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A Trip Around the Food Law World
Introducing New Food Products in the Global Marketplace
By Christine M. Castellano
As challenging as it may be to introduce a new food product in the United States, it is even more challenging when your target market is not just the United States, but the world. In today's global marketplace, introduction of new food and beverage products is rarely confined to a single country. This means that everything that goes into a successful food product launch—from demographic and market research to product design, regulatory approval, and market introduction—must be navigated in each country of interest.

This article is designed to provide a perspective on international food regulation challenges faced by the first timer—a company that has not recently engaged in substantive new product introduction and that, as a result, does not have internal resources dedicated to this function.

Rationale for Food Regulation
Our journey begins with an understanding that not all countries regulate food products in the same manner. In establishing food registration and approval requirements, each country seeks to protect its citizens against dangerous or unsuitable products. Generally, this goal is achieved by requiring some form of registration of the new food, ingredient, or additive, frequently supported by safety testing or certifications. This can be a challenging process in any single country. It is even more complex when a company wants to launch a product in multiple countries with multiple—and often contradictory—regulations. For example, expensive and detailed animal or human food safety studies that suffice in one country might be deemed insufficient in the next—a regulator might want assurance that the product's safety has been proven for citizens of their particular country.

On the List?
In some cases, your journey might be easy because your product is already recognized by the regulators as approved. This recognition may take two forms. Some countries regulate by means of positive lists—anything expressly listed is acceptable. No further testing or proof of wholesomeness is required. Your product, however, must match the specifications of the listed product.

Others rely on negative lists—listed ingredients are prohibited. If your product is not included on a negative list, it is presumed safe. Generally, there are only minor regulatory hurdles (e.g., manufacturer registrations) to clear. Again, safety testing is not required.

Not all countries have a list system, however. Further, a truly novel product might not be included in either a positive or a negative list, or might not meet the specifications for a listed product. In this case, specific approval from the regulatory body must be sought. The approvals required may depend on whether the product is considered an ingredient, an additive, or a food; and these definitions can vary by country. Safety testing, which frequently involves human or animal testing, is generally required.

Whether your product already has been generally recognized as safe (GRAS) in the United States or approved by the Codex Alimentarius Commission (in the EU) may be informative, but it is not binding on other countries. As a result, you may be able to use the scientific studies underlying U.S. or EU approvals to support your regulatory approval in another country, but you also will have to satisfy the local regulators. In some cases, this may involve additional testing or certification.

Health Claims and Labeling
Each country also will likely have specific laws regarding product labeling and health claims (e.g., "promotes digestive health"). Unfortunately, definitions differ from country to country. For example, if you wish to know whether your product can be marketed as a fiber or as natural, you need to understand how the terms "fiber" and "natural" are defined in each relevant country. At times, these definitions might be contradictory, making a consistent global marketing approach difficult. At other times, the definitions and requirements may be unclear or inconsistent, or may be guided at least in part by public sentiment (as is discussed in the example of genetically modified organisms below).

Timing Is Everything
The timing needed for approvals also can vary greatly, from months to years—another challenge to a global commercial rollout. In companies without internal resources, food regulatory issues must be balanced against the need to control spending on outside legal counsel and consultants. This calls for a global strategy, with key regulatory personnel as integral members of the product launch team, and a detailed commercial marketing plan that allows prioritization of efforts based on market attractiveness and planned launch dates.

Across the Pond—European Markets
Many U.S. companies view the European market as a priority. Consumers share similar preferences in food and beverage products. As we begin our international food regulatory journey, the first stamp in our passport therefore requires that we understand the different players in the European food regulatory arena.

The Codex Alimentarius Commission was formed in 1963 and is a joint commission of the United Nations Food and Agriculture Organization and the World Health Organization. Codex is responsible for the development of international food standards, with scientific expertise provided by the Joint FAO/WHO Expert Committee on Food Additives (JECFA).

These international standards do not replace or create national rules. Each EU member state establishes its own food regulatory regime. The European Food Safety Authority (EFSA) cooperates with similar bodies in each member state to provide scientific analysis. EFSA operates independently of JECFA and Codex and does its own scientific research.

