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Crisis deepens as FMCG importers asked to ‘show cause’

Updated March 24, 2019

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Supplies halted as customs takes action against non-compliant cargo. — AFP/File
Supplies halted as customs takes action against non-compliant cargo. — AFP/File

KARACHI: Custom officials have started issuing show-cause notices to importers and store owners who have filed goods declarations (GDs) on imported food items after the issuance of SRO237 on Feb 19.

Customs department has sent over 10 show-cause notices to various departmental store-owners and importers, following the change in Import Policy Order in February. In fear of these notices, hundreds of importers and store-owners have stopped filing GDs with customs department whose containers are awaiting clearance at the port.

Imtiaz Super Market General Manager Commercial Hamid Hussain Khan confirmed the issuance of show-cause notice while speaking to Dawn. He said that the notice points out the ban on import of various products like fruit juices and facial tissues on which ingredients, details and labels are not printed in Urdu, and halal certification has not been obtained. Customs informed the store owner that the import of these goods is banned and are liable to be confiscated.

Supplies halted as customs takes action against non-compliant cargo

“We have only imported two containers in March as against 35-40 containers per month,” he said adding that “we have already delayed 10-12 containers which were due to arrive next month. He added shortage of FMCGS has already begun across 11 stores and “we will run out of stocks in one month if imports are not restored.”

Imtiaz Super Market, with nine branches in Karachi and one each in Gujranwala and Faisalabad, regularly imports items like organic foods, breakfast cereals, quacker oats, Nutella, nutritional food items, peanut butter, glutton and soya-free products etc from USA, Saudi Arabia, the UAE, Malaysia, Indonesia and the UK.

“Pakistan imports around 2,400 containers bearing FMCGs every year, accounting to volumes of 55,000-60,000 tonnes with total value of $700-750 million. The contribution of these items in the country’s import bill is peanuts compared to the total annual imports of $55-60 billion,” Hussain said.

Following government’s decision to change the labeling requirements and Halal certification for all FMCGs, exporters from Italy, Spain, the Philippines, US, Germany and other countries have approached Ministry of Commerce seeking reversal of the move, Pakistan FMCG Importers Association President Anjum Nisar says.

Munsub Abrar, Karachi Coordinator FMCG Importer Association, said “shortage has started in his store with baby foods, butter, cheese, cereals, olive oils etc as supply has come to a halt. The next 30 days are very crucial in case FMCG imports remain suspended.”

He said most of the mega and medium departmental stores have 50 per cent market share of imported goods while in many categories like chocolates and breakfast cereals, their share is over 90pc.

Abrar said majority of manufacturers have agreed to comply with the shelf-life requirement but have refused to change packaging for Pakistan citing insufficient volumes. He said manufacturers already have Halal certificates with existing Halal bodies but they are reluctant to obtain new certificates from specific bodies as it increases their cost.

He said countries like Saudi Arabia, the UAE and Turkey etc do not have any Halal certification requirements as their manufactured products already produce 100pc halal products.

The SRO237 mandates printing of ingredients and details of the products i.e. nutritional facts, usage instructions etc of imported products in Urdu and English on the products. In addition to that, the SRO mandates the printing of Halal Certification body logo on the packing.

Published in Dawn, March 24th, 2019