Replies to LegCo questions

LCQ7: Nutrition labelling

Following is a question by the Dr Hon Vincent Fang and a written reply by the Secretary for Food and Health, Dr York Chow, in the Legislative Council today (June 25):

Question:

The Food and Drugs (Composition and Labelling) (Amendment: Requirements for Nutrition Labelling and Nutrition Claim) Regulation 2008 provides for a small volume exemption scheme for food products with annual sales volume not exceeding 30,000 units. The registration fees for small volume items are $345 (for new application) and $335 (for renewal of exemption). The authorities have indicated that the fees are set on a full-cost recovery basis. In this connection, will the Government inform this Council:

(a) of the details regarding the handling of the above applications by the authorities, including whether or not capital investment is involved and whether or not designated persons are required to handle these applications, as well as the estimated operation cost per year;

(b) how the authorities arrived at the above fee levels, and whether they have projected the number of types of prepackaged food for which the food trade will apply for small volume exemption each year; if they have, of the information or criteria based on which the projection is made;

(c) given that the above fees are set on a full-cost recovery basis, whether the authorities will raise the fees when the number of applications is lower than their projection, which will lead to the situation of "expenditure exceeding revenue", or lower the fees when the number of applications is higher than their projection, which will lead to an increase in revenue; and whether the authorities have drawn up a mechanism for reviewing the fees; and

(d) whether the authorities will make reference to the current application system for certain commercial documents, such as the Certificate of Origin for textile products, and consider handing over the registration work on small volume exemption to those trade associations which can undertake the work at a lower cost, so as to reduce the Government's administrative expenses?

Reply:

Madam President,

(a) The Administration would like to first extend sincere gratitude to the Hon Vincent Fang and the trade for their valuable views and contribution towards the nutrition labelling scheme. The Hon Vincent Fang and the trade suggested the Administration to issue the Technical Guidance Notes on the nutrition labelling scheme as soon as possible to help the trade make active preparation for the new requirements, which will come into effect on July 1, 2010. After rounds of consultation with the trade on the specific contents of the Technical Guidance Notes, the Centre for Food Safety (CFS) issued the draft Technical Guidance Notes and uploaded it onto the CFS website for reference and comments by the trade when the Food and Drugs (Composition and Labelling) (Amendment: Requirements for Nutrition Labelling and Nutrition Claim) Regulation 2008 (the Amendment Regulation) was gazetted in April 2008.

Following the passage of the Amendment Regulation, the CFS further discussed and confirmed the contents of the Technical Guidance Notes with the trade at the technical meeting on June 18, 2008. We will finalise the draft Guideline Notes by July 2008. The CFS will, through various channels (e.g. workshops), help the trade adapt quickly to the changes, so as to ensure compliance with the legal requirements on nutrition labelling when the grace period ends.

According to the Amendment Regulation, importers and manufacturers may apply to the Director of Food and Environmental Hygiene for an exemption from the nutrition labelling requirements set out in the Amendment Regulation in respect of any prepackaged food with annual sales volume not exceeding 30,000 units and for which no nutrition claim is made. Applications can be made by sending duly completed application forms to the Food and Environmental Hygiene Department (FEHD) by post, by fax or in person or through the web-based platform. FEHD staff will check the information submitted, including the applicant's particulars, the company information, and details of the food product such as the brand name, name of the food product, net weight/volume/count, country of origin, particulars of the manufacturer or packer, names and addresses of the distributors/retailers, label, photos and bar code of the product, etc. When vetting an application, FEHD staff will also look into the past records of the applicant to verify, inter alia, whether other importers have been granted exemption for the product and the remaining quota. Applicants will be notified by the FEHD within 14 working days on whether additional information is required, or whether the application is approved. Successful applicants will be notified to pay the fee before a specified date for the issuance of the formal approval letter. Upon receipt of payment from the successful applicant, formal exemption will be granted by the FEHD within seven working days.

No capital costs will be incurred by the FEHD for processing the applications and the vetting of applications will be conducted by FEHD staff responsible for food labelling. The estimated cost for processing applications is about $3 million a year.

(b) In estimating the number of applications for exemption each year, the FEHD will consider a variety of factors, including the number of food products on the market, number of importers/ manufacturers involved, the definition of food products of the "same version", and information provided by the trade, etc. The FEHD has adopted the established costing principles and the cost recovery principle in setting the level of fees. The fees cover mainly the staff costs, departmental expenses and administrative overhead involved in processing and vetting the applications. Based on the number of applications received, the Administration will deploy the necessary manpower to process the applications. The greater the number of applications, the greater will be the amount of resources deployed. Therefore the average cost of processing each application remains largely unchanged. The changes in the number of applications will have little impact on the fee level of each application. Upon the implementation of the scheme, we will know the actual number of applications, and will keep the costs and fees of the service under regular review in line with the usual practice.

(c) Since the number of applications will have little impact on the level of fees, there is no need to adjust the fees based on the varying number of applications. In line with the usual practice, the FEHD will keep the costs and fees of the service under regular review.

(d) Since the vetting of applications for small volume exemption directly involves the checking of whether the food concerned meets the legal requirements for exemption, and future enforcement has to be based on the accurate information received during application, it would be proper for the Government to monitor and approve such applications. The certificate of origin system implemented in Hong Kong is to facilitate the export of local goods to overseas markets. It is not a mandatory system. Depending on the requirements of importers or the importing countries, exporters can decide by themselves whether to apply for a certificate of origin for their products. The authorisation given to some local trade associations for issuing the certificates of origin mainly aims to facilitate the trade in applying for such certificates for their products. It is different by nature from the above statutory exemption.


Ends/Wednesday, June 25, 2008
Issued at HKT 15:32

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