Dual/ Differential Maximum Retail Sale Price

Consumers, in India, have in the recent past had a concern in relation to FMCG and, in particular, food products being made available by manufacturers, at different prices in different places. The complaints have been with regard to products being sold at cinema halls, malls, airports etc., at higher prices as compared to the same products at regular retail shops. The Department of Legal Metrology has, in the recent past, pulled up such sellers but was unable to bring these matters to logical closure as the Legal Metrology Act, 2009 and the Legal Metrology (Packaged Commodities) Rules, 2011 (PC Rules) did not provide for the regulation of dual/ differential pricing.

The Ministry of Consumer Affairs, through a recent amendment to the PC Rules, introduced a provision regulating the dual/ differential pricing of products. This provision prohibits manufacturers, packers or importers from declaring different prices on identical commodities. The prohibition is, however, subject to the pricing being arrived at by adopting restrictive or unfair trade practices as have been set out in the Consumer Protection Act, 1986.

The above would mean that a manufacturer, packer or importer is prohibited from using a dual/ differential maximum retail sale price in relation to an identical commodity, by using restrictive or unfair trade practices as per the Consumer Protection Act. As a consequence, it would appear that a manufacturer, packer or importer may continue to have differential prices in relation to an identical commodity as long as there is an adequate justification for the same, which results in an increased cost from the factory to the shelf, provided the same is not coloured by unfair or restrictive trade practices.

The amendment is being brought into force from January 1, 2018 and manufacturers would, from such then on, have to ensure that all their products are in compliance with this provision.

Legal Metrology (Packaged Commodities) Amendment Rules, 2017

The Ministry of Consumer Affairs, Food and Public Distribution (Department of Consumer Affairs), has, as on June 23, 2017, issued the Legal Metrology (Packaged Commodities) Amendment Rules, 2017. The amendments being made to the Legal Metrology (Packaged Commodities) Rules, 2011 would come into force and effect from January 1, 2018.

The Packaged Commodities Rules, in view of the amendments made, will now take into its fold various new concepts such as the concept of dual retail sale price, the buying and selling of products through e-commerce websites etc.

Import Regulations

The Food Safety and Standards Authority of India (FSSAI) has now notified the Food Safety and Standards (Import) Regulations, 2017 and has made the same effective from March 10, 2017. This effectively concludes the process initiated by the FSSAI in the year 2016 during which it had issued various notices in relation to the operationalisation of the Import Regulations and also a set of draft regulations calling for comments and suggestions.

In terms of a press release, the FSSAI has stated that the Import Regulations have been notified for the purpose of streamlining the process of clearance of imported food in an efficient and transparent manner. It would be important to note that whilst the Import Regulations have just been notified, the FSSAI has been regulating the import of food products at various ports through its ‘Food Import Clearance System’. Importers of food products have faced various difficulties, in the past, due to a lack of clarity in relation to certain aspects of imports. The Import Regulations, it is hoped, would remove these difficulties and make the process of import efficient.

The Import Regulations would be applicable to all food products being imported into India and among other things sets out the licenses required and the procedures to be followed for the import of food products, shelf  life of imported food products, the labelling declarations required to be set out on packages being imported, etc.

The FSSAI has however not provided any specific time period for compliance with the Import Regulations which would imply that the Regulations must be complied with immediately.

Guidelines – Operations of E-commerce food business operators

The Food Safety and Standards Act, 2006 (FSSA) was drafted and brought into force and effect based on the erstwhile Prevention of Food Adulteration Act, 1954. As a result, many of the provisions, as were contained in the erstwhile law were retained and the FSSA, accordingly, was founded on the traditional ‘brick and motar’ format of business, as food products were then dealt with. The FSSA therefore, as argued by many, did not expressly relate to the ‘modern’ (if it may be called) way of doing business.

The ‘modern’ way of doing business today involves consumers transacting online through laptops, smart phones and other internet enabled devices. It is not surprising that the rapid development of transacting business online, led to food business operators finding their way onto the online marketplace or ‘e-commerce platforms’, as commonly known and, today, different kinds of food products can be bought online and through e-commerce platforms, by the mere click of a button.

