Business consumer Affairs
Food: Do you get value for money?
Food is an essential requirement for living. Life cannot be
maintained without it. It is just important as oxygen or water. Hence,
it is obvious without food we cannot survive. How many of us is aware of
what we consume is safe food.
The customer/consumer and the public should know what they are
buying. It is an offence to sell any food with a label or publishes an
advertisement which falsely describes quality foodstuff or which is
sometimes misleading, claims as to nutritional or dietary value of
Food standards assure the customer the nature, substance and quality
food one buys with confidence. Correctly labelled foods offered for sale
is assured by standards.
The label may be considered as a self advertiser for the manufacturer
while for the consumer it assures quality or warns of potential hazards
from preservatives, other additives, colouring matter, contaminants and
age of the product.
‘Label’ includes any words, particulars, trade mark, brand name,
pictorial matter or symbol relating to the food and appearing on the
packaging of the food or any document, notice, label, ring or collar
accompanying the food.
When a name incorporates the name of a food it must be present in a
significant quantity. For instance ‘milk food’ should contain at least
70 per cent dried milk. If the food includes the names of two or more
ingredients, the ingredients present in the greatest quantity should be
named first, e.g. ‘malt extract and cod liver oil’ not ‘cod liver oil
extract and malt extract’.
Pictorial designs should not be employed to suggest natural origins
in food which contain only artificial products, e.g. lemons on the label
of an artificially flavoured lemonade powder containing citric acid
only. Another example is a picture of a bunch of grapes on a bottle
containing imitation wine or imitation brandy.
Foreign words should not be used on labels to give false impression
that the food originated from the country indicated by the language,
e.g. ‘Chinese noodles’ in Chinese or ‘Italian Spaghetti’, ‘Italian
Macaroni’ in Italian when these are made locally.
If a label has a nutritional claim, the substance on which the claim
is made should be present in a nutritionally significant quantity.
Labelling and advertising has now become so complicated and scientific
that they offer almost unlimited scope for misrepresentation to the
Sometimes standards also require specific processing requirements,
precautions about the storage and details about the contents. Some
standards prescribe minimum limits, others maximum limits.
The primary objective/purpose of the standards is to ensure the
health and safety of the consumers. Food regulations stipulate standards
for many foods.
The labels should inform the consumer what the food is, what is in it
and how long it will remain in good condition.
In general the label should include the name of the food, a list of
ingredients, minimum durability, storage conditions if any and
conditions of use, the name or business name and address of registered
office of the manufacturer or packer or seller, the place of origin of
the food, if failure to give this misleads this customer regarding the
true origin of the food, and instructions for use if failure to give
these may mislead the customer regarding appropriate use.
The name of the food, weight and minimum durability shall appear on
the label in the same field of vision.
It is an offence under the Consumer Affairs Authority Act No. 9 of
2003, (i) to have false, misleading claims/statements regarding
nutritional uses and medical claims unless the food is capable of
fulfilling the claims; (ii) to remove, alter, obliterate, erase or
deface any label, description or price mark on any goods in respect of
which a direction has been issued under Section 10 (1) or sells or
offers for sale any such goods from or on which the label, description
or price mark has been removed, altered, obliterated, erased or defaced.
Also offences under respective regulations such as (iii) to sell any
food which is not labelled in accordance with the labelling regulations;
and (iv) to sell any food which violates the food standards or
non-compliance with standards.
At present there are about 85 items that come under the Sri Lanka
Standards Institution (SLSI) mandatory import inspection scheme. Those
who import these said items have to obtain a clearance certificate from
the SLSI to sell their goods.
There is a discussion within some sections of the health sector to
introduce a labelling requirement for imports of Genetically Modified
(GM) Food. A draft regulation has been prepared and discussed with key
The regulations under the Food Act No. 26 of 1980 came into effect on
April 1, 2004 govern the information that should appear on a label of
any pre-packed food product offered for sale, transported or advertised
for sale in Sri Lanka. This includes all imported food items as well.
