Food Laws

CENTRAL EXCISE DUTY ON BISCUITS
In the Union Budget 2000-01, the Finance Minister who had imposed a 100% increase in the rate of Excise Duty on biscuit from 8% as a part of the rationalisation of CENVAT and introduction of single rate of Duty did not offer any concesison on the Budget for 2001-02. On the other hand the 50% exemption to small packs was withdrawn. During these years and in 2002, the Federation submitted strong representations to the Union Finance

Minister seeking relief in the Excise Duty on biscuits, giving biscuit special treatment that it deserves on account of the exceptional nature and sensitivity to price increase.

The Federation submitted its Pre- Budget Memorandum for 2002 demanding at least 50% Excise Relief.

It is a matter of great satisfaction that the Govt. has, after 3 years, acceded to our demand and grated reduction in Excise Duty (from 16% to 18%) in the Union Budget for 2003-2004.

INTEGRATION OF VARIOUS FOOD LAWS
The Food Processing Industry have been experiencing the adverse affect of multiplicity of various Acts/ Rules and Regulations for food standards under the Prevention of Food Adulteration Act Standards of Weights & Measures Act, Food Products Order, the Meat Products Order, the Bureau of Indian Standards & MMPO, etc. affected the Food & Food Processing Sectors. They need to be modernised & converged.

As a consequence of various representations of industry, the Govt. of India has decided to set up a Group of Ministers (GOM) to propose legislation and other changes for preparing a Modem Integrated Food Law and related regulations. The Ministry of State for Food Processing Industries is the Nodal Ministry to coordinate the bill.

Our federation submitted its recommendations and suggested to placed before the Group of Ministers, covering the broad frame work required for the food legislation as well as specific issues such as:
- The main objectives of the new Integrated Food Laws & its structure
- Methodology of development of Standards
- Provisions of Labelling
- Acceptance of a basic list of additives
- Matters relating to GMP, GHP & HACP
- Issues related to Codex
- Procedure for sampling& launching of Prosecutin
- Grading of violations according to the nature of discrepancy.

Recent Changes / Amendments
Prevention of Food Adulteration Rules : The Ministry of Health & Family Welfare, Govt. of India vide its Notification No. GSR 908 (E) Dt. 20.12.2001 has provided for printing of statutory symbol on all products containing vegetarian ingredients. The notification came into effect from 20 June 2002. As members may be aware the Govt. has earlier amended PFA Rules vide notification No. 245(E) Dt.4.4.2001 provided for statutory printing of the symbols of food packages containing non vegetarian ingredients. This notification has already come into effect from 4 October 2001.

Our Federation along with apex organizations such as CII & CIFTI have represented to Hon'ble Union Minister for Health and Family Welfare seeking extension of a minimum period of 6 months for implementation of the notification, particularly on account of hardships in printing vegetarian symbol in advertisements. A delegation from the industry met the Secretary, Ministry of Health and Family Welfare and apprised him of the hardships faced by industry. Further follow up is in hand.

Standards of Weight and Measures (PC) Rules 1977
The Standing Committee on Food Standards has decided that the following issues be referred to Technical Committees to look into all aspects and to make recommendations to the Standing Committee:
(i) Revision of First Schedule as regards tolerance (maximum permissible error.)
(ii) Deletion of Rule 11 (a) and the Fourth Schedule for declaration of words "when packed" with net quantity declaration on packages.
At our request the representatives of industry have been included in the Technical Committee for each zone. Members of the Technical Committees will be visiting the factories of manufacturers for ascertaining the position regarding industry's plea for not reducing the maximum permissible error in weight.

BUREAU OF INDIAN STANDARDS
The Meeting of the Bakery Confectionery and Nutritious Supplements Sectional Committee of BIS was held on 1 March 2002. The Draft standards for biscuit were discussed. FBMI submitted its suggestions on various issues including classification of biscuits into 5 categories - sweet /semi sweet, crackers, cookies and speciality biscuits. It has also been suggested that separate standards should be evolved for wafers. FBMI has also represented that proposal for Peroxide value should not be included in the standards for biscuits and there should not be any requirement of checking biscuits for micro biological parameters. Supporting data received from members on total plate count, coliform count, E coli and stapylococcus aureus, etc., have already sent to the Bureau of Indian Standards showing that bacteria cannot remain alive at the temperature at which biscuits are baked.

