The entanglement of HJ Heinz in China's latest food scare highlights a key concern for international and local firms — how to keep track of ingredients from diverse sources in a country where food supply tracing technologies are far from the norm.
The US food maker apologised to Chinese consumers last week and said it would tighten controls over suppliers after it was forced to recall some infant cereal from store shelves due to excess levels
Food safety scares erupt regularly in China — KFC parent Yum Brands, McDonald's, Wal-Mart Stores and Fonterra Co-operative Group have all suffered recently — and such incidents can seriously dent sales.
But barcode tracking systems for produce, common in the United States and Europe, are largely absent.
“Standardized traceability of food products does not currently exist in China. It's a long way from it,” said David Mahon, Beijing-based managing director of an investment firm focusing on China's food and beverage sectors.
China's food traceability systems and regulation were classified as “poor” in an August report from the Institute of Food Technologists. This was the lowest score of around 20 countries
Food safety barcodes store details such as the farm of origin, dates of harvest, planting, storage and shipment, meaning clients down the line can trace a particular batch and find out how and why any issues occurred.
Some firms have tried to bring the system into wider use in China — French grocer Carrefour launched a barcoding system last year for fruit and vegetables — but the technology has failed to catch on due to the high costs of implementation throughout scattered supply chains.
Heinz said it had identified the supplier and ingredient — a skimmed soybean powder — responsible for the recall of four batches of its AD Calcium Hi-Protein Cereal from stores in eastern China, but added the firm needed to do more to keep suppliers in check.
“We will keep improving traceable food safety control systems from 'farm to factory',” Heinz said in a statement posted on its Chinese website.
Heinz, which was bought out by Warren Buffett's Berkshire Hathaway Inc and private equity firm 3G Capital last year, did not respond to requests for further comment.
Consumers in China are highly sensitive to issues of food safety, especially with baby products, after powdered milk tainted with the industrial chemical melamine led to the deaths of at least six infants in 2008.
Danone SA and Abbott Laboratories saw infant formula