The directions issued under the Consumer Affairs Authority Act No. 9
of 2003 include the new features such as maximum retail price, date of
expiry and the batch number for 54 items and standards for few items.
There should not be fundamental divergence of interest between the
consumer and supplier. The best option is the dialogue between
consumers, industry and regulators to protect the welfare of the
consumers. If consumers are not satisfied producers/traders cannot
continue to be in business.
The purpose of this article is to make the consumers aware that the
price and weight of measurement are not the only criteria for you to
consider while purchasing. If you are to get value for your money spent,
then check on price, weight, standard (quality) and the labelling
instructions on your purchases, whenever you do so.
This article highlights key issues relating to independence of
regulatory agencies by giving an account of some civilised countries in
The notion of an independent regulation system is an important theme
in regulation literature. Although it is accepted that independence is
necessary to attribute for an effective regulator, the concept is
difficult to define because it has multiple admissions.
Moreover, to be independent, a regulator should not only be
physically and operationally separated from those it regulates, but also
be empowered to effectively carry out policy.
This can be done by making objectives, well-reasoned, written
decision arrived at through transparent procedures and based on a
complete public record. Regulators should be free from undue political
influence during this process, and impartial decisions, based on public
record, should not be undermined for political reasons.
Finally,the scope and substance of a regulator’s jurisdiction should
be clearly worded by statute, and there should be adequate funding to
carry out its responsibilities.
Successful regulatory policy improves both efficient and private
The way a country’s political and social institutions interact with
regulatory processes and its economic conditions, influence the
confidence of investors and performance of privatised utilities. Good
governance of the regulatory agency can improve sector performance.
The existence of poor governance structures is a relevant feature to
be taken into consideration in the institutional environment. The
existence of political instability demands independent institutions and
professional and competent administration to ensure policy stability.
Creation of regulatory agencies accompanied the process of opening
infrastructure sector markets to the private sector, either throughout
privatisation or throughout partial privatisation or by means of mere
permission for private organisations to enter the market without
privatising the state enterprise.
In markets such as air transport telecom services in Sri Lanka where
there was no longer any direct state participation, the trend was toward
allowing new competitors to enter these sectors, and to introduce or
Functions of Consumer Affairs Council
There are both imported and locally manufactured goods in plenty in
the market today. Among them may be goods that are not up to the mark
quality wise. A housewife may be duped by a vendor or she may have
purchased an item of food which may have an ‘expiry date’ which is
There is legislation to give her relief. There is also a moral duty
cast on the prevailing Government to see that essential items necessary
for the day-to-day life of the ordinary citizen, not be sold at
exorbitant rates and that goods be available in plenty at all times.
Consumer Affairs Authority Act No. 9 of 2003 has been enacted to give
protection to all consumers resident throughout the length and breadth
of Sri Lanka.
The Consumer Affairs Authority Act has come into being for the
establishment of a Consumer Affairs Authority and a Consumer Affairs
Council, for the promotion of effective competition, protection of
consumers and for the regulation of internal trade.
This Act repealed some of the earlier Acts which had been in force
earlier for the protection of the consumers like the Consumer Protection
Act, Fair Trading Commission Act and the Control of Prices Act.
The Consumer Affairs Council is a tribunal comprising a Chairman and
two members appointed by the Minister for a period of three years.
It is cast with the duty of hearing and determining all applications
and references made to it either by the Consumer Affairs Authority or by
the Director General of the Consumer Affairs Authority.
Where it appears to the Director General of the Authority, that there
are instances where goods are being sold or any services are being
provided by a manufacturer or trader:
At an excessive price or there is any market manipulation or there
are any other market imperfections, the Director General may, in
consultation with the Authority and having regard to whether a) the sale
of such goods or the provision of such services is of general economic
importance or b) any category of consumers are significantly affected by
such excessive price refer such matter to the Consumer Affairs Council
for investigation and report. (Section 19 of the Act).
