Food is a good business. In good times and bad, going into the food business is always a safe bet, the prevailing wisdom goes. It requires low capital and could easily be started from home. It could even start as a simple hobby, morphing into a full-time business as soon as demand hits a tipping point.
A very recent development will complicate things for Pinoy Entrepreneurs already in, and those thinking of going into, the food business. It may not be a big deal for big food businesses, which have the funds and manpower to spare, but it’s certainly a heavy burden for micro, small and medium enterprises.
On 23 August 2013, President Benigno Aquino signed a new law which regulates the food business, the Food and Safety Act of 2013 (Republic Act No. 10611; full text). The Primer on the Food and Safety Act should be a good springboard to start the discussion. For this article, let’s focus on and discuss a few points that would certainly have an impact on food business operators.
Anyone dealing with food, at whatever stage in its preparation, is most likely considered a food business operator. The law defines a food business operator as a person engaged in the food business, encompassing all stages in the production of food — from primary production, post-harvest handling, distribution, processing and preparation for human consumption.
All food business operators MUST be licensed/registered and subject to regular inspection. Failure to register, by itself, is a criminal offense and the commission of other violations by a non-registered person automatically doubles the applicable fines.
Every food business operator must comply with food safety standards. The pertinent government agencies are tasked to come up with food safety standards and by the time these regulations are done and go into effect, every food business operator must know these standards and ensure full compliance. Failure to comply with any standard is another offense.
And it’s not a one-time compliance. The pertinent government agencies can demand to inspect the food business establishment and produce documents. Refusal of inspection of premises or production of documents is an offense.
Food safety standards are issued for the benefit of the consuming public, so there should be no issue with the issuance and implementation of these rules. Registration of businesses (and naturally the payment of fees and taxes) is also a normal requirement. But we must recognize that these requirements add to the financial and operational burden of small entrepreneurs.
Indeed, the observed inefficiencies and red tape in government registration and compliance are not without basis. If the new regulations are implemented without providing for effective and transparent mechanisms to address red tape (and not solving the existing inefficiencies in the first place), then small and new Pinoy Entrepreneurs who are planning to go into the food business have some serious thinking to do.
Bottom line? When going into the food business and in preparing the business plan, ALWAYS factor in the COMPLIANCE requirements under this new law.