In May 2021, the Council of Common Interests (CCI), the highest constitutional body for settling issues of power sharing between the federation and the federating units, decided that the provinces shall adopt national standards formulated by the Pakistan Standards & Quality Control Authority (PSQCA). The purpose was to improve the Ease of Doing Business (EODB) and harmonise the quality and standards of (packaged) food products across the country.
The CCI also decided that labelling and certification marks shall also remain with the federal government/PSQCA. However, the provincial governments would continue to retain the powers to register businesses for the sale of food products, issue licences for establishing food factories, and enforce and monitor food products.
The decision was made after almost four-year-long discussions between the centre and the provinces to settle the issue of the abundance of food standards that had erected trade barriers for the multibillion-dollar food industry.
The issue of the multiplicity of food laws and standards had its roots in the 18th Constitutional Amendment, which gave sweeping powers to the provincial authorities in regulating the food industry. Subsequently, the provincial governments created their own food authorities and framed rules, asking the food companies to follow these standards.
The latest QR coding requirements will prevent food companies based in other provinces from doing business in Punjab since their provincial authorities don’t require them to implement this system
With the four provinces and the federally-controlled territories following multiple quality regimes and different sets of food laws for a single product in each jurisdiction, the food processing and packaging industry found itself caught in a tough spot.
The issue was brought to the CCI agenda in 2017 by the then prime minister Shahid Khaqan Abbasi. The industry had approached the government, pleading that it was not possible to cater to multiple regulatory regimes and different standards of food laws of the federation and the provinces that had caused confusion on which standards were to be followed.
The CCI decision to implement One Standard across Pakistan also led to the creation of the National Standards Steering Committee (NSSC) under the PSQCA to deliberate upon the updated status of harmonisation of food standards and implementation mechanism of food standards as per the CCI decision.
Nonetheless, the consensus on the issue reached by the CCI is in jeopardy after the Punjab Food Authority’s (PFA) recent decision to implement a QR coding system to help its food safety officers track and trace the product label, approval and registration status.
The PFA, on November 11, issued a notification in a rush. It cited the decision of its internal Scientific Panel that food companies must integrate the track and trace system with the Punjab government’s ICT-based network/portal to prevent the manufacturing of counterfeit food products and bring more transparency.
It is enforcing the new regulations on a fast-track basis and amending the Punjab Food Safety Act 2011. This will make it mandatory for food companies to frame and execute integrated coding systems carrying details like brand name, batch number, date of production and expiry, location of plant and company profile and any other information as per international standards and practices.
But the food manufacturing industry based in Punjab isn’t happy with the new PFA order as it believes that the decision goes against federal Ease of Doing Business initiatives and the spirit of the CCI decision on food harmonisation.
“The food industry across the sector is confused over this ambiguity and is considering approaching the federal government against this unfair move being implemented on a fast-track basis,” a frozen meat company executive says. “It is a unilateral exercise by a single province, without giving due consideration to the National Standards Steering Committee (NSSC) deliberations under PSQCA that are yet to formulate a mechanism for the implementation of the decision.”
The reversal of the One Standard policy isn’t the only worry for the industry. With the economy in turmoil due to soaring food and energy inflation, the food companies would have to bear a significant additional cost for implementing the track and trace system at a time when they are seeing their sales contract fast and margins squeeze.
Furthermore, implementing the QR coding will involve extensive imports and capital expenditure to come in place.
“Without any open and transparent bidding, companies have been asked to approach a specific Italian vendor to install the system. Why? You should ask the PFA why it is forcing us to import QR code labels in the sticker form at a time when the government is trying to protect foreign currency reserves,” he said.
With most food companies having their manufacturing base in Punjab operating nationwide, they are at a loss to understand how the new regulations can be implemented only in Punjab in isolation.
“Does this mean we should have different coding systems for Punjab and the rest of Pakistan? Or should we bear the additional costs on the items exported to other provinces where it isn’t required at all as well? Large companies have invested in Punjab for sales across the country and not in any particular province. Therefore, there should be no confusion for the investors or any laws overlapping. It is against international practices,” said the marketing manager of another large food company wondered.
PFA chief Mudassir Riaz Malik says the authority didn’t have to consult the national steering committee before executing its decision as the PFA 2011 Act allows them to take any measures to counter misbranding and adulteration of food.
Mr Malik says the market share of counterfeit food items is estimated to be in the range of 15pc and 20pc in Punjab. “The industry spends a lot of money to counter counterfeit products every year. Our new measure will help the companies save that expense and increase their share in the market.”
No matter how proper the intentions of the PFA are, the unilateral manner in which the new track and trace QR coding system is being forced upon the industry is quite undesirable and a violation of the CCI decision.
Instead of starting a new controversy and strongarming investors, it should take the proposed measures at the forum of the national steering committee for consultation with other provinces and the industry.
This is important as the new QR coding requirements will prevent food companies based in other provinces from doing business in Punjab since their provincial authorities don’t require them to implement this system.
Published in Dawn, The Business and Finance Weekly, December 19th, 2022