Tough Standards Limit Consumption of Organic Food in Taiwan

Rising food safety awareness and health consciousness among consumers around the world have made the consumption of organic foods a popular trend. In the United States, it is the fastest growing section of the food industry, with organic products accounting for over 5% of all food sold, totaling US$49.4 billion in sales in 2017, according to the Washington DC-based Organic Trade Association (OTA).

Taiwan, with less than 0.1% of global category sales in 2017, falls behind global and regional markets in its consumption of organic foods. Driven largely by the demand for locally grown organic rice, organic sales in Taiwan will see moderate year-on-year growth of close to 5% in 2018, according to the Global Organic Trade Guide. This is much slower than the rest of the Asia Pacific region, which will experience approximately 13% year-on-year growth in 2018.

The lack of available organic products on the market in Taiwan can be explained in part by the range of rigorous regulations placed on imported food and agricultural products. In the 2018 Taiwan White Paper, the Retail Committee of the American Chamber of Commerce makes several suggestions aimed at improving industry-government collaboration in the realm of food and commodity safety.

All imports of fruit, vegetables, meat, and other food products are subject to a long import process that includes inspection from the Taiwan Food and Drug Administration (TFDA) at the port of entry. Inspectors test for pesticides, animal drugs, and other contaminants such as heavy metals.

Both imports and domestically produced products must abide by maximum residue limits (MRLs) established by the Ministry of Health and Welfare (MOHW). However, local products are usually monitored at a much lower level.

Organic imports face much heavier regulatory restrictions, many of which are out of step with global standards. The U.S. Food and Drug Administration (USFDA), for example, allows organic products sold in the United States to contain traces of pesticides as long as they are not applied directly to the product and the volume of pesticide residue is lower than 5% of the MRLS of regular products.

Many pesticides commonly used in the United States and internationally have not yet been assigned MRLs by Taiwan, which has a de facto zero tolerance policy for residues of these agrochemicals without a set MRL. Sensitive, state-of-the-art equipment allow border authorities to flag down any imported products containing even minute residues of such chemicals.

Since Taiwan’s de facto zero tolerance policy for traces of any unapproved substances is a severe trade barrier for local importers, the Chamber encourages the Taiwanese government to recognize the existence of neighboring and background contamination in organic products and to determine more reasonable MRLs.

“Since neighboring contamination and background residue are usually inevitable, it is unreasonable to expect that no pesticide whatsoever will be detected in organic foods,” reads the position paper.

According to Peggy Liao, Assistant General Merchandising Manager at Costco Taiwan, there are still a great deal of foreign organic foods and brands that have not been introduced to the local Taiwanese market because of these import barriers. Examples of organics sold abroad but not available to consumers in Taiwan include various types of produce, dairy products, beverages, and snacks.

The significantly higher standards in Taiwan often require changes in production. Liao adds that some manufacturers have given up the opportunity to do business with Costco Taiwan altogether because they cannot guarantee that their pesticide-free product has not been “contaminated” before export.

The Act Governing Food Safety and Sanitation, enacted in 2014, requires the Taiwanese government to fully understand the risks associated with the prospective target of regulation by conducting food risk assessments before implementing laws that deal with those risks. The Chamber’s Retail Committee notes that no reasonable risk assessments were conducted when setting maximum residue limits for organic products.

The Committee’s second suggestion pertains to the regulation and classification of dietary supplements in light of Taiwan’s aging population and the burgeoning dietary supplement industry.

Taiwan’s Ministry of Economic Affairs recently established a “functional foods” category that encompasses dietary supplements. The Committee recommends that the TFDA reference the dietary supplement definition under the U.S. Dietary Supplement Health and Education Act to create a dedicated category of “Dietary Supplements” separate from conventional foods.

“All consumers want to know what they’re getting and how the product benefits them,” says Alex Lin, Head of Government Affairs at Herbalife Taiwan. “If we can show a legal category to buyers, they’ll understand that in your market, this terminology—‘dietary supplements’— is legitimate.”

For the full White Paper on retail in Taiwan, click here.