Outsourcing has become a key strategy for a lot of manufacturers including those in the food industry, but this often runs into complexities due the FSSAI licensing requirements. It is critical that if you are outsourcing the manufacturing, you get your licensing right.
Generically, when a company hires another company’s facility to manufacture their products and sell it under their own brand name, it is called third-party manufacturing or contract manufacturing. But as per the regulator there is more to it.
What does the regulator say?
FSSAI mandates every food business operator to have a valid license with the Kinds of Businesses (KoBs) appropriate to their businesses. Definitions of different KoBs along with the eligibility criteria are provided on its licensing and registration website, FoSCoS. But for reasons unknown “Re-labeler” is missing from this list. Hence, a lot of Food Business Operators are not familiar with this KoB. You will first run into this term only when you start filling in the license application form. FSSAI has divided “Manufacturing” KoB into 3 categories:
- Manufacturing – when a person/ entity owns or operates an establishment that manufactures or processes a food product.
- Re-packing – means packing of food product into different sizes with labeling after doing minimal processing as required like sorting, grading, sieving etc. from wholesale packages. The food product is not manipulated & the composition or formulation is not affected or changed.
- Re-labelling – getting the food products manufactured/ packed from a third-party manufacturer/ processor.
Additional clarifications are available from the Office Memorandum published in 2013. It states that a re-labeler is a deemed manufacturer who can get his/her products manufactured only from a facility which holds a valid FSSAI license. Such business shall not hold manufacturing/ processing units of their own. The license will be issued to their head office/ registered office. Details of the actual manufacturers will be mentioned in the annexures of the license.
Although the products are manufactured by a licensed company, they are branded and marketed by another company. So, it is the responsibility of these brand owners or deemed manufacturers to ensure that the general hygiene and sanitary practices mentioned in Schedule 4 of FSS (Licensing and Registration of Food Businesses) Regulations, 2011 must be adhered to.
FSSAI also issued a draft Licensing Amendment Regulations, 2020, which defines re-labeler as “a food business operator who gets his/her product(s) manufactured/packed from a third-party manufacturer/processor”. It also states that a re-labeler is required to obtain a separate license/registration for each third-party manufacturer. It mandates all food business operators to have a documented product recall plan in accordance with the Food Safety & Standards (Food Recall)Regulations, 2017. The amendments were regularized vide notification dated 5 th April 2021.Here is a quick FAQ on the topic:
I have the “Marketer” KoB in my license. Won’t that suffice for branding and selling the products?
There are two types of “marketing” defined in the eligibility criteria document:
- Marketing (self) – promoting food product of a brand in the market which is owned by the self.
- Marketing (Third Party) – promoting food products of a brand in the market which is not owned by the self.
The definitions mention nothing about the manufacturing aspect of the product. It is purely a trading related business activity. If a company is marketing/ branding the products in their name and these products are manufactured by a third party, they have to apply for a “Re-labeler” license.
But why this additional category?
By law, it is the responsibility of the manufacturer to ensure compliance and adherence to the food safety practices. The idea behind the re-labeler category is to ensure traceability of the product right up to the manufacturer and also assign the right ownership if something were to go wrong.
So what do I put on the Label?
As per the FSS (Labelling and Display) Regulations, 2020, which will come into force from 17 th Nov, 2021 it is mandatory to write the name and complete address of the brand owner, whether or not, he himself is the manufacturer, marketer, packer or bottler on the label. Such name and address shall be preceded by the qualifying words “Manufactured by (Mfg. by, Mfd. by)” or “Marketed by (Mkt. by)” or “Manufactured & Marketed by” or “Packed & Marketed by” as the case may be. A re-labeler is required to mention the name, address, and license number of the actual manufacturer/ processor along with his own name, address, and license number on the label.
To sum it up
Although the term “Re-labeler” has been there in our country’s food laws since its inception, the awareness about its existence and its requirements is still lacking within the industry, especially the SMEs and startups. It would really be great if the regulator makes this aspect visible and understandable both for the industry as well as the consumers. It is also just natural that the brand that conceived and controls the product be responsible for its quality and safety.
Author: Surabhi Soral is a Food Technologist and passionate about setting things right in the first go. She is a Consultant at Food Safety Works and heads the the regulatory and compliance team.
