"How Laws Affect your Business"

India is gaining worldwide admiration for its tremendous growth in food and beverage industry as it is currently valued at US$ 39.71 billion, is expected to grow at a Compounded Annual Growth Rate (CAGR) of 11 per cent to US$ 65.4 billion by 2018. Food and grocery account for around 31 per cent of India’s consumption basket according to a report by India Brand Equity Foundation. The growth of food services market in India has triggered growth across a wide range of ancillary industries, thus providing a boost to the entire ecosystem.

Every other person in India wants to open a restaurant of their own because it is one of the fastest growing sectors. But when did success come that easily. One has to face some real remonstrance to set up a restaurant. Laws are one of the back breaking works. Food services are emerging as a key contributor to the Indian economy, by means of tax generation, employment generation, and skill development, growth in the allied industries and tourism and entrepreneurship. It is imperative for the Indian government and regulators to recognize the contribution and role of the sector and help it grow and flourish.

The Laws

Food and Beverage Laws pertain to the laws of safety and distribution for the food and beverage industry. While this area of the law obviously has heavy concentration on food safety and distribution, it is also subject to laws such as the Nutrition Labelling and Education Act of 1990 (NLEA) and the Food Safety Modernization Act of 2010 (FSMA). Similarly, a wide array of regulatory agencies monitors the compliance of businesses in the food and beverage industry. These include the Food and Drug Administration (FDA) Federal Trade Commission (FTC), the United States Department of Agriculture (USDA), and a myriad of state agencies. There are also wide arrays of state and local laws that have an impact on the industry.

Areas of Concern

The primary areas of concern for the food and beverage industry, as pertains to the law, are product safety claims, accurate labelling and advertising, and food import regulations. Other practice areas that often cross over with food and beverage law include contract, business laws, distribution networks, agricultural laws, personal injury, international trade laws, and many others. “Not only the 31 licences which you need to start up a restaurant but every month there would be someone at your door knocking you and asking, ‘Do you have this to run a restaurant?’ So there is no website which informs people what to do to start up a restaurant. Operating cost is also high which put the energy down sometimes,” says Jaspal Singh Bindra, Proprietor at Punjabi Kadhai, Siliguri. Uniform National Policy should be created for restaurant licensing.

India is enjoying a wonderful roller coaster ride in food service industry. Not only Indian brands but foreign brands are also working towards taking this industry to the heights. Issues like norms and regulations could be sorted if all restaurant association bodies must be consulted before policies are formulated. Restaurateurs who are layman are witnessed to face the problem of too many governing and regulatory bodies. For which a high level empowered secretarial group can be appointed focussed on ease of doing business for the restaurant industry and moving towards a single window clearance system. 

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