OFFER OF GRANT FOR FOOD PROCESSING INDUSTRIES
The FBMI along with other organizations of industry had requested the Ministry of Food Processing Industries to revise its assistance for promotion of food of processing industry. Accordingly the Ministry has offered grants unto Rs. 25 lakhs or 25% of the Capital cost for setting up / expansion / modernisation of units in all sectors of food processing industries. The Ministry is also presently revising its outline of assistance under the schemes of 10 th Plan. The information has been circulated to members vide No. FB 1nd 7 52 Dt. 1.2.2002.

SALES TAX / VAT ON BISCUITS
As members are aware, though the Empowered Committee of Finance Ministers fixed the minimum floor rate of Sales Tax on biscuits at 8%, various State Governments are levying Sales Tax on Biscuits in the range of 8% to 16%.

The Sales Tax regime is proposed to be replaced with Value Added Tax (VAT) from 1 April 2003. The Federation has already represented that biscuits being a nutritious snack food product predominantly consumed by the consumers from the lower strata of society should be included in the list of goods at the minimum level of VAT. Representations have already been sent to Chief Ministers and other officials concerned in Punjab, Haryana, UP, Karnataka MP and Kerala. Many States such as Himachal Pradesh, Delhi, Arunachal Pradesh, Kerala have however, deferred introduction of VAT. The trading communities in Delhi, Tamil Nadu, etc. have resorted to agitations against levy of VAT. As far as biscuit is concerned, it is learned that VAT @ 12.5% is proposed to be levied by many states. FBMI has therefore, urged States to fix the rate of VAT on biscuits at the minimum level of 4% meant for items of mass consumption.

FOOD SAFETY AND QUALITY
The Ministry of Health and Family Welfare and the Ministry of Food Processing Industries have formed different Sectoral Groups in ordesr to facilitate formulation of a proper and efficient Food Safety Programme towards implementation of GMP , GHP and HACCP in the food industry, either under law or voluntary.

In the Group on Bakery products sector, FBMI has been made the Convenor of the Group with AIBMA, Society of Indian Bakers and Britannia Industries Ltd as members. The meeting of the Sectoral Groups was held on 20 June 2002 at Nirman Bhawan New Delhi. The President, FBMI attended the meeting. Subsequently, FBMI has submitted its objections 1 suggestion to the Ministry of Health, Govt. of India, and the text of which is given in Arnnexure- A.

FOOD PROCESSING INDUSTRY POLICY
As the members may he aware, the Ministry of Food Processing Industry is presently undertaking the formulation of a comprehensive Food Processing Industry Policy.

Our Federation has submitted its views / suggestions for appropriate incorporation in the Policy, the text of which is given in Annexure B

TRAINING PROGRAMME IN BISCUIT MANUFACTURE
With the objective of imparting Training to the personnel in the biscuit industry as also to prospective entrepreneurs, FBMI in collaboration with its members and other organizations, conducts training programme in

Biscuit Manufacture for the last two decades. The XIII Training Programme was organized at CFTRI Mysore on 28 to 30th August 2001. The XIV Training Programme has just concluded at the Resort Country Club, Gurgaon, Haryana, from 25th to 28th March 2003. M/s Britannia Industries Ltd and Parle Products Ltd cosponsored both the Training Programmes.

FOOD REGULATORY MEASURES - AN OVERVIEW
During the period underreport, there has been various proposals for changes/amendments in the important Food Law affecting our industry, such as PFA Act/Rules, Standards of Weights & Measures (Packaging Commodities) Act/Rules, etc.

Some of the important issues in this area of Food Laws and follow up action by FBMI are given below :-
Packaged Commodities Rules - Standards of W & M Act
The Dept of Consumer Affairs (Director of Metrology), Govt. of India, proposed mandatory printing of 1st point price, in addition to MRP, for food products like biscuit etc. Our Federation submitted objections to the said proposals, as there has never been any grievance from consumer forums against the biscuit industry and this would on the one hand add to the cost of packaging/printing and on the other hand would only create confusion for the consumers without any benefit. The proposal has been kept in abeyance.

