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Magazines Archives - 2009 May

How Thailand instils
Story 4 - Focus

As a major player on the global food circuit, Thailand has to ensure the integrity of its produce throughout the food chain, from source to plate. What are some of the government efforts and market practices at work to achieve this?

As one of the largest food exporters in the world, Thailand is well aware of its responsibility to ensure the integrity of the food it sells locally and abroad. It is in this light that government agencies, manufacturers and food retailers have set requirements and standards to minimise contamination scandals.

Over the past few years, the country has emerged as one of the world’s major food exporters. Today, its food industry, with an estimated 20 million workers, accounts for about 20% of the nation’s exports.

The Thai market is the world’s fourth-largest poultry exporter, with chicken shipped to the EU alone reaching 175,253 tonnes. Thailand is also a key global producer of rice, tapioca, durian, longan, sugar cane, pineapple and mangosteen, as well as the thirdbiggest sugar exporter.

Among its food exports, which grew by 7% last year to 661 billion baht (US$18.61 billion), are canned and processed fish; canned fruit and vegetables; ingredients; sweets; processed cereals; pasta; ready-to-eat vermicelli; and crackers.

The number of manufacturers has also shot up in line with rising demand from the 65-million-strong Thai population and the world market. There are at least 30 export-oriented manufacturers or distributors of frozen fruit and vegetables, and 64 manufacturers or distributors of canned, pickled or pureed fruit and vegetables.

With the food sector becoming a major contributor to the economy, the Thai government and industry players have taken steps to develop stringent safety standards. These are important to meet regulations of buyer countries as well as to prevent diseases like bird flu and food contamination such as that linked to China’s recent melamine controversy which forced Thailand’s Food and Drug Administration (FDA) to destroy 20,000 boxes of cheese crackers and biscuits, along with more than 13,000 cans of unsweetened condensed milk.

Thailand, too, has its share of food scandals. Last February, a minister resigned after it was revealed that rotten canned fish products were distributed to flood victims in the southern Thai provinces. The FDA then issued a nationwide ban on the sale of a particular brand after hundreds suffered from food poisoning.

That same month, more than 100 people were also rushed to hospital after consuming fried silkworm. The month before, 77 people, including 50 children, in Khon Kaen had fallen ill from eating contaminated papaya salad at a Children’s Day celebration.

Modernising farming practices

With this in mind, the food industry’s supply chain — from raw material suppliers to manufacturers and distributors — has taken measures to comply with various rules and regulations through modernisation of farming practices and getting certifications for HACCP (Hazard Analysis Critical Control Points), GMP (good manufacturing practice), GAP (good agricultural practice) and EurepGAP.

Manufacturers are also undertaking initiatives to adhere to specifications for halal food, which is prepared according to Islamic dietary laws and regulations. This is important for major producers like Thailand, given that its annual global sales of halal products are pegged at approximately US$80 billion or 5% of the total agri-food trade.

Towards this end, the country has set up the Halal Science Centre at Chulalongkorn University, the first laboratory in the world where food products are tested to ensure they follow production procedures and meet the halal requirements of Muslim consumers.

The FDA has likewise undertaken several initiatives to regulate the food industry and ensure that supply chains follow safety standards.

Under the law, companies could be fined up to 100,000 baht and executives jailed for six months to 10 years if factories are found to be substandard or producing contaminated food. The same penalties apply for fake labelling.

To safeguard the consumer’s interest, Thai authorities have also released a new regulation that penalises food manufacturers for including toys and other inedible material in the same packages as their products. This is to avoid melamine contamination.

FDA regulations set melamine limits at no more than 1mg/kg of milk and not exceeding 2.5mg/kg in terms of milk-based products.

Other government agencies have also taken measures to ensure high quality and safety of food products, as well as instil consumer confidence.

For instance, the Bangkok Metropolitan Administration (BMA) has started the Development of e-Traceability of Meat for Consumers in Bangkok Supermarkets initiative.

BMA’s director of the Veterinary Public Health Division, Sompop Chatraporn, says that under the pilot project, consumers could trace the products in the supermarket back to their points of origin via the lot or trace numbers printed on the packages.

The software for the project was developed by the University of the Thai Chamber of Commerce (UTCC).

Among food retailers, CP 7-Eleven, Thailand’s biggest convenience-store chain, also pays great attention to food safety. Its head of finance and investor relations, Kriengchai Boonpoapichart, says that the group has tough standards in place for all products in its more than 4,800 stores nationwide.

“We require all our suppliers to pass the Food Safety Liability Act. We conduct regular checks on our suppliers to ensure all products supplied to us are of good quality and meet the stringent safety procedures,” he explains.

The company has also invested heavily in Food Store Control System to keep all stores hygienic. So far, it has not faced food-safety problems, even during the melamine crisis when products from China were subjected to stringent checks by the authorities.

A large number of products sold at 7-Eleven stores are food items like sausages, hot sandwiches, dim sum, burgers, dairy products and pastries for consumers who look for more ready-to-eat products, Kriengchai says.

The company currently plans to increase the F&B-product composition on its shelves from the present 70% to between 80% and 85%, while spending another billion baht to raise capital for its food-processing subsidiaries and open distribution centres in major provinces.

Last February, 7-Eleven signed an agreement with FDA for technical assistance to raise food-safety standards in all its stores. It has even set up its own microbiology laboratory to perform food testing for its suppliers.

Similar standards are also in place in Tesco stores across the country. A spokesperson says the company, which serves about 29 million customers monthly, regularly sends inspectors to evaluate suppliers’ product quality and standards regularly.

Currently, about 6,000 small farms throughout Thailand are part of the Tesco global supply chain. These farms are compliant with GAP standards.

The Tesco representative maintains that the investment on acquiring such standards is worthwhile, based on 2007 figures showing that the value of products exported to over 3,500 Tesco stores in 13 countries exceeded eight billion baht.

The company also has its own technologists to test food products at its distribution centre in Ayutthaya before these items are delivered to its stores.

During the recent forum ‘EU-Southeast Asia Expert Meeting on Food Quality, Safety and Traceability’, held in Bangkok, Prof Sudip K Rakshit, vice-president for research, Asian Institute of Technology (AIT), noted that food quality has become a public health issue in the region.

According to Prof Sudip, eating contaminated food causes about three million deaths a year worldwide.

Experts are cooperating to address the issue by researching new measures such as developing new detection methods, technologies and equipment for risk assessment and traceability, he said at the forum.


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2009 May Stories:

Strategic planning in this crisis - Part 1: How has the paradigm shifted for Asian retailers?

HKTDC Food Expo 2009 to host first Hong Kong International Tea Fair

Cards & Payments Asia 2009: Shifting consumer attitudes impacting market direction

How Thailand instils

High stakes ensure integrity in Singapore

Cleanliness, safety the be-all & end-all in the Philippines

More needs to be done in Malaysia

India works to flush out the enemy within

One bright spot in downturn: Cosmetics non-negotiable

Two malls set to open in Singapore

GLP continues investment in China

Melamine scare, global recession put a dent on world dairy market

Laura Ashley Japan installs software to improve store efficiency, customer service

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