Strengthening the Links in Taiwan’s Retail Value Chain

A major driver of the Taiwan economy, the retail industry has gained momentum from technological development, rising disposable income, and the entrance of international players. In the newly published 2017 Taiwan White Paper, the Retail Committee of the American Chamber of Commerce in Taipei recommends practical steps for the government to take to improve the retail regulatory process while facilitating consumer protection, business development, and economic growth.

One suggestion is to expand the number of laboratories authorized by the Bureau of Standards, Metrology and Inspection (BSMI) to conduct testing on the various consumer items for which product testing is required. Even when test reports from the supplier’s home country are available, the Taiwan government demands that imported products undergo testing in domestic labs. Yet the shortage of testing capacity in Taiwan’s labs leads to long backlogs that inconvenience both business and consumers.

For products as diverse as imported toys, faucets, and organic foods, only one lab per category in all of Taiwan is recognized by BSMI as qualified to do the testing. In the case of faucets, for example, applicants need to wait an average of two months to have the necessary tests performed.

In addition, the Committee notes that the test results are usually available only in Chinese language. It requests that applicants also have the option of receiving the test reports in an English version, noting that foreign companies can more easily engage in the Taiwan market if they better understand the details of the testing process.

In this year’s position paper, the Committee also calls attention to the need for reform in Taiwan’s regulatory approach to dietary supplements. Currently these products are regulated by the Taiwan Food and Drug Administration (TFDA) as “food in tablet or capsule form,” a subset of food products – whereas most countries maintain a distinct “dietary supplement” regulatory category.

The food categorization presents problems, since dietary supplements may contain ingredients not traditionally used in food, and the authorities therefore often require time-consuming additional assessments before the products are deemed qualified to be imported into Taiwan. Those delays put consumers in Taiwan at a disadvantage in gaining access to products that they consider to be beneficial to their health.

Another difficulty cited in the position paper is that the interpretation and enforcement of regulations by TFDA at the central government level and by municipal authorities are often inconsistent. “Pre-market approval of tablet food by TFDA does not guarantee that local health bureaus will agree that the label is in compliance with regulations, creating a chaotic situation for importers selling products in Taiwan,” the paper notes.

The Committee asks TFDA to align its regulatory procedures with those of major trading partners such as the United States and Japan, including allowing dietary supplement manufacturers to communicate scientifically substantiated health claims to consumers. Currently Taiwan prohibits most such claims of health benefits.

To read the full Retail position paper, click here.