International Food Safety and the Global Food Chain:

1. International Food Safety and the Global Food Chain: China’s role Richard Gilmore President/CEO of The GIC Group Managing Director of Global Food Safety Forum

2. Background • China • Growing food product exporter • Ingredient supplier internationally

3. Background Incidents • US • Salmonella • Egg, 2010 • Peanut butter, 2008 - 2009 • EU • Dioxin • Germany and others, 2010

4. Background Incidents • China • Melamine-tainted infant formula, 2008 and 2010 • Dairy products containing leather-hydrolyzed protein, 2011 • Cenbuterol-tainted pork, 2009 and 2011

5. Xinhua news • Probe into pork problem in China March 23 -- The State Council's call for a thorough probe into the scandal of feeding pigs with banned substances (ractopamine and clenbuterol) will help re-establish the public's confidence in the government. • China's top legislature launches new round of inspection on food safety law implementation March 24 -- The Standing Committee of China's National People's Congress (NPC) launched a new round of national inspections to ensure the country's Food Safety Law is properly enforced. • China targets dairy products, meat in food safety campaign for 2011 March 25 -- China has rolled out its annual working plan to beef up food safety in 2011, as more food safety scandals have entered media spotlight and aroused public concerns.

6. Factors increasing food-borne disease • Increased consumption of high-value food commodities • Meat • Poultry • Fresh produce • Doubling of the global demand for food and of the international trade in food

7. Factors reducing food-borne disease • Ability to first detect and investigate a food safety issue and then to develop effective control measures • Key role • Intergovernmental organizations • International bodies

8. Threat to the global food chain • Pathogens and non-pathogens • Fraud • Weak regulatory • Defrauding the consumer

10. Problems • Increasingly inter-connected global food supply chain vs. fractionated management of the food chain • Direct and indirect public health threats • Rising costs of remedies • Decreased sales • Recalls and destroyed product, and • Penalties from injured parties seeking compensation through court system • Dislocation effects on a multiplicity of trade and economic indicators • Lack of consumer and commercial incentives to underwrite national/international food safety systems

11. China dairy case • Rapid growth fueled by large investments from multinational dairy firms • Highly modern and concentrated processing sector vs.raw materials from millions of small, poor and uneducated traditional farmers • Government support and encouragement for growth vs.little emphasis on inspection and safety issues

12. China dairy case • Melamine crisis prompted Chinese new food safety law • Mandate regular inspections with no exemptions • New allowable tolerances for melamine in dairy products

13. Legislations and enforcement • Food Safety Law, China, 2009 • Food Safety Modernization Act, US, 2011 • Science-based and preventive • Import-Related Provisions • Accreditation Process for Third Party Auditors • Foreign Supplier Verification Program • Voluntary Qualified Importer Program • Third Party Certification

14. Legislations and enforcement • Lack of harmonization of standards/ certification • Regional differences in enforcement/ compliance • Overlap and lack of enforcement resources in place • Insufficient collaboration platforms for public/ private sector

15. Non-government initiative • Transaction oriented strategy • Building an International Collaborative Network standards

16. Non-government initiative • Transaction oriented strategy • Creating a collaborative industry and industry/public sector platform • Problem solving at operational level, food safety training, platform provider of dialogue • Designing risk minimization strategies for Asian markets and global food chain

17. Non-government initiative • Building an International Collaborative Network standards • Certification • HACCP • SQF • BRC • IFS • Third party audit • Industry accepted • Government recognized

18. Chinese consumers • Chinese consumers have the highest willingness to-pay for • Government certification program • Third-party certification • Traceability system • Product-specific information label

19. Survey of Beijing consumers • Consumer awareness, willingness to pay, and price premiums for HACCP-certified milk products • <20% respondents was aware of HACCP • After receiving information on HACCP • nearly all respondents were willing to pay a modest price premium for HACCP-certified products • Price of products with HACCP labels in Beijing supermarkets about 5% higher

20. Non-government initiative • Building an International Collaborative Network standards • Harmonization and International food safety standards

21. Non-government initiative • Conversation platform • Trade delegation visits to US and China • Workshop or on-site

22. Non-government initiative • International expert resources and professional expertise • Capacity building • GFSF Food Safety Workshop • Meat, November 2010 • Dairy, June 2011 • Exporters, June 2011

23. Non-government initiative • Rapid response team • Voucher System

24. Thank you!