The question that has always perplexed many a people operating these e-commerce businesses is as to whether the FSSA does indeed apply to food business being undertaken through online stores/ e-commerce platforms. To this, we would say that going by the intent of the law makers, the FSSA would ideally apply. In view of the manner in which the term ‘food business’ has been set out in the FSSA, almost any and every kind of food business carried on, in India, will fall under and within the ambit of the FSSA.

In order to get past the uncertainty in relation to the applicability of the FSSA to e-commerce food business operators, the FSSAI has, during February 2017, attempted to provide clarity on this by issuing a set of guidelines for the operations of e-commerce food business operators. These guidelines cast obligations on e-commerce food business operators such as registration and licensing, supply chain compliance, food product listing and information, etc.

The FSSAI has however stated that the guidelines are to be read only as an explanatory memorandum and not in supersession or replacement of any of the provisions of the FSSA, the rules and the regulations. The aforesaid, unfortunately, whilst clearly establishing the intention of the FSSAI to clarify the applicability of the FSSA to the operations of e-commerce food business operators, leaves one wondering as to whether the same would have the true force of law.

On a perusal of the guidelines, it would appear that the FSSAI is, with the best of intentions, trying to make the law, in relation to e-commerce food business operators, through these guidelines. The question, therefore, would be as to whether these guidelines, which appear to be setting out the law, are required to be complied with by all e-commerce food business operators, as if complying with the law. It may be recalled that, in the past, the Supreme Court has held that the FSSAI does not have the power to issue such guidelines that have the effect of creating regulations without following the procedure mentioned in the FSSA, i.e., by placing such regulations before the Parliament, as required in terms of the FSSA.

In the interests of providing true clarity to e-commerce food business operators, it would therefore be imperative for the FSSAI to crystallise the guidelines, into a set of duly made regulations, applicable to e-commerce food business operations. The same would not only ensure due compliance but would also be the basis of creating a structured legal framework in relation to the sale of food products online.

Pending Cases – Repealed Enactments

The Food Safety and Standards Act, 2006, on its coming into force, repealed various existing enactments and orders, including the Prevention of Food Adulteration Act, 1954, the Fruit Products Order, 1955, the Meat Food Products Order, 1973 and the enactments/ orders set out in the Second Schedule to the FSS Act.

The Food Safety and Standards Authority of India has taken note of the fact that a large number of cases under these enactments/ orders are pending before various courts and tribunals, across the country. In a circular issued to all the Commissioners of Food Safety, the FSSAI had stated that in many of these cases the offences committed are not very serious and further the penalties/ punishments that have been prescribed are also not substantial and that the pendency of these cases, in addition to creating a burden on the judicial system, also requires the time and the resources of the Government in pursuing the matters. The FSSAI is keen on ensuring that these resources are used towards the implementation of the FSS Act such that consumers receive safe and wholesome food.

The FSSAI has therefore asked all Commissioners of Food Safety to examine the pending cases under the repealed enactments/ orders and ascertain as to whether the said cases may be withdrawn. The findings of the Commissioners of Food Safety are however yet to be made public.

This move of the FSSAI comes across as a practical solution to reducing the number of outstanding cases thereby enabling the FSSAI to channelise its energies and resources in the right direction. The circular, that was issued earlier this year, is however not to be confused as a mass amnesty scheme and it should be clearly understood that there would no automatic withdrawal of pending cases.

 

Caffeinated Beverages – Standardised Food Products

The Food Safety and Standards Authority of India has issued a notification dated December 2, 2016, and published in the Official Gazette on December 6, 2016, in relation to amending the provisions of the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011, to include standards for caffeinated beverages.

The standards are being set out under the category of ‘Beverages Non-Alcoholic – Carbonated’ in the Standards Regulations. The inclusion of these standards, for caffeinated beverages, would mean that products which fall within this category may now be manufactured as ‘standardised food products’ in terms of the FSS Act.

The notification states that while the standards would come into effect from December 6, 2016, food business operators are required to be in compliance with the provisions of the regulations by July 1, 2017.

Use of Newspaper as Packaging Material

The Food Safety and Standards Authority of India has, today, issued an advisory cautioning the use of newspapers to wrap, pack and serve food products. The FSSAI recognises that it is common practice to use newspapers as packaging material, however, it has stated that the same is resulting in consumers being slowly poisoned in view of the ink, colours and pigments used in the newspapers.

