Food safety, labelling and regulatory compliance are becoming major concerns for India’s packaged food and beverage companies. With regulators increasing checks and enforcement, these matters are no longer being handled only by quality-control teams. CEOs and senior management are now getting directly involved.
Angshuman Bhattacharya, Partner and National Leader, Consumer Products and Retail at EY-Parthenon, said safety, compliance and labelling have moved from the quality manager’s desk to the CEO and board level.
“A lot is at stake and the risks are huge,” he said.
Companies are worried that even a single compliance failure could damage consumer trust and affect a brand built over many years. As a result, some businesses are spending more on regulatory checks and quality testing, even if it means reducing their marketing budgets.
Bhattacharya also pointed out that companies cannot simply blame retailers or distributors if problems are discovered after products leave the factory. Brands are expected to take greater responsibility for their products throughout the supply chain.
Start-ups Increase Quality Checks
The pressure is even greater for food start-ups, where a regulatory problem can hurt consumer confidence and may also affect future investment and fundraising.
Ashwin Bhadri, founder of food, water and environmental testing organisation Equinox Labs, said founders of several clean-label and frozen-food start-ups are personally paying greater attention to compliance audits. Some companies are also publishing audit results online to improve transparency and build consumer confidence.
According to Bhadri, some start-ups are even reducing marketing expenditure to spend more on testing and quality checks.
Water quality is receiving particular attention. Under FSSAI requirements, food and beverage businesses need to ensure that the water used meets prescribed potable-water standards, including IS 10500 requirements. Companies that earlier opted for cheaper testing methods are now becoming more careful about following the required standards.
Distributor Checks Reveal Gaps
Compliance concerns are also spreading beyond factories to distributors and other supply-chain partners.
A report by digital verification company AuthBridge found that nearly one in every 10 FMCG distributor applications failed important regulatory checks.
Problems included identity mismatches, regulatory violations and financial risks. Nearly 10% of distributor applications also failed FSSAI licence verification checks because of expired licences, invalid certificates or missing approvals for certain product categories.
These findings show how compliance risks can emerge at different stages of the food supply chain.
With regulatory scrutiny increasing, food companies are beginning to see food safety and labelling as more than a technical or quality-control responsibility. They are increasingly becoming business and reputation issues that require attention from the highest levels of management.