Senior council member of Denton’s Law Offices, Mr. Wilfred Feng, shared his expert legal perspective on protein innovation at the 2021 Protein Innovation Workshop. Mr. Feng touched on the following three key components in his report: recent movements and changes of Chinese food regulations, critical issues for the protein innovation industry in China, and regulations on cellular agriculture.
Regarding the intricate world of Chinese food regulations, Feng discusses a new addition to Chinese Food Safety Law known as “double punishment.” Usually, when a food enterprise violates a regulation, there will be an administrative penalty that only targets the enterprise. The new regulation, though, states that those who are directly in charge of an enterprise can be penalized as well.
The four main organizations that deal with food in China are China’s State Administration for Market Regulation (SAMR), the National Health Commission (NHC), the Ministry of Agriculture and Rural Affairs (MARA), and the General Administration of Customs (GAC). Recently, SAMR published a list of health claims for nutritional supplements. This is critical to the alternative protein industry because companies are obligated to inform the public of what effects their product would have on public health. SAMR additionally drafted a “Food Labeling Supervision and Management Method” for public comment. It claims that “plant-based meat should be labeled as ‘imitated’, ‘artificial’, or ‘Su’ (vegetarian).” According to Mr. Feng, this will have great impact on the alternative protein industry and how these products are marketed to and perceived by the public.
Indeed, several issues face the Chinese protein innovation industry. For example, China currently implements the “catalogue policy” towards foreign investment. Essentially, foreign investments are selectively encouraged in some industries, while others are not. If the investments are encouraged, investors will receive preferential taxation and land lease. Any other investments are either prohibited or heavily regulated.
Also, in China, every product is approved by one national standard. If a relevant standard does not exist, a new one is created. This can cause frustration for the alternative protein industry because national standards influence the naming and classification of products. One example is novel food. Novel food (any new type of food such as alternative protein) is required to obtain pre-market approval to enter the market. However, there is no clear-cut standard to determine what novel food includes. Because of the changing and often vague national food standard, it remains difficult to classify novel foods let alone any other type of food.
Products that are categorized as GMO, also need pre-market approval, and in China, determining regulations for GMO food ingredients is currently at a standstill. And of course, the main issue in categorizing meat alternatives is usually about whether it can be considered “meat”. This is important to hybrid products which are made of animal meat and plant-based meat. The answer to these questions still depends on local language.
Mr. Feng suggested that there should be special consideration placed upon cross-border electronic commerce. Commodities involved in such transactions do not have to adhere to each regulation, but they also cannot disregard all of them.
Additionally, in general, a patent cannot be granted to an organism. However, it does not mean IPR (intellectual property rights) on such fields are deprived of protection in China. Microorganisms could be protected similarly to the protection of plants under the Plant Variety Protection.
It is crucial that entrepreneurs and potential investors understand the legal ramifications of protein innovation in China so they can take full advantage of the vast opportunities that await!