New labeling legislation introduced in Hong Kong will affect hundreds of millions of dollars worth of prepackaged food and beverages exported from the US as nutrition claims will need to be re-written, according to a new report.
The market access of thousands of US products sold in Hong Kong is “threatened” by the new regulations which will take effect on July 1 2010, the United States Department of Agriculture’s Foreign Agricultural Services said.
The hardest hit will be the fastest growing categories of health, organic, and snack foods and some retailers have already suspended imports of new US products with nutritional claims, while others are taking a "wait and see" approach, it was claimed.
Hong Kong is currently the ninth largest market for US grocery exports, with 2008 sales 77 percent ahead of 2007 levels and expected to reach $1bn by the end of the year. The US is Hong Kong's second largest supplier of food.
The new regulation requires all prepackaged food sold in Hong Kong to label energy plus seven nutrients - protein, carbohydrate, fat, saturated fat, trans fat, sodium and sugars.
However, the report said: “Hong Kong’s nutrition labeling regulation is unique, meaning all imported foods making nutritional claims from all sources will have to be re-labeled for the Hong Kong market.
“While the US requires the labeling of 15 nutrients plus energy, products manufactured for the US do not meet with the Hong Kong nutrition labeling requirements due to different nutrient definitions, rounding practices, and recommendations for daily consumption.”
One example of this is Hong Kong’s standard for “low fat” which is 3gm per 100gm of food, while the US standard is 3gm per serving. It means that a “low fat” US product may not be allowed to make a low fat claim if it is to be sold in Hong Kong.
The report points out that no major food supplying countries have nutrition labeling requirements equivalent to Hong Kong’s, which are stricter than Codex recommendations. It said virtually all US and competitor products carrying claims will require labeling changes and/or nutrient testing.
The report added: “The trade estimates the impact of the regulation will be a significant reduction in the variety of goods in the market, especially new-to-market products.”
Cost to industry
The nutrition labeling regulation was passed by Hong Kong’s Legislative Council on May 28 this year with a grace period of about two years.
However, there are indications that major retailers have notified their suppliers that they would only accept products with nutrition labels complying with Hong Kong’s new regulation after July 1, 2009.
This is expected to result in a sudden surge in demand for food composition testing, according to the report, but it is “questionable” whether Hong Kong’s laboratory capacity can allow for this.
According to the Hong Kong government’s accredited laboratory directory, there are 15 laboratories there which conduct food testing and only five perform nutrient composition analysis. The nutrient testing for each food sample costs around $643 and will take two weeks.
It is estimated that there are currently 65,000 packaged products in the market, which could be reduced by an estimated 25,000 products, especially those new-to-market products, by the new regulations.
Products selling less than 30,000 units a year can apply for an exemption, for a fee, provided that the products do not carry any nutritional claims.
Hong Kong authorities say that providing nutrition information on food labels “is an important public health tool to promote a balanced diet as food label is an important communication channel whereby consumers can obtain specific information on individual food products”.
The aim of the scheme is to assist consumers in making informed food choices, encourage food manufacturers to apply sound nutrition principles in the formulation of foods and regulate misleading or deceptive labels and claims.
The USDA said that a coalition of government, industry, and consumer representatives will continue to work with the Hong Kong government to reduce the negative trade impact of this legislation.