Important Media News

We give below some of the important media news, of relevance and importance to Food Processing Industry, particularly Biscuit/Bakery Industry, for information of members:

1. FOOD LABELLING MAY BE PUT OFF
Producers of processed food and edible oils may get a respite for while. Mandatory information on nutritional and energy values in the food content and indicating licensing of proprietary foods on labels of all food grade items may be deferred till early next year. It was scheduled to come into effect from August 21. Industry sources indicated that responding to the request of food processing edible oil industries, the Health Ministry is considering to defer implementation of food labeling rules by six months from the original deadline of August 21
The mandatory food labeling rules were first notified by the Ministry of Health & Family Welfare through notification No GSR-491(E) dated July 21, 2006. As none of the industries was in a position to implement the rules At that time, it was decided to enforce the rules from August 21, 2007. Under the new rules, information on energy value of each food product has to be mentioned on labels in terms of Kcal(kilo-calorie) per 100 gm or per 100 ml. Information on amounts of protein, carbohydrate and fat in the food has to be expressed in gm per 100 gm or per 100 ml. This is similar in case of contents and types of fatty acids(indicating amount of saturated fatty acids, polyunsaturated fatty acids and trans-fatty acids). While vitamins and mineral contents have to be mentioned in metric units per 100 gm or per 100 ml.
(Source: Food & Beverage News June 30,2007)

NOTE: As member may be aware, IBMA in coordination with apex Organizations, had submitted comprehensive objections to the mandatory provisions in Notification No GSR-491(E) dated July 21, 2006 issued by the Ministry of Health & Family Welfare, Govt of India, amending the PFA Rules 1955. The official notification/order extending the date effect for 6 months from 21 August 2007 will be communicated to members, as and when issued.

Meanwhile, amendment in PFA Rules, as per the above mentioned Notification, will also be discussed at the SEMINAR ON FOOD LAWS – PROBLEMS 7 PROSPECTS, being organized by IBMA, on SATURDAY 11TH AUGUST 2007 AT CONNING TOWER, KOTA HOUSE, SHAHJAHAN ROAD9ADJACENT TO UPSC OFFICE0, NEWW DELHI-110001 9PL refer to our Circular No IBMA/FSSA/170 DATED 11TH JULY 2007. MEMBERS ARE ONCE AGAIN REQUESTED TO PARTICIPATE IN THE SEMINAR AND SEND YOUR CONFIRMATION IN THE REGISTRATION FORM BY 4TH AUGUST 2007. PARTICIPATION IS FREE FOR MEMBERS OF IBMA & MEMBERS OF STATE/REGIONAL ASSOCIATIONS OF BISCUIT MANUFACTURERS.

SINCE NUMBER OFPARTICIPATION IS LIMITED, PL RUSH YOUR CONFIRMATION.

MKT’S 001 TO GET LICENCE TO MAIM,NOT KILL -Competition Act provision departure from prevailing MRTP Act that restricts Market Leader’s Predatory Strategy

Predatory Pricing – selling product cheaper than the cost of production – is set to get explicit legal sanctity in the new law on competition. The practice will not be regarded as an abuse of a company’s dominance in the market, if it is to meet the pressures of a competitive market. It would be an offence only if it is adopted with the intention to kill the competitor and to recoup the losses later on. This is one of the signal departures of the Competition Act, still to be notified in its entirety, from the Monopolies & Restrictive Trade Practices Act in force at present. The MRTP Act leaves little room for a market leader to price its produce below the cost of production.

Predatory pricing as a strategy works on the assumption that once the smaller competitor is finished off through unsustainable pricing, the dominant player can hike prices to recoup the earlier losses and make a killing on top

In a market for traded goods or services, low levels of protection are sufficient to ensure that second stage of the predatory pricing strategy – of hiking prices – is extremely difficult to sustain. In such a situation, aggressive pricing by market leaders only serves to benefit the consumer. The ministry feels the law on competition should not end up robbing the consumer of the benefit.

