Food companies, quick-commerce platforms face stricter FSSAI checks, higher compliance costs: Jefferies

Food companies, restaurants, and quick-commerce platforms may encounter higher compliance costs and operational delays due to the expanding regulatory scrutiny from the Food Safety and Standards Authority of India (FSSAI), according to a report from Jefferies. The regulator's focus is shifting from individual products to the entire value chain, encompassing advertising claims, labeling, product authenticity, online listings, storage conditions, and food safety practices.

Over 150 notices have already been issued to major food, beverage, dairy, and nutraceutical companies for misleading advertisements, false claims, and labeling violations.

A key area of concern is the proposed implementation of front-of-pack warning labels for foods high in sugar, salt, and fat, which could impact product packaging, marketing strategies, and reformulation decisions. Quick-commerce and e-commerce platforms are also being recognized as active participants in the food supply chain, facing potential requirements to display expiry dates, manufacturing details, and batch numbers on their listings.

They will also be subject to stricter scrutiny over seller verification, product information, and storage conditions in their dark stores.

Restaurants, quick-service restaurant chains, cloud kitchens, and hotels are experiencing tighter checks on hygiene, calorie disclosures, menu labeling, and licenses. More than 30 notices have been issued to these establishments. Dairy products, health supplements, alcoholic beverages, and pan masala packaging are also under scrutiny, with potential restrictions on the sale of analogue paneer under the name "paneer."

In response, food companies and restaurant chains are expanding compliance teams, internal audits, training programs, and quality control processes. Organizations with strong compliance frameworks and efficient corrective-action capabilities are more likely to adapt well to the growing regulatory expectations. However, the expanding regulatory requirements could potentially affect supplies, compliance costs, and operational efficiency across food brands and platforms, according to Jefferies.