Once a product is approved in an EU member state, there are protocols for reciprocal recognition. Strategic decisions must be made, however, as to where safety testing should be conducted (remembering that some regulators have a bias toward testing conducted in their own jurisdiction) and in which EU member state to initiate testing—in those with the most rigorous standards (raising the specter of failing to obtain approval, or of additional costly testing), with the least rigorous standards (suggesting that it might be more difficult to obtain reciprocal admission without, again, additional costly testing), or where language concerns are limited (e.g., for U.S. companies, the UK).

Other Markets
A truly global launch will not be limited to the United States and the EU, so more passport stamps are required for our journey. Here, newcomers find significant complexity. For example, in Argentina, standards are set in the Codigo Alimentario Argentino according to specifications issued by the MERCOSUR countries (Argentina, Brazil, Uruguay, and Paraguay). Brazil also has specific national standards. In Australia and New Zealand, national standards are compiled by Food Standards Australia/New Zealand. In each country, products not listed must be specifically authorized.

In Asia, Malaysia uses a negative list system, creating a presumption that all foods not listed are permitted. South Korea, by contrast, uses a positive list, so any foods not listed are prohibited.

Culture also influences food regulation. In Pakistan, for example, there are prohibitions against products containing pork and alcohol. As in many countries, the Pakistani food ordinance also prohibits products considered unwholesome, injurious to health, or unfit for human consumption.

Local regulatory approval may be easier if a product previously has been approved in the United States or EU. Both Argentina and Brazil will look to Codex for guidance. In some cases, the failure of a product to obtain GRAS or Codex approval might be seen as probative on local regulatory approval, or as evidence of a violation of general prohibitions against unwholesome or unfit foods. Great care must be taken if a product has a negative history in the United States, EU, or countries such as Japan. Frequently, testing must be conducted to directly rebut the negative perception.

Case Study—GMOs
The use of genetically modified organisms (GMOs) in food illustrates the challenges surrounding international food marketing. The science of inserting specific genes into different organisms, allowing the organism to produce proteins not previously produced and, consequently, new traits, has been around since the 1960s. Genetic modification was seen as a way to improve crop yields; create resistance to insects (thereby reducing the need for chemical pesticides) and disease; and increase tolerance to climatic conditions such as drought or flood. Genetic modifications also were seen as providing potential health benefits (e.g., "golden" rice was genetically altered to combat vitamin A deficiency, which leads to blindness and lowered immune response).

For the most part, the U.S. agricultural complex enthusiastically accepted GMOs. In 1994, the Flavr Savr tomato, produced by California company Calgene LLC, was genetically modified to be resistant to rotting. It was sold commercially in the United States with FDA approval. By 2006, the U.S. Department of Agriculture estimated that 90 percent of the soybeans, 90 percent of the cotton, and 73 percent of the corn grown in the United States were genetically modified. GMO crops are now grown in Argentina, Brazil, Canada, China, India, and South Africa.

Public Outcry. GMOs have detractors as well, and here, as in many areas of food regulatory law, public perception played a role in the creation of local regulatory regimes. For example, in 1999, protestors in the United States dressed in monarch butterfly costumes in order to dramatize what they viewed as negative environmental consequences. GMOs were portrayed as "Frankenstein foods." Organizations such as Greenpeace took a strong stance against GMOs:
The introduction of genetically modified (GM) food and crops has been a disaster. The science of taking genes from one species and inserting them into another was supposed to be a giant leap forward, but instead they pose a serious threat to biodiversity and our own health. In addition, the real reason for their development has not been to end world hunger but to increase the stranglehold multinational biotech companies already have on food production.

Web site—Greenpeace UK: www.greenpeace.org.uk/gm
Consumer groups also challenged the introduction of what they viewed as science with unknown consequences:
The current generation of genetically modified (GM) crops unnecessarily risks the health of the population and the environment. Present knowledge is not sufficient to safely and predictably modify the plant genome, and the risks of serious side-effects far outweigh the benefits. We urge you to stop feeding the products of this infant science to our population and ban the release of these crops into the environment where they can never be recalled.

