‘One mistake can impact next funding round’: Food safety crackdown puts compliance ahead of growth in F&B boardrooms
Food safety is no longer just a compliance issue for packaged food and beverage companies in India. With regulatory scrutiny growing, issues like product labels, safety standards and claims are currently being discussed at the top levels. For example, many CEOs and start-up founders are now taking charge of such matters that previously rested with functional heads.
A chief executive of a large packaged-food company told Economic Times that in a recent leadership townhall last week, they only discussed about labelling and compliances and not growth or inflation.
Executives said companies are even diverting funds from functions such as marketing to step up regulatory compliance checks in minute detail.
Ashwin Bhadri, founder of Equinox Labs, a prominent food, water and environmental testing organisation, noted, “Start-up founders of various clean-label or frozen foods are reaching out to personally step up frequency of compliance audits, many to release these online so anyone interested can see these. One mistake that gets called out could even impact the next round of funding.”
One example would be FSSAI’s mandatory water potability testing requirement, under which food and beverage companies must ensure their water meets the prescribed IS 10500 quality standards.
“Most companies had been opting for cheaper tests. But now this is changing, and they’re opting for the IS10500 test,” he added.
Noting that lot is at stake and the risks are huge, Angshuman Bhattacharya, partner and national leader, consumer products and retail, EY-Parthenon told ET, “There’s fear factor among brands because all the hard work done could be eroded. Also, those days are gone when companies could say they control samples at factories, but blame the retailer if the product malfunctioned at the retail level.”
Food safety campaign under Tukaram Mundhe
The heightened inspections campaign was sparked a few months ago after the appointment of a reformist bureaucrat at the Food and Drug Administration in Maharashtra, Tukaram Mundhe. Since then, it has spread nationwide from Jammu and Kashmir to Karnataka.
The Maharashtra FDA has already conducted over 3,000 spot checks since May suspending operations everywhere from exclusive clubs to fast-food chains.
Five-star establishments, including New Delhi’s JW Marriott and Mumbai’s historic Cricket Club of India, were among those flagged this year for failing to meet hygiene standards. Local management for the JW Marriott said last week that they are fully cooperating with authorities and will address any issues identified. The Cricket Club did not respond to a request for comment.
The stricter countrywide inspections follow global concerns over India’s food safety standards. Japan banned imports from India of items such as mangoes this year due to alleged pest-control lapses. In 2024, countries including Singapore banned products from some Indian spice brands due to concerns around possible contamination with carcinogenic pesticides.
