The organised food sector is expected to benefit from the Food Safety and Standards Act that comes into force by the end of this year as it will spur sales of branded products, according to industry experts. But the unorganised sector, though big in size, would feel the brunt.
The Centre told the Supreme Court that it would bring into force the Food Safety and Standards Act by the year-end. The Act, which was passed in August last year and received assent from the President, has not yet been notified.
A Hindustan Unilever spokesperson said, "It's a progressive piece of legislation that will bring science-based and risk assessment-based regulatory regime for foods in India. It should provide consumers safe and varied variety of food products in line with the global market."
A Coca-Cola India spokesperson declined to comment, while the PepsiCo spokesperson was unavailable for comment.
In recent times, issues such as worms in Cadbury chocolates and traces of pesticides in beverages made by Coca-Cola and Pepsi have drawn a lot of attention.
The organised players are welcoming the enforcement of this Act as it would take a bigger toll on the large unorganised sector. "The Act would give consumers another reason to rely on branded food companies for better quality products," said a senior industry executive.
Among the many existing laws that affect the food industry in India, are the Prevention of Food Adulteration Act, 1954 (PFA) and Prevention of Food Adulteration Rules, 1955.
Despite these regulations in place, incidents of bad quality products in the market have been reported by consumers. Companies say some of these incidents take place owing to systemic failures not directly under the control of companies, and are forced to take moral responsibility for the same.
If the new law is notified, the companies would be driven to look deeper into their business processes at two levels.
At the first level, companies will have to look at how the value chain affects the quality of food products, and in the second level, they will need to look at how the external system affects the food products after it goes out of the company and before it reaches the consumers.
"Taking responsibility of quality once the food products go out of the company is commercially unviable," said another industry executive.
