Excellent article in today’s Christian Science Monitor, entitled, Chinese exporters seek to shed taint: To keep their catfish in US markets, some of China’s top producers seek independent ratings. Article highlights a group of Chinese catfish farmers getting together to arrange to use SGS Group, a very well known and highly regarded Swiss inspection, verification, testing and certification company, to test and certify their catfish.
Mr. Ford asked my opinion on it and I said I thought it to be very smart:
This branding exercise “makes complete sense,” says Dan Harris, an attorney with Harris Bricken who advises small and medium companies doing business with China. “It is very smart. They are recognizing the reality.”
Mr. Ford’s interview with me actually came only a few hours after a long discussion I had with a large seafood importing client who had sat in on a US FDA initiated telephone announcement regarding its new rules requiring FDA plans to test of 100% of all catfish, shrimp, eel, basa, and dace from China.
My fish importing client sees these new rules as unfair and blatantly political and believes these rules will multiply until, as he puts it, “China starts buying airplanes only from Airbus.” My client also insists (and I have known this client long enough to believe him) that the processing plants his company uses to process its fish in China “are at least the equal of fish processing plants anywhere in the world.”
At an FDA initiated industry teleconference mapping out the new seafood restrictions, the FDA stated that if a Chinese company has a long record of shipping product to the United States without incident and if it can get its product certified as safe in China by a reputable third party testing agency, it would be exempt from 100% testing of its product upon arrival in the United States. Someone at that conference then asked the FDA to provide names of qualified testing agencies in China and the FDA admitted it knew of none.
I would guess SGS will qualify under the FDA’s “standards” for third party testers and, as this article makes clear, it will be better for these Chinese catfish companies to sell product at lower profit margins than not to sell it at all. I suspect other Chinese fish producers will follow the lead of this group of Catfish producers. It also would not surprise me to see individual Chinese companies in various industries start using third party/third country certification companies so as a marketing tactic.
My advice to foreign companies involved in securing product from Chinese companies with third party certifications is to make very sure their certifications are completely legitimate and not themselves a fake. I say this because our China lawyers often are provided fake certifications when they are conducting due diligence on Chinese companies.