Online Food Trade will be Supervised in China

Online food trade becomes more and more popular in China. However, with the rapid development of online food trade, it came along with different kinds of Internet security regulatory issues, like the lack of supervision or even regulatory gaps. In order to regulate the behavior of online food trade, strengthen the supervision and management of online food sales, CFDA issued the Administrative Measure on the Supervision of Online Food Trade (exposure draft) on August 18th 2015. The public can present opinions and advice for the measure before September 18th this year.

This new measure stipulated that online food trade refers to the business of selling food (including edible agricultural products, food additives) on the Internet. Operators engaged in the online food trade should comply with this measure. But the producers who have the food production license, to sell their food products on the Internet do not belong to the range of this measure.

For the supervision, this new measure regulated that FDA departments are in charge of the online food sales. In addition, social co-governance is also an important regulatory mean for the supervision of online food.

1. Food operating license becomes the basic requirement of online food operators
Operators must obtain the food operating license or notification certificate before engaged in the online food trade, otherwise, the business is forbidden. This provision will be a severe blow to many operators without any legal licenses.

2. Operators of online food should establish a good institutional system
This measure explicitly requested that operators of online food should set up the systems of incoming inspection, sales record, food recalls, record keeping, negotiation and reconciliation etc. And they should provide invoice to consumers, which can be in paper or electronic form. Thus, the new measure plays a very important role in regulating the online food sales behaviors. For the operators, they should establish and improve their operating systems timely according to the requirement, to make sure that the business is legal.

3. Information should be public, the false propaganda is expressly prohibited
The business license, operating license or notification certificate, and food qualified documents all should be publicized on the conspicuous position of the main website page. Meanwhile, information on the website should be authentic and accurate. Disease prevention, functional treatment, and other false propaganda are not allowed. For example, “not contain any food additives”, ”no pollution”, “detoxification”, “nourish the brain”, “ lose weight”, “treat myopia” and other similar claims are prohibited. Otherwise, the maximum fine can be 30,000 RMB.

4. The basic requirements for the third-party platform of online food trade
The third-party platform of online food trade should establish a comprehensive management system to ensure the safety of online food sales, including operator review and registration, establishment of food business archives, food information review, trading and management rules on the platform. In particular, if the third-party platform cannot provide the true operator information, when there is any civil compensation, the platform providers shall bear compensation liability at first. And if the platform providers do not take any necessary measures when they know or should know the illegal behaviors of the operators on their platform, they will bear the joint liability.

5. Authentication from third-party agency is encouraged
The measure encouraged third-party platform to introduce third-party agency to provide the professional services like identity authentication of online food operators, quality and safety authentication, food sampling and evaluation, credit evaluation, information management, etc. This encouragement can help third-party platform of online food trade to improve the management level of food safety effectively.

6. Explicit punishment regulations
The measure has clear legal responsibility and punishment regulations, and the maximum fine would reach 30,000 RMB. For the third-party platform of online food trade, if the violation is serious, they may even be transferred to the telecommunications administrations. Therefore, operators and third-party platform providers of online food trade both should pay more attention to the new published measure, and make sure all behaviors are in compliance with this measure.