Why the adoption of FOPL (Front of Package Labelling) will be detrimental to Indian MSME Sector
In the wake of rising health concerns among Indians, the Food Safety and Standard Authority of India (FSSAI) proposed the Front of Pack Nutrition Labeling (FOPNL) Regulation. The policy aims to transform people’s consumption behaviour concerning packaged or processed foods and beverages. The draft regulations for FOPNL propose a star-rating system to convey nutritional information about packaged food products to consumers.
Under the proposed FOPL policy, packaged food and beverages will have a star rating at the front of the packaging. The star rating will be marked as “one-star food”, “two-star food”, and, therefore, “healthy food”, “less-healthy food”, and so on., based on their fat, salt and sugar content. However, this regulation has raised concerns among various stakeholders, especially the MSME sector.
The Indian Seller Collective, an umbrella body of trade associations and sellers, has opposed this proposal of FOPNL. The body claims that FOPL regulations will negatively impact the business of the MSME sector if Indian ethnic foods were to be classified as “unhealthy.”
They state that this regulation will create unfavourable circumstances for Indian players and enable western packaged food to capture the Indian market. Since western MNCs already have experience abiding by FOPL regulations in other countries. Moreover, they’re better equipped with resources to modify the nutrient content to secure a better health star rating.
The nutritional researchers assert that the Health Star Rating (HSR) system “misrepresents nutritional science.” They argue that the basis of the HSR system can be manipulated to offset negative attributes of the product, such as calories, saturated fat, total sugar and sodium, by adding nuts and fruits to the existing product to gain the desired health star rating. The HSR system can potentially confuse the consumers as stars can be used as a promotional tool, thus leading to an utter failure of FOPL policy.
Furthermore, the FOPL regulations have overarching economic concerns, indicating a severe blow to the MSME enterprises. The food processing industry provides various local and regional players a livelihood opportunity by allowing them to sell their indigenous food items in a packaged form through existing sales channels.
These indigenous food items include snacks like dhokla, bhujiya and bhakarwadi; sweets like gulab jamun, barfi and laddu or beverages such as nimbu pani and jaljeera. These traditional Indian items are made using salt, sugar and fat, which are the primary variables in calculating the health star rating.
That being the case, the proposed mathematical calculation in FOPL regulation and HSR system disregards Indian cuisine leading to consumers resorting to western packaged food. In such a case, consumers will prefer zero-sugar cold drinks over jaljeera or nimbu paani, which even we know is unhealthy.
Therefore, this abrupt roll-out of impractical FOPL policy will cut off the supply of Indian-made products and give rise to multinational food companies that can use substitutes and chemicals to get better Health Star Rating and penetrate the Indian food market.
The global players have longed to enter the Indian food market since the food processing industry in India accounts for 32 per cent of the country’s total food market. In addition, most developed countries have started shifting to consuming unprocessed or minimally processed food, another reason for MNCs to tilt toward the Indian market.
The proposed FOPL regulations pose a severe threat to the country’s MSME sector and the citizens as it fails to fulfil its primary objective, i.e., “Helping people to choose healthy food”. Moreover, the Indian economy relies on the MSME sector, where almost 79% of the food processing market is dominated by MSME players, who will face drastic consequences due to FOPL regulations. Therefore, the Indian government should consider re-crafting these FOPNL regulations that would better suit the Indian MSME sector.