Similarly, our Federation on its own and through apex organizations, effectively pursued and objected to the proposed amendment in the Standards of Weights & Measures (PC) Rules, for making 50% reduction in the present Maximum Permissible Error in weight of biscuit (Tolerance Limit), on the ground that various factors such as atmospheric/environmental changes affect moisture, temperature, and consequently affect the weight of biscuit, at both the manufacturing, marketing/retail levels, and hence the present Tolerance Limit should be maintained. The Sub-Committee of the Committee on Food Standards, constituted sub grounds of experts in various Zones/States to review the issue with representatives of industry, to visit biscuit units and recommend their view points on Tolerance Limit, together with another proposed amendment of discontinuing with the proviso of printing "When Packed" on the packages of biscuit and other food products, which was also objected to by our Federation by representations and meetings in the Sub Committee of the CFS. Expert from our membership participated in this process through CIFTI. At the time of this Report, the issues involved are under consideration/ review by the Committee on Food Standards (CFS).

Approval of Additives
The list of various additives needed for making Biscuit is required to be approved by the Standing Committee on Weights & Measures. The Committee has held various sittings in this connection. FBMI has represented on he Committee for scrutinizing various additives for which various food processing industries have sought approval.

Prevention of Food Adulteration Act / Rules

Members reported various instances where the PFA authorities in the States are adopting penal action, even in cases of very minor offences / errors under the PFA Rules. FBMI suggested that such minor errors etc should be compounded, avoiding prosecution, harassment and resultant losses to biscuit units. This issue has also been referred to CIL and CIFTI for further follow up.

Introduction of HACCP/GMP/GHP

The Govt. of India (Ministry of Health), has formulated proposals to introduce the concepts of Hazard Analysis Control Convention Procedures (HACCP), Good Manufacturing Practices (GMP) and Good Hygienic Practices (GHP), as a step towards eventual adoption in the various states in accordance with the International Codex Alumnus, in the context of trade terms and regulatory, measures under the WTO regime.

After discussions with FBMI and other organizations, the Dept of Health constituted Sectoral Groups on various categories of food processing industries. The Sectoral Group on Bakery Products consisted of FBMI, as Convener and FBMI and SIB as members. After detailed deliberations, the Federation submitted our comments and suggestions, highlighting the hardships that the biscuit units would face in the event of statutory enforcement of HACCP/GMP/GHP.

The Federation suggested that the concepts of HACCP etc should be made voluntary in the first two/three years, keeping in view the ground realities in the bakery sector and due to the fact that the implementation of HACCP/GMP/GHP may be beyond he financial and technical capabilities of majority of the biscuit manufacturers and compulsory introduction of these regulations would adversely impact the viability and may lead to closure of a large number of bakeries in the country. FBMI, after detailed deliberations by the Executive Committee, suggested to the Govt. of India that, in the first instance projects for imparting training to the Managers/Executives and workforce in the bakery industries should be organized so as to create awareness and knowledge on these complex regulatory aspects and educate the personnel in the industry on various aspects of HACCP etc. FBMI has proposed to organize such Training Programs and Workshops, in collaboration with the Dept of Health, Govt. of India. Specific project application has since been submitted by FBMI, which is Convener or the Sectoral Group on Bakery Industries a mentioned above

Federation is glad to inform members that the government of India has accepted our suggestion and as desired by the Ministry of Health, Govt. of India, a four day Training Programme / Workshop on HACCP/GMP/GHP will be held as per the following programme:

Day & Dates:
Wednesday 28 January to Saturday, 31 January 2004

Venue:
National Institute of Biology A-32, Institutional Area Sector - 62 Noida- 201 302 (GB Nagar, UP)

Unified Food Laws - Need for
As members are aware, the food processing industries, including Biscuit / Bakery segment, are subjected to and administered by a large number of statues i.e. PFA Act / Rules, Weights & Measures Act, Packaged Commodities Rules, MMPO / FPOA orders under Essential Commodities' Act / Rules, Agmark, BIS etc. There are much multiplicity of implementing / enforcing Agencies / Departments for watch one of these Acts and Rules, both at Central and State levels. Unfortunately, many a time there are instances of overlapping and even contradictions between such Agencies / Departments. PFA Act / Rules are recipe based, and focus on prosecution / penal action, even for minor / technical errors etc. which are also different in the States.

