Introduction
The Indian food processing market achieved a significant milestone in 2022, reaching a value of INR 25,455 billion.1 It is projected to maintain a growth rate of 7.23% over the next five years2, solidifying India's position as the third-largest contributor to global food revenue. As the industry and market continue to expand rapidly, the legal framework governing food has also undergone significant developments along with the enforcement of the said legal framework.
In India, this legal framework essentially consists of the Food Safety and Standards Act, 2006 ("the Act") along with the rules and regulations framed thereunder ("FSSA Framework"). The FSSA Framework sets standards for various food products, including their composition, quality, safety, and labelling requirements. The FSSA Framework also establishes various authorities to inspect, sample, and test food products to ensure compliance with the prescribed standards for enforcement of the laws.
In this article, we will be examining the provisions that govern the labelling of food products and also highlight and analyse a prevalent issue wherein the labels of intermediary foods are tested against benchmarks that are set for consumer foods.
UNDERSTANDING INTERMEDIARY FOODS
An intermediary food is any ingredient that is used during the production of a final/finished food product (e.g., yeast used by bakers; rennet, mesophilic and thermophilic cultures used by cheesemakers; etc.) that may be sold to a consumer and can also include food additives. It is relevant to note that intermediary foods are intended only for manufacturing and are not intended for sale to end consumers for consumption.
Given the fact that intermediary foods are mere ingredients used to prepare a final product, they cannot be subjected to the same standards as consumer foods, which in general are of a higher threshold and degree of scrutiny.
Section 3(j) of the Act defines "food" as "means any substance, whether processed, partially processed or unprocessed, which is intended for human consumption and includes primary food to the extent defined in clause (zk), genetically modified or engineered food or food containing such ingredients, infant food, packaged drinking water, alcoholic drink, chewing gum, and any substance, including water used into the food during its manufacture, preparation or treatment but does not include any animal feed, live animals unless they are prepared or processed for placing on the market for human consumption, plants, prior to harvesting, drugs and medicinal products, cosmetics, narcotic or psychotropic substances"
From a perusal of the definition of "food", it is evident that the said definition is wide and would encapsulate any substance used during the manufacture, preparation and treatment of food. This would mean that most intermediary foods would fall within the definition of food under the Act.
The Act defines "food additives" and the Food Safety and Standards Authority of India has formulated the Food Safety and Standards (Food Products Standards and Food Additives) Regulation, 2011. However, the same is not exhaustive from a labelling context as the said Regulation does not provide for labelling requirements (barring hyper-technical requirements on a case-to-case basis) and mostly relies upon the provisions of the Food Safety and Standards (Packaging and Labelling) Regulations, 20113 ("2011 Regulations") and the Food Safety and Standards (Labelling and Display) Regulations, 20204 ("2020 Regulations") which has superseded the 2011 Regulations.
Furthermore, Section 23 of the Act provides:
"Packaging and labelling of foods.
(1) No person shall manufacture, distribute, sell or expose for sale or despatch or deliver to any agent or broker for the purpose of sale, any packaged food products which are not marked and labelled in the manner as may be specified by regulations:...."
The above indicates that Food Business Operators would have to comply with the labelling regulations mentioned under Section 23 of the Act.
The labelling regulations as mentioned in Section 23 are the 2011 Regulations and subsequently the 2020 Regulations, which have been notified under clause (k) of subsection (2) of Section 92 read with Section 23 of the Act.
FRAMEWORK UNDER THE 2011 REGULATIONS: IDENTIFYING THE PRACTICAL ISSUES
While the 2011 Regulations were formulated to codify the standards governing packaging and labelling of food products, the said Regulations suffered from a substantial flaw i.e., they failed to provide for an exhaustive labelling regime for intermediary foods and mostly regulated consumer foods leading to a grey area qua intermediary foods.
This issue is apparent upon a perusal of Regulation 1.2.1(8) which defines "Prepackaged" or "Pre-packed food" and Regulation 2.2.2 (Labelling of Pre-packaged Foods) within Chapter 2 (Packaging and Labelling) of the 2011 Regulations.