The FSSAI has recognised the fact that newspapers could be contaminated with metallic contaminants, mineral oils and other harmful chemicals, which could cause serious medical problems, especially with older people and children.

The FSSAI has stated that newspapers must not be used to wrap, cover or serve food products and must also not be used as absorbent paper for absorbing the excess oil in case of fried foods. The FSSAI has requested all Commissioners of Food Safety in the states and union territories to initiate a campaign to generate awareness amongst the people and to discourage the use of newspapers in relation to food products.

Proprietary Food – The Final Regulations

In a previous post, we had discussed a direction issued by the Food Safety and Standards Authority of India, in August this year, in relation to the ‘finalised standards’ for proprietary food products. The post, among other things, discussed the gaps in the direction, specifically in relation to whether the same was enforceable and was issued by the FSSAI in accordance with the procedure and requirements of the Food Safety and Standards Act, 2006.

The FSSAI has now, as on October 13, 2016, issued a final notification which amends the provisions set out in the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011, which specifically sets out the meaning and standards for proprietary food products. These provisions will now be the final provisions that would apply to proprietary food products and would supersede earlier notifications, orders and directions issued by the FSSAI.

The provisions of this notification are the same as compared to the earlier direction issued by the FSSAI, with the exception of the provisions in relation to health claims. While the earlier direction prohibited all types of health claims to be made in relation to the products, whether on the label or otherwise, this notification now permits health claims to be made, whether on the product label or otherwise, as long as the same is substantiated with adequate and scientific evidence.

The above change made by the FSSAI to the regulations as were set out in the direction, comes as a welcome relief to the food industry. As we had stated earlier, it did not seem logical as to why the FSSAI was preventing such food products from making health claims while the main Act, the FSS Act, itself permits such health claims, as long as the same are capable of being substantiated with adequate and scientific evidence. It appears that the FSSAI has now kept the final regulations in tune and in line with the main Act, the FSS Act.

In addition to the above, while this notification states that the final regulations and provisions would come into force on the date of the publication in the Official Gazette, i.e. October 13, 2016, it appears that the FSSAI has provided time to food business operators to comply with the same until July 1, 2017. This would, in our view, imply that the enforcement activities in relation to proprietary food products complying with these regulations would be undertaken only subsequent to July 1, 2017.

Relaxation – Use of Old Packaging Material

The Food Safety and Standards Authority of India (FSSAI) has issued an order dated November 23, 2016 based on several representations received from various stakeholders in relation to the use of old packaging material.

In terms of the applicable requirements under the Food Safety and Standards Act, 2006 (FSSA), the name, address of manufacturers/ packers, etc., and their FSSA license numbers are required to be set out on the packages of various products. Further, in the event that any of the aforesaid details undergo any change, the said change must be reflected on the packaging material.

The FSSAI has now recognised the fact that a lot of the pre-printed packaging material with the details of the old name, address and license number gets wasted as the same is not permitted to be used in terms of the applicable laws. Keeping this in mind, the FSSAI has now stated that, on the requisite application made to it and on paying the required fees, it would permit food business operators to use the pre-printed packaging material with the old details printed on the same, for a period of 6 months which may be extended by a period up to an additional year.

This is a welcome step taken by the FSSAI as it would, in addition, to helping food business operators also benefit the environment and reduce the amount of waste being generated in view of the change of the name, address or license number of a food business operator.

Standards For Packaged Drinking Water – Substituted

The Food Safety and Standards Authority of India (FSSAI), has, as on November 15, 2016, substituted the standards set out for packaged drinking water in terms of the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 (Standards Regulations).

The notification states that the substitution would come into force on or after March 1, 2017.

While it is clear that the standards for packaged drinking water are being substituted and that the new standards would have to be complied with by food business operators dealing with packaged drinking water, there appears to be an ambiguity in relation to the date on which this substitution would come into force, in view of the use of the terms ‘on or after March 1, 2017’. It is unclear as to whether the FSSAI would issue another notification prior to, on or after March 1, 2017, setting out the date on which the standards would come into force. Nevertheless, food business operators, we feel, must start compliance with the new standards as soon as possible and in any event before March 1, 2017.