Similarly, in the Standards of Weight & Measures Act and PC Rules, there have been plethoras of amendment, and proposals for more restrictions on the food processing industries including Biscuit and this has resulted in unavoidable hindrances in the development and growth of the industries.

It is in this context that our Federation in close coordination with CIFTI, CII, FICCI, PHDCCI urged he Government to evolve a single Integrated Food Law, encompassing the existing legislation's mentioned above, with main focus on development and promotion of the Food Processing, Agro Based industries in the country, paving way for creation of large employment generation, consumption of varied types of safe food products of good quality, at reasonable prices benefiting consumers particularly those in the lower and middle segments of the society. Exports and better capacity utilization also need to be encouraged in the proposed Integrated law, which would also result in higher productivity and better revenue for the Central and State Governments.

As a result of such concerted efforts and presentations by organizations of industry, including AIMBA the Government constituted the Justice Venkatachalam Committee to review the entire gamut of the existing Food Laws and to recommend the ways ad means and basis for unifying these Acts / Rules and regulations into an Integrated Food Law (Act). After due consideration of all aspects and by inviting suggestions from Govt., Industry and Commerce as well as consumers and other important sections of the community at large, the Committee submitted its report containing detailed suggestions / recommendations on the imperative need for integrating the existing multiple food laws.

Accordingly, the Govt. formed a Group of Ministers with the Ministry of Food Processing Industries as the nodal point and this comprehensive exercise has resulted in the Draft Food Bill 2002 presented to the Group of Ministers. The said Draft Food Bill 2002 has been formulated to "provide for the production, manufacture, processing and sale of safe and suitable food systematic and scientific development of food industry, introducing new technologies, imparting new inputs of market dynamics, and to create an enabling environment for innovation and value additions, ensuring high degree of objectivity and transparency and to provide for the establishment of a Food Development an Regulatory Authority of India an the Council for Food Standards and for matters connected therewith or incidental thereto.

In addition, a Draft Prevention of Food Adulterations (Amendment) Bill, 2002 has also been prepared and disseminated for further deliberations. The relevant excerpts from the preamble of the Draft Food Bill, 2002, along with the "Concept Note" on the Draft PFA (Amendment) Bill 2002 is given Annexure-C.

Our Federation, jointly with other apex industry organizations, is continuing follow up with a view to achieving introduction of the Integrated Food Act.

FOOD LAWS - A REVIEW OF THE SCENARIO
The year under report witnessed controversial development relating to allegations against certain food processing industries such as mineral / drinking water, soft drinks, etc. regarding contents of pesticides, heavy metals, etc, leading to constitution of a Joint Parliamentary Committee (JPC) and issuance of a Draft Notification by the Government of India stipulating permissible contents of pesticides, heavy metals, etc in various food products. FBMI interacted with the Government and with the apex organizations of industry. The Executive Committee discussed these developments in detail, in the context of the manufacturing process involved in the biscuit industry.

Weights & Measures Act (PC) Rules
The Ministry of Consumer Affairs, Govt. of India initiated action to reduce the existing Maximum Permissible Error (Tolerance Limit) in weight of biscuit, by 50% . The Federation represented against the proposal and actively participated in the Sub-Committee constituted by thy Government under the Chairmanship of the Director, Legal Metrology, Ministry of Consumer Affairs. As a result, the proposal to amend tolerance limit has been deferred.

Prevention of Food Adulteration Rules
The Ministry of Health, Govt. of India issued a Draft Notification on the list of approved additives. The Federation submitted its objections/suggestions and also tendered oral evidence before the Standing Committee. Further follow up action is in hand.