts)

Now that we have the background of the law covered, let’s dive into what this means to us and how it can impact our food sources and supply chains.

How will this law make imported food safer?

New authorities under the Act include:

  • Importer Accountability Importers must verify that their foreign suppliers have adequate preventive controls in place to ensure safety.
  • Third Party Certification – The FDA will be able to accredit qualified third party auditors to certify that foreign food facilities are complying with US food safety standards. In preparation for the FDA audits, our partner company FactoryAudits.com offers comprehensive Food Safety Assessments that analyze your facilities’ HACCP plan implementation, chemical control processes, pest control processes, sanitation risks and hazards and much more.
  • High Risk Foods – The FDA now has the authority to require that high-risk imported foods be accompanied by a credible third-party certification as a condition of admission into this country .
  • Additional resources – Foreign inspections will receive additional resources to complete necessary inspections.
  • Food Refusals The FDA now has the authority to refuse entry into the US of a food that has refused or failed U.S. inspection.

What is required to become a certified facility?

  • The FDA is in the process of developing a proposed rule that will establish science-based minimum standards for the safe production and harvesting of fruits and vegetables and will address soil amendments, worker health and hygiene, packaging, temperature controls, water, and other issues.
  • Food facilities will be required to implement a written preventive control plan, provide for the monitoring of the performance of those controls, and specify the corrective actions the facility will take when necessary. Don’t get caught unprepared: these seafood processors were not following the food safety rules and now they are warned and red flagged to clean up their act.

The time line is dated from the date of the enactment (January 2011). The following items are to be completed by the FDA no later than the corresponding times. (According to the law at this point in time.)

FSMA Timeline

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Food Safety Modernization Act : The Breakdown (Part 1 – The Facts) 3/24/2011

food safety modernization actAs the Food Safety Modernization Act starts working its way through the implementation process, I thought it would be most helpful to post a breakdown of the act and what it means to importers and manufacturers of consumable products. As you will see, the Act is very new, but will definitely have a large impact on the regulations of the food industry and hence, the level of  security in our food safety system. Read on for more details.

Note: There are two more parts in this series to come!

S. 510 FDA – Food Safety Modernization Act (FSMA)

Background

  • U.S. consumers enjoy imported foods from more than 150 countries.
  • Previous food safety laws did not provide the FDA with necessary funding/staffing to properly regulate and inspect America’s food supply.
    -Less than two percent of all imported food was inspected in 2010. The latest food safety scare in China involves tainted pork, read the article here.
    -Approximately 600 foreign food facilities were inspected in 2010.
  • The U.S. Centers for Disease Control and Prevention estimate that there are approximately 76 million foodborne illnesses each year in the U.S.
    -Those illnesses cause more than 300,000 hospitalizations and 5,000 deaths annually.
    -Those illnesses also cost the country $152 billion annually.

The Approval of the New FSMA Law: December 2010

  • The 2010 Food Safety Modernization Act passed the Senate and the House last winter and was signed into law by President Obama on December 22, 2010.
  • The new law is considered the biggest change in food safety oversight in 70 years.
  • The two main outcomes of the law are as follows:
    1. The FDA will be allowed to force companies to issue recalls when they suspect food may be contaminated. (Activated Now)
    2. The law greatly increases the FDA’s ability to perform inspections on both foreign and domestic manufacturing facilities.

Food Safety Modernization Act Overview

What are the 5 major elements of the law?

  1. Preventive controls- For the first time, the FDA has a legislative mandate to require comprehensive, prevention-based controls across the food supply.
  2. Inspection and Compliance- The law specifies how often FDA should inspect food producers.  FDA is committed to applying its inspection resources in a risk-based manner and adopting innovative inspection approaches.
  3. Imported Food Safety- For the first time, importers must verify that their foreign suppliers have adequate preventive controls in place to ensure safety, and FDA will be able to accredit qualified third party auditors to certify that foreign food facilities are complying with U.S. food safety standards.
  4. Response- For the first time, the FDA will have mandatory recall authority for all food products.  FDA expects that it will only need to invoke this authority infrequently since the food industry largely honors the requests for voluntary recalls.
  5. Enhanced Partnerships- The legislation recognizes the importance of strengthening existing collaboration among all food safety agencies—U.S. federal, state, local, territorial, tribal and foreign–to achieve our public health goals.

FSMA By the Numbers

Cost: $1.4 Billion – over next 4 years

Necessary Staffing: Over the next 4 years, the FDA will be hiring 2,000 new inspectors.

Inspection Schedule: The bill requires the inspection of 50,000 foreign and domestic food production facilities by 2015.

  • Inspections are to be completed by either the FDA or state, federal or local agencies acting on the FDA’s behalf.
  • Projected Foreign Facility Inspection Breakdown by Year:
    2011
    : 600 inspections
    2012
    : 1200 inspections
    2013
    : 2400 inspections
    2014
    : 4800 inspections
    2015
    : 9600 inspections

For your reference, you can read the full text of the act here.

Read part two of the series: Food Safety Modernization Act: The Breakdown (Part 2 – The Impact)

and part 3 of the series: Food Safety Modernization Act: The Breakdown (Part 3 – The Next Steps)

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Spring Canton Fair Update 3/17/2011

Canton Fair - SpringIf you are planning on attending the 109th Canton Fair this Spring in Guangzhou, make sure to check out this great little guide I found on their website with all of the dates and information necessary to navigate your way through the huge expo grounds.

It has information on a lot of things like travel and hotels, but also has information on how to attend the fair. You have to get an e-invite and that can be done easily on their website through their BEST tool or Buyer E-Service Tool.

Phase 1: April 15-19, 2011 from 9:30-18:00
Phase 2: April 23-27, 2011 from 9:30-18:00
Phase 3: May 1-5, 2011 from 9:30-18:00

For a better run down of all the activities and a video, see our earlier blog post 2011 Spring Canton Fair Dates & Information.

