Enterprises lose competitive advantage due to regulations on enhancing micronutrients in food

Overview of the conference. Photo: T.D

Enterprises face numerous challenges

This information was shared at the conference “Feedback on Policies to Enhance Micronutrients in Ingredients Used in Food Processing,” co-organized by the Ho Chi Minh City Food Association, the Vietnam Association of Seafood Exporters and Producers, the Vietnam Cashew Association, the Phu Quoc Fish Sauce Production Association, the Transparent Food Association, and the Vietnam High-Quality Goods Business Association on July 15.

At the conference, Ms. Ly Kim Chi, Chairwoman of the Ho Chi Minh City Food Association (FFA), mentioned that on January 29, 2016, the government issued Decree No. 09/2016/ND-CP (Decree 09), which mandates the fortification of food with micronutrients. Specifically, clauses a and b of Article 6, Section 1 state that “Salt used in food processing must be fortified with iodine” and “Wheat flour used in food processing must be fortified with iron and zinc.”

This regulation has caused immense concern and difficulties for the food industry community for nearly eight years, affecting both domestic consumption and food processing for export. Moreover, this regulation has proven ineffective in improving micronutrient levels for the population and is contrary to the recommendations of the World Health Organization, leading to potential health risks for groups with adequate and excessive micronutrients.

After numerous recommendations from enterprises, on May 15, 2018, the government issued Resolution No. 19-2018/NQ-CP (Resolution 19), directing the Ministry of Health to research, revise, and supplement Decree 09 towards abolishing the above regulation. Instead, it should merely encourage enterprises to use, not mandate the addition.

However, the business community and food industry associations were very surprised and disappointed with the draft amendment to Decree 09 by the Ministry of Health. The draft essentially maintains the problematic provisions of Decree 09, Ms. Ly Kim Chi emphasized.

Sharing the same view, Mr. Vu The Thanh, a member of the Scientific Advisory Board of the Ho Chi Minh City Department of Food Safety, believes that according to the Ministry of Health’s regulations, enterprises must use iodized salt in product processing. This causes technical difficulties for enterprises, such as the loss of iodized salt: many types of food using iodized salt lose too much iodine when processed at high temperatures, leaving no iodine in the finished products, such as canned goods, instant noodles, sterilized sausages. Generally, it is ineffective.

Representative of the enterprise speaking at the conference. Photo: T.D

Loss of export advantage

Specifically, this regulation poses difficulties for the export of goods by enterprises. Ms. Vu Kim Hanh, Chairwoman of the Vietnam High-Quality Goods Business Association, mentioned that for the past eight years, Vietnamese enterprises have been forced to use iodized salt in food processing, while many countries prohibit food with added iodine. For example, Japan, Australia... require enterprises to have a certification of not using iodized salt to be allowed to export.

Enterprises are forced to choose a solution where they produce both export goods and domestic goods on the same production line (no longer having any better option) and must absolutely avoid cross-contamination as export markets do not require the addition of micronutrients, causing significant time and cost expenses.

Sharing from the actual experiences of enterprises, Mr. Pham Trung Thanh, Head of the Foreign Affairs Department of Acecook Vietnam Joint Stock Company, said that the company has always complied with the regulations since the decree was issued.

However, the company has faced many issues. These include the costs incurred in avoiding cross-contamination between different ingredients used for producing consumer products for domestic and export markets... resulting in an additional annual cost of 13.5 billion VND.

But a new legal issue for exports arises from the reality at Acecook Vietnam. Specifically, Hao Hao noodles, the leading brand, hold the number one market share in the domestic market and are exported to over 30 countries, bringing in an export revenue of 40 million USD annually. In the long-term vision of the company, Japan is among the strategic export markets, but in Japan, iodine is not on the list of micronutrients allowed according to Japanese Food Safety Law.

Furthermore, iron and zinc must also adhere to very strict standards. Specifically, zinc is not permitted to be added to foods other than infant formula and foods used to maintain health according to specific regulations in Japan.

Therefore, Hao Hao noodles exported to Japan must use ingredients without the added micronutrients mentioned above and must organize separate production from Hao Hao domestic products. This makes the production efficiency of Hao Hao noodles for export to Japan low, increasing many costs.

Mr. Nguyen Phuc Khoa, Chairman of the Board of Directors of Vietnam Livestock Industry Public Company (VISSAN), believes that the regulation of adding micronutrients is unclear to consumers. This not only increases the costs and prices of enterprise products but also reduces the competitiveness of products in both domestic and foreign markets.

Accordingly, at the conference, experts and enterprises believe that Decree 09 should be amended to not mandate but only encourage the addition of iodine to salt used in industrial food processing. It should also encourage the fortification of iron and zinc in wheat flour used in industrial food processing.