Speeches and Articles by Former Consul General James B. Cunningham

Nutrition Labeling Regulation Proposal Will Reduce Healthy Choices

April 15, 2008

(This article was published by South China Morning Post on April 15, 2008, and this article is not for commercial use.)

One of the Hong Kong daily papers recently ran an editorial supporting the Hong Kong government's food labeling proposal, gazetted on April 3. I was pleased to see that to illustrate the desirability of a quality labeling regime, the paper used a U.S. nutrition label. We consider the U.S. regime to be among the best and most demanding in the world, and want consumers to have good information about what they eat. The irony here, though, is that under the proposal in its current form, many American products bearing that label will be effectively excluded from the Hong Kong market.

One of the pillars of Hong Kong's status as an international city is the tremendous variety and quality of its food choices. The cosmopolitan makeup of Hong Kong's population and its pragmatic regulatory regime have given its residents access to the newest, the finest and the healthiest products the world has to offer. This appealing characteristic will change if the labeling proposal takes effect as currently written. Though well-intentioned, the proposal will significantly reduce the variety of healthier food choices for Hong Kong consumers. It will also raise prices and contribute to inflation.

The policy objectives behind the labeling amendment are laudable: to help consumers make informed food choices, to encourage manufacturers to apply sound nutrition principles, and to prevent misleading or false labels and claims. But, despite its overwhelming dependence on imported food, Hong Kong authorities have devised a labeling scheme unique in the world. Most products would have to be relabeled and many would have to undergo new nutritional analysis to comply with the government's regulation. For a market of just seven million people, these added costs will make the importation of many products unfeasible.

Hong Kong's proposal is also far more rigid than other major importers, including mainland China, Japan and Korea. Singapore -- a market that also carefully protects its consumers -- has a flexible system that accommodates the various labeling standards of its principal suppliers.

Hong Kong's inclusion of a "small volume exemption" (i.e., not requiring re-labeling for products selling fewer than 30,000 units) is important and will doubtless keep many products in the market. However, it will make it more difficult and more costly to import healthier foods. This is because the small volume exemption to Hong Kong's rigid requirements is lost if the packaging contains a nutritional claim such as "low fat," "low sodium," or "high in vitamin A".

This is not an issue of labeling versus non-labeling, or of Hong Kong's right to set its own standards. It is an issue of rigid standards that unnecessarily reduce consumer choice versus more flexible ones. Virtually every one of the tens of thousands of imported items that make a nutritional claim already provides detailed nutritional information on the package. For example, products from the U.S. are labeled according to U.S. law, which is the world's most stringent. They do not, however, comply with Hong Kong's proposal. If not relabeled precisely according to the Hong Kong standard, these products will be banned. The economic reality of today's highly efficient and innovative food processing industry is that many of these foods will disappear from the Hong Kong market.

Clearly, the growing number of Hong Kong consumers who depend on products with claims for medical reasons (such as products for diabetics labeled "sugar-free"), or simply for their general health, will be seriously affected by this legislation. Moreover, if passed in its current form, the amendment will make Hong Kong people among the last instead of the first to gain access to newer and better foods. By imposing high registration, nutritional analysis, and relabeling costs on products with claims, test marketing new foods becomes expensive and complicated.

There is a simple solution. Hong Kong should broaden the small volume exemption to include food products that make nutritional claims. This would allow today's flexible labeling standards to apply to foods until sales reach a level that economically allows them to comply with the new Hong Kong scheme. This would go a long way in preserving the wonderful diversity of food that is a unique part of the fabric of "Asia's world city." Moreover, it would do so without undermining the objectives of this important legislation.

James B. Cunningham is the US consul general in Hong Kong & Macau