Web site—Organic Consumers Association: www.organicconsumers.org/gelink.cfm
Lists and Labels. Countries around the world began regulating GMOs. Those regulations generally came in one of two forms, although in some cases both types of regulation co-exist. The first form of regulation, used in the United States and the EU, is the designation of approved and unapproved varieties of GMO. Only approved varieties are acceptable for human food.

Labeling is the second key form of regulation. Countries in the EU and Japan, for example, mandate that products containing GMOs be specifically labeled. Many countries' labeling laws, however, contain exceptions. For example, in South Korea, only food ingredients that might contain residual proteins must be labeled. Many countries' regulations also contain exceptions for adventitious, or accidental, contamination, provided that it does not reach certain thresholds, which vary by jurisdiction.

Accordingly, a product might require labeling in one country, but not in another, a real problem if a company has export sales or sells ingredients that are incorporated into consumer products. Proponents of labeling argue that consumers have a right to know and to choose between GMO and non-GMO products. Opponents, however, maintain that there are no known health risks and that labeling increases costs to the industry and, ultimately, to consumers.

Practical Concerns. Critical practical concerns quickly arose. A short visit to Brazil provides insight.

In 1999, the commercial growing of GMOs in Brazil was banned. As a result, by 2001, corn grown in Brazil demanded a $6-7 premium per ton, this record high resulting from the country's strict non-GMO policy. Between 2002 and 2005, and notwithstanding the government's ongoing prohibition, genetically modified corn and soy were repeatedly found in southern Brazil. Speculation resulted as to its origin. Was it the result of black market seeds or of smuggling from neighboring countries, many of which allowed the planting of GMO crops? Between 2003 and 2005, the government began relaxing its restrictions on soy, and by 2007, GMO corn was allowed.

Even in other countries, practical issues exist. The food industry infrastructure in many countries generally does not support separation of GMO and non-GMO varieties. Crops are frequently commingled after harvest—in transport or in grain elevators. A 2007 American Corn Growers Foundation survey found that only 26 percent of U.S. grain elevators were segregating GMO and non-GMO corn, making it difficult to source non-GMO varieties with any degree of certainty. Even if a crop is delivered direct from farm to factory, the food company relies on certifications provided by the farmer. While it may be possible to obtain written certifications from large corporate growers, when small family farms or individuals are involved, as in many foreign countries, certifications are difficult to obtain and even harder to enforce. Further, cross-pollination makes it hard to guarantee GMO status based on the boundaries of a particular farmer's land.

Flaws in the System. Although opinions as to the desirability of GMOs may differ, it is clear that the food regulatory regime in the United States has not always functioned in an ideal manner. In 2002, the StarLink variety of genetically modified corn, which was not approved for use in human food, was found in taco shells for sale in retail establishments. That same year, Zambia refused U.S. corn aid during a famine due to concerns about genetically modified varieties, and later was joined by Angola, Malawi, Mozambique, and Zimbabwe. In 2005, it was discovered that an unapproved Bt 10 corn variety had been sold for several years under the mistaken belief that it was the approved variety Bt 11. These problems heightened the public concern, leading to calls for greater regulation, more testing (even though scientific testing was itself evolving), and product labeling (or, in extreme cases, a desire to remove from store shelves all products that were not certified non-GMO).

Science and Regulation. The science surrounding GMO crops continues to evolve—although not as quickly as the public opinion surrounding it. New GMO crops or new strains might arise at any time, and companies must stay up-to-date on the current status of their raw materials.

Similarly, companies struggled with the ability of scientific testing to keep pace with the law. A type of testing known as PCR (polymerase chain reaction) testing looks for novel DNA introduced into raw materials, such as corn. Unfortunately, with highly refined products, various manufacturing processes can either degrade the DNA or physically remove it. Without DNA, the test cannot determine whether the original raw material was genetically modified.

Further, testing cannot distinguish between "stacked" strains, where more than one GMO might be present (e.g., is a feed pellet produced from corn variety AB, or from a mixture of corn variety A and corn variety B).

Identity Presentation. One way in which companies try to mitigate against these risks, and comply with the myriad of labeling laws, is by establishing identity preservation programs. These programs demonstrate diligence in the procurement and manufacturing of product from non-GMO raw materials. They involve a variety of good manufacturing practices and controls, as well as testing of both raw materials and finished product.

