The entanglement of H.J. Heinz Co. in China’s latest food scare highlights a key concern for international and local firms: how to keep track of ingredients from diverse sources in a country where food supply tracing technologies are far from the norm.

The US food maker apologised to Chinese consumers last week and said it would tighten controls over suppliers after it was forced to recall some infant cereal from store shelves due to excess levels of lead.

Food safety scares erupt regularly in China – KFC parent Yum Brands Inc, McDonald’s Corp., Wal-Mart Stores Inc. and Fonterra Co-operative Group Ltd have all suffered recently – and such incidents can seriously dent sales.

But barcode tracking systems for produce, common in the US and Europe, are largely absent.

“Standardised traceability of food products does not currently exist in China. It’s a long way from it,” said David Mahon, Beijing-based managing director of an investment firm focusing on China’s food and beverage sectors.

China’s food traceability systems and regulation were classified as ‘poor’ in an August report from the Institute of Food Technologists. This was the lowest score of around 20 countries included.

Food safety barcodes store details such as the farm of origin, dates of harvest, planting, storage and shipment, meaning clients down the line can trace a particular batch and find out how and why any issues occurred.

Some firms have tried to bring the system into wider use in China – French grocer Carrefour SA launched a barcoding system last year for fruit and vegetables – but the technology has failed to catch on due to the high costs of implementation throughout scattered supply chains.

Heinz said it had identified the supplier and ingredient – a skimmed soybean powder responsible for the recall of four batches of its AD Calcium Hi-Protein Cereal from stores in eastern China, but added the firm needed to do more to keep suppliers in check.

Consumers in China are highly sensitive to issues of food safety, especially with baby products, after powdered milk tainted with the industrial chemical melamine led to the deaths of at least six infants in 2008. Danone SA and Abbott Laboratories saw infant formula sales in China plunge last year after concerns over a potentially fatal bacteria in a supplier’s product. Tests later showed the initial finding was incorrect.

China has soaring levels of soil and water pollution, with seven out of the top 10 farming provinces among the areas most exposed to heavy metal pollution such as lead, according to an HSBC report.

Major firms, including fast food chains McDonald’s and Burger King Worldwide Inc., said they had put in place stringent testing and auditing procedures in China to avoid issues such as contamination from water and soil pollution.

But agricultural supply chains in China tend to be highly fragmented with most farms still small-scale. What’s more, while China’s regulators have tight food safety rules, industry insiders said the watchdogs simply did not have the manpower to properly enforce them.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.