The Pakistan FMCG Importers Association (PFIA) has urged the Federal Commerce and Textile Ministry to revisit its decision of making mandatory for importers to print complete information label in both in Urdu and English on imported food items, ensuring minimum 66 percent shelf life at the time of clearance of such goods and obtaining a Halal certificate from a recognized Halal authority.
The Commerce Ministry had amended import policy last month under which new regulations for the imported food items were set: labeling of ingredients, nutritional values and usage instructions in Urdu and English; minimum 66 percent shelf life and obtaining a Halal certificate from an accredited authority or from an issuing authority that is a member of either IHAF or SMIIC. These changes were implemented with immediate effect.
In this connection, Irfan Iqbal Sheikh, former senior vice president of LCCI and PFIA Central Leader, wrote a letter to Abdul Razzak Dawood, the advisor to the Prime Minister on Commerce and Textile, and raised his community concerns relating to the issues that will arise due to the sudden change in the import policy on food items.
In the letter, Sheikh observed that although the government claims that these measures will benefit consumers, but the association feels that these conditions will have an adverse impact on free trade and will act as non-tariff barriers. He reminded the advisor that tariff on imported food products range from 80 percent to 125 percent, which is already amongst the highest in the world," he added.
According to him, matters relating to label and affixing of a Halal logo was discussed in a meeting between the stakeholders and the advisor and federal commerce secretary on December 8, 2018, and an understanding was reached that following key considerations needs to be kept in mind prior to making any new regulation:
A minimum time period of three years is required for changing labels by exporting countries and suppliers; the process involves designing of new packaging as per the requirements of a government and get it approved from relevant authorities in manufacturing and exporting countries. Considerable time and resources will be required to fulfill the labeling proposed by the Pakistani government.
Moreover, to change label, there is a need to meet minimum order quantity, which is not the case for many food items, including specialized segment products like sugar-free and gluten free ranges. Products that cater to non-resident Pakistanis like cereals, mineral water and infant milk might also not meet these criteria. This will create hurdles for businesses, as the minimum volume can never be met for these products.
As for Halal certification, he said, in his letter there is no up-to-date list of IHAF and SMIIC accredited bodies and no such list is available from the ministry for a reference. Since it is a government-to-government related business, it will take time to compile a latest list of Halal accredited bodies.
He pointed out that these observations were communicated in the meeting, but still a notification regarding the amendment in the import policy was issued on February 19 with immediate effect. "This means that all shipments with Bills of Lading issued on or before February 19 shall be cleared by the Pakistani customs and after that, no shipment shall be cleared by the port authorities," he added.
"The haste with which the amendment was made gives an impression to the business community that the government intends to completely ban the import of food items to curtail the trade deficit. The idea is ill-conceived; the government needs to focus more on increasing exports than curtailing imports which will generate much needed government revenue as well as employment," he added.
Thus, he requested the advisor to the Prime Minister on Commerce and Textile to develop a clear road map of three years for implementation of these proposals put forward by them.
Highlighting the consequences of the government's recent decision, he said that the Pakistani companies have already placed orders for Ramazan and Eid, and due to the change in regulations, these orders will have to be cancelled. "There are hundreds of thousands of shipments that are now parked at different global ports and no one is sure what will be the fate of these shipments once they arrive in Pakistan. The financial integrity of Pakistani businesses will be damaged and will bring a bad name to the country," he added.
He observed that if any import activity comes to a halt then this will result in downsizing and unemployment will multiply, which will go against the vision of the Prime Minister to create 10 million jobs in five years.
"Retail businesses across the world work on credit and immediate freeze of supplies would cause shortages. Disruption in the business cycle will create a situation where there will be massive defaults and a liquidity crunch will be created, meaning more chaos for the already fragile economy. Moreover, shortages of food product will lead to inflation and encourage smuggling," he added.
To rectify the situation, Irfan Iqbal Sheikh proposed that rather than printing Urdu labels, stickering should be allowed. Even for pasting stickers a minimum time period of 12 months should be given before implementation. Stickers should be allowed to be pasted locally and not from origin countries as they have no such facility.
The existing law of 50% shelf life from date of filing IGM should be restored. In the absence of the Pakistan Halal Authority, it should be allowed that whatever is declared Halal by IHAF should be considered Halal by Pakistani Authorities. Once the Pakistan Halal Authority is operational we can get approvals from them. This new law should not be implemented until an agreement is reached between stakeholders and the government or else there shall be complete chaos due to uncertainty.
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