The hidden costs of chasing the Dragon

On May 1, the US Food & Drug Administration (FDA) created a new agency position focusing on food safety and defence as a result of high profile scares related to the contamination of toothpaste with diethylene glycol (antifreeze) and seafood with melamine - both from China. With less than 1% of the 16.3M US imported products being tested by the FDA, it is not surprising that an issue of contaminated food products would cause concern at some point.

With the recent adulteration of nutrients (wheat gluten and rice protein) that may find their way into the dietary supplement market, manufacturers in the West have become increasingly concerned with issues of quality.

The new FDA stance will in essence open up the number of products tested and increase security at US ports. This increased scrutiny and possible increase in holding time may increase costs considerably across the supply chain.

Europe: border control

Senator Evan Bayh sent a letter to the FDA in mid May asking it to restrict the import of food and medicine ingredients from China until their safety could be proven. Although this was not followed through, recent requirements in Europe regarding the import of fishery products may be just as harsh. New rules under EC food hygiene regulations have been introduced, under which a new health certificate is required to accompany fishery products when imported from countries outside the EU.

In July, we may have seen the fallout from restrictions on dietary supplements from China in the form of a ban on Jarrow Formula's whey protein. Inspectors from China's General Administration of Quality Supervision, Inspection and Quarantine (Shanxi Bureau) rejected the whey protein on the grounds of unacceptably high levels of selenium.

Many experts in the US and Europe have condemned this move, claiming that it highlights the inspectorate's lack of understanding of the difference between basic food-grade selenium and the toxic hexavalent form found in industry.

It is also interesting that the Chinese government has been fortifying food for over a generation because of low selenium concentrations in Chinese soil. Consequently, it has been suggested that the ban is a response to the West's tougher line on trade with China.

Although this is the first instance related to dietary supplements, it is not the first block on food exports into China: chicken and pork from Tyson Foods were also blocked because of Salmonella, additive residues and high levels of anti-parasite drugs.

Economic fallout

In an industry where many ingredients are now commodities, manufacturers are always looking at the economic benefits of lower cost goods. But with a renewed focus on good manufacturing practice (GMP) and mandatory adverse event reporting, is the lower cost of goods from China worth the risk?

Even with a 40% cheaper price per kilo than similar ingredients from Europe or the US, costs can skyrocket as soon as contamination or quality issues are detected.

Shutting down the supply chain while finding a new ingredient source can be expensive as shipping costs increase, and consumer confidence could be severely shaken.

One way to overcome these issues is to test your products pre-shipment on the Chinese doorstep. This can cut down on potential returns. The products you do receive will also be pre-approved for your GMP guidelines.

Clearly, the West's relationship with the East is not as simple as once thought, and tapping into the Chinese supply chain can offer both economic advantages and potential brand damage. In the end it is the duty of manufacturers to put the customer first and guarantee the quality and safety of their own ingredients, whatever the cost.

Dr Mark Tallon is a consultant and co-founder of dietary supplements firm CR-Technologies. Contact him at: oxygenix2004@aol.com

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