The Consumer Affairs Authority Act interprets the word ‘goods’ to
mean any food drink, pharmaceutical, fuel and all other merchandise.
‘Manufacturer’ under the Act means any person who -
a) makes any article or any goods
b) assembles or joins any article or any goods whether by chemical
process or otherwise or
c) adapts for sale any article or any goods.
Trader means any person who is:
a) a wholesaler
b) a retailer
c) an importer
d) provides services for a consideration
‘Services’ under the Consumer Affairs Authority Act includes a whole
lot of services and includes the following:
a) banking, financing insurance, shipping and entertainment
b) the construction, production, manufacture, supply, storage,
maintenance, repair treatment, cleaning, processing or alteration of
c) services in connection with the import, export or distribution of
d) the transportation of goods and passengers
e) the cleaning of buildings and building premises
f) the sale and supply of any utility services including electricity,
water, gas and communications
g) the provision of information technology and communications.
h) professional services such as accounting, auditing, legal, medical
and health, surveying, architecture and engineering.
At the conclusion of the investigation the Council has to forward a
report to the Director General of the Authority.
If the Council concludes that the goods are being sold or the
services are being provided at an excessive price, it shall recommend to
the Authority in writing:
a) the maximum price above which such goods should not be sold or
such services should not be provided or
b) the price structure in accordance with which such maximum price
shall be fixed.
How, when and by whom, may the public refer a complaint to Consumer
If there is a complaint regarding goods being sold or services being
provided at an excessive price, any member of the public, or any
association of persons or any organisations wish that Council should
investigate into such matter, such member of the public, association or
organisation can request the Director General of the Consumer Affairs
Authority to refer the matter to the Council for investigation. (Section
22 of the Act).
An anti-competitive shall be deemed to prevail -
a) in the course of business conduct
b) It could be pursued by one person or by a group of persons
c) Such anti-competitive practice will restrict, distort or prevent
d) Such practice is likely or it intended to have the effect of
restricting or distorting or preventing competition in connection with
the production, supply or acquisition of goods in Sri Lanka or the
supply or securing of services in Sri Lanka.
The Act does not describe a list of practices that would amount to
anti-competitive practices. This definition recognises the importance of
taking into consideration the individual circumstances of each practice
by basing its test on whether a practice is anti-competitive and not on
the form of practice, but on its effect, or whether it is likely or
intended to effect competition.
By doing so it enables proper considerations to be given to the
individual circumstances of a practice, which may frustrate competition
in one set of circumstances and may not be so in another. Upon the
conclusion of an investigation by the Authority, the Authority may make
an application to the Council for purposes of determining on such
matter. (Section 37 of the Act).
When a reference is made for a determination regarding the existence
of an anti-competitive practice, the Council shall on being satisfied
An anti-competitive practice exists but such a practice does not
operate against public interest, authorise such anti-competitive
practice or the anti-competitive practice exists and it operates against
public interest, by order made in that regard provide for -
1) the termination of such anti-competitive practice in such a manner
as specified in the order and
2) such other action the Council may consider necessary .
Where an application is made to the Council regarding an
anti-competitive practice it is the duty of the Council to make its
order within one month of its receipt.
However if at the conclusion of an investigation by the Authority
into the prevalence of an anti-competitive practice, the Authority does
not decide to refer the matter for a determination, the person, any
organisation of consumers or association of traders, who made the
complaint or requested for such investigation, may request the Council
a) call upon the Authority to submit to the Council its report on the
b) hear and determine such application, where the Council is of the
opinion that there is sufficient material in the report to warrant the
Council taking up such application for determination.
The above are the salient provisions of the Consumer Affairs
Authority Act in relation to the Consumer Affairs Council. At present
the Consumer Affairs Council has its office and holds inquiries in the
first floor of the CWE Secretariat Building, No. 27, Vauxhall Street,