Expired products: Can they be relabeled and sold again? What does the law say?

Over the last few days, the news about changing the labels on the wrappers of expired chocolates and supplying them back to the market has spread like wildfire and a well-known conglomerate like Vishal Group along with a few other entities were alleged to have been involved. Shedding the light on the organized big scale operation of selling food products past their expiry dates by relabeling them, the news raised a lot of concerns over its impact on human health.

What happened?

On October 1, 2020, a joint team of Nepal Police and the Department of Commerce, Supplies and Consumer Protection (hereinafter referred to as the “Department”) raided three houses full of expired food products and other Fast-Moving Consumer Goods (FMCGs). Those products including widely popular chocolates, biscuits, chips, perfume, toilet cleaners etc., were relabeled with a new date and were ready to be sent to the market. The warehouses belonged to the Aryan Distributors, a sister company of Vishal Group, which is the authorized distributor of Unilever products in Nepal and United Distributors. Although Vishal Group has since denied the ties with the distributor company, the investigation and prior engagements show otherwise.

In the raid, the investigating authorities seized the expired products of what is supposedly worth around Rs. 30 million. This, in turn, exposed a large-scale operation of such unscrupulous market activity unlike the previous known cases of retailers selling expired products. As per the nutrition experts, much of such relabeled products are sent off to the rural parts of the country.

What does the law say?

The Consumer Protection Act, 2018 (hereinafter referred to as the “Act”), the guiding legislation on the issue, under Section 3 provides that the consumers have the right to be informed about the price, quantity, purity, quality etc. of the goods or services. As provisioned under section 16 (2) (l) of the Act, relabeling of goods which have crossed their stipulated period of consumption or non-consumable goods is prohibited. Further, section 39 of the Act reads a fine amounting from two hundred thousand rupees (Rs. 200,000) to three hundred thousand rupees (Rs. 300,000) for an offence pertaining to the relabeling of expired goods.

Having said that, as inferred by the judgment of the cases adjudicated by the Director General of the Department, the cases of such nature are tried not just under an act of relabeling the expired goods but also an act of selling substandard goods knowingly, or an act of selling any good by lying or deceiving about the standard under section 18 of the Act. In such cases, the punishment provided to the perpetrator ranges beyond fine, provisioning imprisonment of three months to one year.

Similarly, section 50 of the Act ensures the victim of such unscrupulous market activity to claim compensation, within 6 months, in the event where the victim is subjected to any physical, mental, financial or any other harm, or loss as a result of such an activity. Although the Act hasn’t precisely covered the compensation scheme, the concerned manufacturer, distributor or seller is required to compensate the victim, considering the gravity of the harm/loss, medical expenses, impact on income, and other concerning factors.  

On the other hand, as per section 33(3) of the Act, if an investigation officer finds that any goods or services is being manufactured, distributed or sold as opposed to the Act, the officer can have the sample of such goods tested at the laboratory authorized by the government of Nepal and halt the production, or distribution of such goods for the time being. In line with this provision, pursuant to section 35 of the Act, if such goods are found not in accordance with the set standard, such goods are to be destroyed as per the requirement. Also, the wholesalers and the retailers are required to return the expired products to the manufacturers or the distributors, which are eventually to be destroyed. The losses incurred in destroying such goods are to be borne by the concerned manufacturer, distributor or seller.

In addition, National Penal Code, 2017 (hereinafter referred to as the “Code”) categorizes the act of adulteration of food products as an offence against public health and safety. Section 107 of the Code prohibits an act of selling or distributing food items past the expiry dates, and for such an offence, a sentence of imprisonment for a term not exceeding 5 years and a fine not exceeding fifty thousand rupees (Rs. 50,000) is provisioned.

What Next?

The crime of tampering and relabeling of food products and distributing such non-consumable foods goes beyond a financial agenda. It becomes an agenda of public health and safety and should be treated as one. Since the Act supersedes the Code in this issue, the punishment provisions laid down under the Code do not apply here. Thus, considering the detrimental health threats it poses in the public health, the punishment provisions ensured by the legislation in force seems to have failed to encompass the severity of the crime. Since this unfortunate event disclosed the operation of such an activity in the grand scale, the need for the Act to update the punishment provisions particularly for the crime concerning relabeling of expired goods, while acknowledging the scale of such operation, becomes crucial.

Considering the impact of food quality resulting in public health, the failure of legislation related therewith, i.e. Food Act, 1967, to cover the offences relating to such relabeling of food items has become an issue of concern. Since the Food Act is the major law governing the food products and their quality, the need to update the law to cover various other activities including such relabeling of non-consumable food under its definition of “adulterated” or “sub-standard” food is strong now, more than ever. 

Additionally, with the unveiling of such a grievous crime, wherein such big entities are connected, it is high time we take proper legal action against the perpetrators, rather than shielding them under political protection.

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