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Vietnam & India Sourcing: Advantages and Disadvantages 3/2/2011

China India Flags

So you are already sourcing from China…have you ever thought of sourcing from India? What about Vietnam? Are buyers trending away from China? What are the advantages and disadvantages of sourcing from other developing countries like these? Let’s explore!

A survey was recently released by Global Sources reporting on how China’s increasing labor costs and the fluctuation of the yuan have impacted buyers’ sourcing strategies overseas.

Over 380 buyers were surveyed and more than 50 percent of respondents said they have seen higher prices as a result of the yuan’s appreciation. But are they changing their strategy? The answer is yes… somewhat.  More than 50 percent of buyers say they are planning to step up their sourcing from India and Vietnam sometime in the future. (It did not indicate whether or not they plan to decrease their China sourcing however.)

The truth is: Vietnam and India are becoming increasingly attractive for foreign enterprises due to their low-cost and abundant labor supply.

What does this mean to American companies?

Places like Vietnam and India could be a viable option for your company if you specialize in low-end products. Industries that are labor intensive can also be successful in these countries due to the large labor pool (bigger than China’s) and the low cost of labor. Industries like textiles (clothes, shoes, sheets etc) have been successful at increasing savings by moving production to countries like India where the workforce is robust and there is a large percentage of English speaking workers (20% higher than China’s workforce). Also, India’s income tax will decrease this year in order to be more competitive with China.

Although the numbers do indicate an uptick in sourcing from these developing countries, do be forewarned: This is not the ideal plan for everybody. India and Vietnam are still in their youth, and fall short in a number of critical manufacturing areas in comparison to the United States and China. The traditional means to becoming a manufacturing powerhouse no longer stand alone. Not only will a country need to be strong in labor, energy and materials, but the country will also need to have a strong-willed work force with innovative thinkers.

Another critical aspect that must be taken into consideration is the different countries’ logistics infrastructure.  The logistics infrastructure in China for example is much more developed and sophisticated than in India or Vietnam.  We typically find that sourcing from China is much more efficient because of the hundreds of billions of dollars invested over the last 20 years in roads, highways, ports and airports.  With that being said, if quick turn-around and reliable, timely shipping and receiving are a must for your business, China might be a better choice.

China India Vietnam
Total Airports 502 352 44
Major Ports 130 12 14
Railways 77,834 km 64,015 km 2,347 km
Roadways 3,583,715 km 3,320,410 km 171,392 km

It is to be noted however, that although India has the third largest road network in the world, about 2.6 million km or almost 75 percent of their roads are considered rural. Travel by roadway in India is also often times considered dangerous; people do not abide by traffic laws, roads are bumpy and uncared for and traffic is intensely crowded. In fact, the National Highway make up only 2% of the nation’s roadway length, but handles about 40 percent of the roadway traffic.

Beyond logistics, the 2nd most common issue when looking beyond China is your raw material supply chain.  As nearly every major industry’s supply chain has shifted to China over the last 20 years, so have the raw materials companies/suppliers.  When evaluating a move away from China, it’s important to understand whether or not your source of raw material is available in your next destination.  If you don’t, you very well may end up finding out that while you are benefiting from cheaper labor elsewhere, you are offsetting those savings by your increased logistics and duties costs as you ship your raw materials in from China.

China also excels at supporting large-scale investment projects – something that Vietnam and India struggle with due to their infancy in the manufacturing arena as well as the large government bureaucracies that you must deal with.  If a company wanted to expand and build a new facility to ramp up production in China, it could take 6 months, whereas in India it could take 2 to 3 years.

In conclusion, China is still the manufacturing powerhouse for most, and will remain so for quite a few years to come.  However, we are likely to see a shift in the type of manufacturing China is involved in. They are now encouraging investments in high tech industries and research and development enterprises. Their goals is to move towards a more sophisticated manufacturing region that can garner higher wages and eventually propel more and more people into the coveted middle and upper classes.

We would love to hear how your company’s overseas buying strategy has changed (or hasn’t changed)!

Sources:

http://www.globalsources.com
http://www.2point6billion.com/news/2011/02/17/china-india-compared-by-al-jazeera-8606.html
https://www.cia.gov/library/publications/the-world-factbook/geos/in.html
http://online.wsj.com/article/SB10001424052748703800204576159410421853214.htmlhttp://www.business-in-asia.com/ports_in_vietnam.html
http://understand-china.com/?manufacturing=logistics-4

http://indiatoday.intoday.in/site/Story/110495/Cover%20Story/wealth-does-not-create-roads-rather,-roads-create-wealth.html

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When is Chinese New Year 2012? 3/1/2011

chinese new year 2012The start of the 2012 Chinese New Year is January 23, 2012. The celebration typically begins on New Year’s Eve with a large party in which family members that have moved away return home to celebrate with traditional food, games and story-telling. The festivities last two weeks and end on the 15th day with the Lantern Festival.

The traditional Chinese Calendar is based on lunar activity and is always the first day of the first lunar month. Because it is based on the moon’s activity, it typically falls on a different day every year.

A good rule of thumb for determining when the next Chinese New Year will fall, is to find the second new moon after the winter solstice. Winter solstice is the shortest day of the year and always falls on December 21. The second new moon after that will mark the next Chinese New Year.

This next Year, 2012, is the year of the Dragon. The traditional Chinese zodiac is comprised of a 12 year cycle of 12 different animals related to the Chinese Calendar. People born during the year of the Dragon are said to be brave, honest and trustworthy. The last year of the dragon was 2000.

Want to learn more about the history of the Chinese New Year? View our previous Chinese New Year post with more about how to celebrate and where to go!

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