The Corporate Affairs Ministry has shot down the recommendations of some parliamentarians and the Planning Commission who said the sharp fluctuating by a dominant player in the market should be treated as abuse of its leadership position. The Ministry has made up its mind that market leader should not be deprived of the chance to compete aggressively in the market like any other player. The Planning Commission wanted an amendment to the competition law so that a price reduction by the market leader would come under the regulator’s
lens. This provision in the existing law, however, has not been notified and the demand was to modify this before it is enforced. The ministry feels such a move would deprive the consumers of the benefits of competition………
Source: Economic Times, New Delhi – 3 July 2007

SCARAPPING OF SUGAR POLICY DEALS A DOUBLE BLOW TO MILLS

If the dip in sugar realizations and mounting cane arreas are not bad enough, mills in Uttar Pradesh have been dealt a double blow by the Chief Minister, Ms Mayawati’s, decision to scrap the Sugar Industry Promotion Policy 2004 of her predecessor, Mr Mulayam Singh Yadav’s Government. The policy had announced a host of incentives for setting up new capacities.

Incentives: These included remission of cane purchase tax and cane society commission, exemption from entry tax on sugar trade tax/administrative charges on molasses; reimbursement of transport costs of cane from out-centers to factory and of sugar from mill up to 600 km from the UP border; 10 per cent capital investment subsidy; and remission of stamp duty and registration charges on land purchase.

SOURCE: Hindu Business Line – 25 June 2007

BREAD, BISCUIT MAKERS GAIN FROM FALL IN SUGAR, WHEAT PRICES

The crash in sugar and wheat prices in the last six months has turned out to be bonanza for fast-moving consumer goods (FMCG) companies that make bread, biscuits and beverages. Since December, wheat prices have slumped about 13%, from Rs.11,000 a tone to Rs.9,500 due to an increase in output from 69.5 mt last year to 73.7 mt and the government’s move to import 5.5 mt of wheat. Sugar prices have also dipped 18.75% from Rs.16,000 a tonne to Rs.13,000 over the same period owing to 45% jump in output from 19.2 mt 28 mt……..

The biscuit industry consumes 3 mt of wheat annually to produce 1.6 mt of biscuit, according to the Indian Biscuits Manufacturers’ Association (IBMA). With a average use of 2,50,000 tonnes a month, the industry has cut down its monthly bill by Rs.37.5 crore.About half the biscuit made in the country are sweet and the industry consumes 1,75,000 tonnes of sugar annually. With a average of monthly coinsumption of about 14,584 tonnes, the industry has reduced its monthly bill by Rs.4.37 crore.

B P Agarwal, President of Indian Biscuits Manufacturers’ Association(IBMA) and CMD of Priyagold Biscuits, admits “the industry is seeing the impact of lower wheat and sugar prices”. He said the industry was incurring losses when prices these inputs were high. With a decline in their prices, the situation has improved, he added. “The situation has indeed improved realizations. We anticipated a fluctuation in wheat prices and have done forward booking of wheat to ensure good margins”, according to a senior executive in the procurement department of Britannia.

SOURCE: Food & Beverage News – June 30,2007

GUJARAT BAKERIES GOING FOR FORTIFIED ‘MAIDA’ FROM AUGUST 15

Bakeries in Gujarat would use fortified “maida”(white flour) in making products with a view to improving public health from August 15 this year, a government official said.

According to Dr S K Nanda, Principal Secretary, Food and Civil Supplies and Consumer Affairs Department, between 20,000 tonnes and 30,000 tonnes of bread, biscuits and other bakery products are consumed every month in Gujarat as 15% population of the State, mostly in urban areas, depend on these products for their daily needs. On an average, each of the 90 lakh consumers of Gujarat have an intake of 400 gm of bread and other bakery products.

Nanda said that his department, which has been spearheading fortification of daily consumer products such as wheat flour, salt and edibile oil, has now decided to expand its ambit to bakeries as well. At a recent meeting of bakery owners and government officials, it was decided to implement the fortified white flour scheme. With fortification being done at the raw material stage itself, in white flour, these products will now be laced with ingredients such as iron and folic acid…..

In the case of wheat flour, the Gujarat State Civil Supplies Corporation, which distributes 50,000 tonnes of wheat annually through the PDS, and the private players accounting for another 2.5 lakh tones, also went through a similar fortification process.

Pouches one gm of fortification mix(manufactured by Vadodara-based Nicholas Piramal India Ltd(formerly, Sarabhai Chemicals Ltd), that increased the price by only 10 paise per kg, were used by the Flour Millers Association and Wheat and Wheat Flour Association at the grinding stage throughout Guajarat before they supplied wheat flour to the people.

Mandatory for suppliers – As a part of fortifying food articles such as wheat flour, edibile oil and salt across all brands, the state government has mad it mandatory for suppliers of these items to ensure that their products contained iron, zinc, folic acid in wheat flour and Vitamins A and D in oil.