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Food checks hitting small firms

FOOD safety checks designed to prevent dangerous contamination are making it difficult for smaller businesses to compete against larger rivals, two United Nations agencies said in a report obtained by Reuters yesterday.

The Food and Agriculture Organization and World Health Organization study said producers, processors and exporters in developing states were struggling to cope with new and overlapping requirements.

High-profile recalls in response to salmonella in peanuts, pistachios, mayonnaise, alfalfa sprouts and canola meal in the United States and Canada have raised consumer awareness about food-borne diseases and led to new government and industry standards.

Mixed results

The report for next week's meeting in Rome of the Codex Alimentarius Commission, a joint WHO and FAO body on food safety, said industry moves to introduce voluntary rules on top of government oversight had produced mixed results.

"To the extent that there are economies of scale in compliance and/or larger firms are better able to access finance and other resources, compliance processes are likely to induce processes of consolidation and concentration," said the study.

The document was also discussed yesterday at the World Trade Organization.

Contamination problems have affected many food majors, including Nestle, whose US baking division last week recalled its Toll House refrigerated cookie dough products after a food safety warning about E. coli bacteria.

PepsiCo's North American snack unit Frito-Lay this year recalled its pistachios in the US and Canada as a precaution during a broader recall that caused grocery chain Kroger to pull products from its shelves.

Commodities firms have also been affected. Processing plants and shipments at Cargill and Bunge have faced more stringent standards, including third-party laboratory tests to prove products are problem free.

The biggest constraints were being felt in poorer nations, said the study.


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