CFDA issues Measures on Investigations involving Online Food Safety

On 13 July 2016, the China Food and Drug Administration (“CFDA”) issued the Measures for the Investigation and Handling of Illegalities of Online Food Safety 2016, which will take effect on 1 October 2016.

The measures apply to the investigation and disposition of illegal activities of:

  • Third party online platform providers that engage in online food transactions in Mainland China.
  • Food manufacturers and distributors that distribute food online through their own website or through a third party online platform.

The measures require third party online platform providers to:

  • Record-file with, and obtain a filing number from, the municipal or county level subordinate of the CFDA.
  • Verify the business licence, food production licence and operating permit of online food manufacturers and distributors.
  • Establish administrative systems for:
    • fielding consumer complaints;
    • registering online food manufacturers and distributors;
    • archiving online food transactions; and
    • inspecting food products sold on the online platform.
  • Cease online food transactions where they discover a violation of food safety rules.

The measures require online food manufacturers and distributors to:

  • Obtain mandatory food production and distribution licences and prominently display them on the home page of their website.
  • Record-file with, and obtain a filing number from, the municipal or county level subordinate of the CFDA.

In addition to the food production and distribution licences, online food manufacturers and distributors selling health foods, foods for special medical purposes (“FSMPs”) and infant formula distributed through an online platform, must also display their product registration certificate or filing record, advertising approval number (if any), and link to the data search page of the CFDA website. One category of FSMPs (that is, nutritionally complete foods with a specific formulation) must not be distributed online. All health foods must carry a warning stating “not a substitute for medicine”.

Market Reaction

Chen Bing, Partner, King & Wood Mallesons, Shanghai

“The measures are a new implementing regulation introduced by the CFDA following the new Food Safety Law, which was issued in 2015. The measures impose compliance obligations on food manufacturers and operators who participate in online food trade, in addition to providing detailed procedures for administrative investigations on unlawful activities relating to online food sales, including jurisdiction, investigation steps and penalties. The measures also specify obligations, such as information disclosure, orders to cooperate with the CFDA, and for the first time record-filing with the local FDA, of online platforms including both third party online platforms like Taobao and those set up and owned by the brands. As an important complement to the existing legal system, the measures will have a material impact on standardising online food trade activities.”

Action Items

General Counsel for food manufacturers and distributors that engage in online trade should work with business colleagues to ensure compliance with the information disclosure obligations and the licensing and record-filing requirements. Likewise, counsel for online platform providers should take steps to ensure their clients adhere to the compliance obligations under the measures, including record-filing and the establishment of administrative systems, as well as their obligations to cooperate with government investigations.