As per Regulation 1.2.1(8), "Prepackaged" or "Pre-packed food", means food, which is placed in a package of any nature, in such a manner that the contents cannot be changed without tampering it and which is ready for sale to the consumer. Whereas Regulation 2.2.2 provides for the labelling of Pre-packaged food and captures labelling requirements such as (i) name of food, (ii) list of ingredients, (iii) nutritional information, (iv) veg, non-veg declaration, etc.
In the absence of any other provisions catering to intermediary foods, it can be inferred that the 2011 Regulations lack explicit labelling requirements for intermediary foods, resulting in a significant ambiguity regarding the labelling standards applicable to such products.
In our experience, the aforementioned ambiguity resulted in the enforcement authorities often applying labelling standards laid down under Regulation 2.2.2 of the 2011 Regulations to intermediary foods, which were never intended for sale to consumers in the first place. This issue is significant as manufacturers of intermediary foods interpreted Regulation 2.2.2 as being non-applicable to foods that are not sold to consumers and accordingly, chose to design their product artwork.
This issue was highlighted in Danisco (India) Private Limited v. Union of India5, wherein, the petitioner had imported a microbial culture intended for direct vat inoculation into milk for the preparation of yogurt and fermented milk products. However, the authorities denied the petitioner a No Objection Certificate (NOC) on the grounds that the product in question did not provide a list of ingredients on its packaging as per the requirement under Regulation 2.2.2.
The Hon'ble Delhi High Court opined that an industrial user that purchases food items for utilization in their production process would be excluded from the definition of "consumer" as provided in Section 3(1)(f) of the Act. Consequently, products falling under the definition of food, which are not intended for direct human consumption but rather for sale to industrial consumers for use in the manufacturing of food articles, would be exempt from being classified as "pre-packaged" or "pre-packed food."
The above judgment of the Single Bench was also confirmed by the Division Bench of the Hon'ble Delhi High Court in Food Safety and Standards Authority of India vs Danisco (India) Pvt. Ltd[6].
The above position of law was also upheld by the Hon'ble High Court of Bombay in Wild Flavours India (Pvt.) Ltd v. Food Safety and Standards Authority of India7.
Both the Judgments interpreted the provisions of the 2011 Regulations and concluded that the requirements in terms of compliance which are applicable to food which are ready for sale to consumers cannot be applied to food which is meant for sale to industries for use in the manufacturing process of food articles (and not intended for direct human consumption, i.e., intermediary products).
UPDATED FRAMEWORK IN THE 2020 REGULATIONS
Subsequently, the FSSAI came up with the 2020 Regulations to overcome the ambiguities present in the 2011 Regulations. The 2020 Regulations have been implemented with effect from 01 January 2022.
The 2020 Regulations have inter alia introduced relevant provisions such as:
- A new definition of "non-retail containers" has been provided to cover (packaging of) intermediary foods that are not intended for direct sale to consumers.
- Multi-unit package and food for catering have been expressly defined.
- A new chapter has been introduced specifying the labelling requirements for "non-retail containers" and "food additives", respectively.
- The Regulation provides that the list of ingredients, declaration regarding veg or non-veg and nutritional information on non-retail containers can also be provided in the form of accompanying documents if not on the container itself.
CONCLUDING THOUGHTS
With the incorporation of new provisions in the 2020 Regulations, a much-needed delineation between intermediary foods and consumer foods has been created and intermediary foods are now subject to testing (of labels), based on the standards established for non-retail food products. This would essentially reduce the chances of the labels of intermediary foods being incorrectly tested against the labelling standards laid down for consumer foods. However, it is crucial for manufacturers to understand the differentiation between consumer foods and intermediary foods while designing their product artwork to avoid any erroneous implications or repercussions. This is important for ensuring compliance, remaining vigilant against any wrongful/illegal interpretation by the food safety authorities and mitigating the risk of prosecution.
Footnotes
1. https://www.statista.com/outlook/cmo/food/india
2. Ibid
3. https://fssai.gov.in/upload/uploadfiles/files/Packaging_Labelling_Regulations.pdf
4. https://fssai.gov.in/upload/notifications/2020/12/5fd87c6a0f6adGazette_Notification_Labelling_Display_14_12_2020.pdf
5. [AIR 2015 (NOC 219) 89]
6. 219 (2015) DLT 752
7. (2017) SCC OnLine Bom 2491
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