The identity preservation approach, as with other food regulatory issues, requires companies to balance risks and rewards. First, the company must determine to what standards it seeks to be held—those of its home country, its major export markets, the EU, or the markets of its customers. It must then determine how far it can go to demonstrate compliance with those standards. For example, many customers are not willing to pay increased ingredient prices that would result from PCR testing of every ingredient batch produced. This is especially true in today's economy, with rising commodity and food prices of global concern.

A Successful Global Launch
The global GMO regulatory patchwork—with elements of science, public opinion, and practical considerations—illustrates the challenges faced by first timers in the international food regulatory arena. How can a company get its new food product to market without spending all of its anticipated potential profits on outside legal counsel or consultants? To some degree, the challenges faced depend on the nature of the product. Thus, an internal review of the existing science and public opinion, if any, is essential. This review should be ongoing through the product launch, so that the company is prepared for any regulatory hurdles that might arise. A well-developed marketing plan, with input from in-country professionals and a prioritization of markets, also is key. The regulatory budget should be linked to this plan. This allows for the prioritization of regulatory approval processes. When costs are incurred, they support planned product launches in markets and countries viewed as desirable from a business perspective (an approach that also can be taken with regard to trademark registrations and patents).

It also helps to have local personnel, even if not experts in the regulatory arena, do initial fieldwork on governmental requirements and timing by reviewing Web sites, speaking with relevant agencies, and reviewing written resources made available by the local regulatory body. Local personnel can monitor any public sentiment relating to the proposed product. Marketing or scientific testing can be designed to address any concerns. When this is not possible, or if dealing with a particularly unique product or one regarding which regulatory hurdles are anticipated, it might make sense to partner with a local agent who can assist with the regulatory process (ensuring that proper due diligence is conducted so as to shield your company from risks inherent in such a relationship, including those under the Foreign Corrupt Practices Act).

Through strategic planning and careful prioritization, it is possible for a successful regulatory trip around the world.

Food Regulatory Bodies Around the World


Codex Alimentarius Commission
www.codexalimentarius.net

Joint FAO/WHO Committee on Food Additives
www.who.int/ipcs/food/jecfa/en/index.html

European Food Safety Authority
www.efsa.europa.eu

Food and Agriculture Organization of the United Nations
www.fao.org

Argentina—Instituto Nacional de Alimentos, a part of the Administración Nacional de Medicamentos, Alimentos y Tecnología Médica (Web site in Spanish)
www.anmat.gov.ar

Australia/New Zealand—Food Standards Australia/New Zealand
www.foodstandards.gov.au

Brazil—Agência Nacional de Vigilância Sanit#225;ria (Web site in Portuguese, Spanish, and English)
www.anvisa.gov.br

Canada—Health Canada
www.hc-sc.gc.ca/index-eng.php

China—Ministry of Health
www.moh.gov.cnenglish.gov.cn/2005-10/09/content_75326.htm (English)

India—Ministry of Food Processing Industries (English)

mofpi.nic.in/food&health/

Japan—Japan External Trade Organization (English)
www.jetro.go.jp/en/reports/regulations/

Mexico—Comisión Federal para la Protección contra Riesgos Sanitarios (English language version)
www.cofepris.gob.mx/wb/cfp/ingles

South Korea—Korea Food & Drug Administration (Web site in Korean; limited items such as Food Additives Code available in English)
kfda.go.kr/index3.html

Thailand—Food & Drug Administration (English language version)
www.fda.moph.go.th/eng/index.stm


Resources on GMOs


American Medical Association
www.ama-assn.org/ama/pub/category/13595.html

Canada: Biotechnology: Agricultural Biotechnology Report 2006
www.fas.usda.gov/gainfiles/200609/146208866.doc

Pew Initiative on Food and Biotechnology (reports, fact sheets, etc.)
www.pewtrusts.org

U.S. Department of Agriculture (Agriculture, Research and Science, Agricultural Biotechnology)
www.usda.gov
Castellano is associate general international counsel at Corn Products International, Inc., in Westchester, Illinois. Her e-mail is christine.castellano@cornproducts.com.

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