Posted by: Mahdi Ebrahimi | November 5, 2007

China Scares Spur Hong Kong Organic Food, Vegetable Tracking

Hong Kong consumers are demanding more organic goods after a series of food scandals in China, from where the city sources 80 percent of its food. Park’n Shop, the grocery-store unit of billionaire Li Ka- shing’s Hutchison Whampoa Ltd., this month started a system of monitoring vegetables imported from China. Rival Wellcome, controlled by Jardine Matheson’s Dairy Farm International Holdings Ltd., plans to turn its organic supermarket ThreeSixty into a three-store chain by the end of next year, said spokeswoman Annie Sin.

China is under pressure from the U.S. and European governments to strengthen food and export regulations after a series of scares ranging from contaminated toothpaste to seafood containing drugs banned in the U.S. Food quality awareness in Hong Kong, a wealthy city of almost 7 million people, is higher than in poorer mainland regions, retail analyst Mavis Hui said.

“Local supermarkets are looking to step up resources to protect consumers,” said Hui, an analyst at DBS Vickers Hong Kong Ltd. “This is an ongoing effort that will last through more inevitable food scandals.”

One of the two biggest supermarket chains in Hong Kong, Park’n Shop has more than 230 outlets in the city. Consumer demand for the chains organic vegetables has surged by 10 to 20 percent this year, company representative Jasmine Hui said.

Supermarket CitySuper saw 60 percent growth in organic fruit and vegetables in the year, according to spokeswoman Emily Wong.

Digital Trace

Park’n Shop’s digital system is used to trace vegetables to their mainland farms. The company took out a full-page newspaper advertisement tagged “Totally Traceable Total Peace of Mind” to highlight the move to Hong Kong residents.

“Over 80 percent of our vegetables are coming from China,” said Park’n Shop’s Hui. “The barcode is about creating safe consumption, where traceability creates responsibility.”

Park’n Shop began a paper-tracking record in 2000 after finding chemicals on green, leafy vegetables from China. The new barcodes give suppliers and consumers the dates vegetables were picked and shipped as well as delivery location.

DBS Vickers’s Hui said measures such as the barcode tracking system are “comfort campaigns” to help shoppers feel safer when buying food imported from the mainland. Safety measures have little impact on supermarket sales and performance, Hui said.

Officials Meet

Officials from China and the U.S. are meeting this month and next to agree on improving food safety.

China has said concerns over safety of its exports are exaggerated. It halted some U.S. meat shipments this month claiming they contained too much salmonella, additive residues and anti-parasite drugs. China’s government, while conceding that regulation needs to be improved, insists that the vast majority of products are safe.

Hong Kong safety scandals over Chinese food in the past year have included inedible oilfish sold as cod, malachite green dye in some fish, and pesticides residue on vegetables.

Hong Kong’s Centre for Food Safety checks for potential dangers and additives. Lawmaker Cheung said there’s nothing to worry about.

Food Is Safe

“Our Food Safety Department collects 70,000 samples per year to check for food additives. There have not been many that have come out with additives,” Cheung said.

Activists at environmental group Greenpeace disagree. They have accused the government of lacking the checks necessary to keep contaminated food out of the city.

“Inspections are few and far between and just a small percentage of the total volume of food brought in is checked,” said Greenpeace food campaign co-ordinator Angus Lam. “The system needs changing.”

Greenpeace hired an independent laboratory to test samples of vegetables taken from the shelves of the city’s supermarkets. The results showed banned pesticides on many samples.

The government has pledged to tighten its food-surveillance code. Opposition pro-democracy lawmakers have also urged legislation to safeguard food safety.

Hong Kong depends on Chinese imports for about four-fifths of the food it eats, according to lawmaker Tommy Cheung, who represents the food and beverage industry.

Independent outlets have also seen a boom in business.

TC Deli, a butcher that specializes in Australian meat, has had a 10 percent sales gain in the past three months as food scares emerged, said store manager JoJo Tsang. Organic grocery store Green Concept is expanding to three stores from one, spokeswoman Della Mak said.

“There’s been a mushrooming of demand for chemical-free products,” said Simon Chau, founder of Hong Kong’s first organic farm in Hok Fau, and chairman of Produce Green, a non-profit group aimed at organic food education. “Even the mainstream supermarkets are moving to organic.”

SOURCE: www.bloomberg.com


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