The potential for profit has spawned professional anti-counterfeiting claimants. Following the introduction of punitive damages under the Food Safety Law—which raised compensation from three to ten times the purchase price—the formerly unprofitable food sector saw an influx of such professionals. While this has helped standardise food business operations, it has also encouraged dubious practices, such as manufacturing counterfeit goods solely to launch claims.
Alternative food systems are well-established abroad, whereas in China they remain in their infancy. These systems advocate direct connections between consumers and producers, on the grounds that fewer intermediaries reduce food safety risks.
Small-scale household production differs markedly from large-scale factory manufacturing. There is a strong need for regulatory standards and requirements that are more tailored and accessible for small-scale operators, such as individual farmers and artisan workshops.
Food safety has recently captured public attention once again, though not through a major safety incident. On one hand, news reports have repeatedly highlighted “exorbitant fines”: a farmer in Zhejiang was fined 50,000 RMB for selling 700 RMB worth of self-reared pork; an elderly vendor in Luoyang, Henan, faced an 110,000 RMB penalty for making just 21 RMB in profit from selling vegetables; and several eateries were fined 5,000 RMB each for adding shredded cucumber to cold skin noodles… Such cases, which run counter to everyday experience, compel us to ask: is it fair to levy heavy fines on ordinary farmers, street vendors, and small-scale restaurants operating on slim margins?
On the other hand, the controversy has prompted positive adjustments in regulatory revisions. Recently, the State Administration for Market Regulation successively updated the *Measures for the Administration of Food Operation Licensing and Filing* and the *Measures for the Supervision and Administration of the Quality and Safety of Edible Agricultural Products in Market Sales*. These revisions have effectively greenlit previously contentious practices, such as selling pre-sliced cucumbers and dried goods.
Even so, challenges persist. Some farmers still struggle to secure the necessary qualifications to produce processed goods. Furthermore, the stringent penalty framework under current regulations leaves street vendors, restaurants, retail shops, and even online sales platforms vulnerable to professional anti-counterfeiting claims—a predicament that has become a mutual “headache” for both those subject to enforcement and the regulators themselves.
On 27 July, Foodthink, in collaboration with Tencent News’ *Let’s Chat Science*, hosted a roundtable discussion featuring anthropologist Zhong Shuru (who researches wet markets and sustainable food systems), specialist lawyer and Standing Director & Deputy Secretary-General of the Beijing Food and Drug Safety Rule of Law Research Society Zhang Xueming, and rural entrepreneur Li Jie. Drawing on their expertise in legal regulation, professional claimants, and ecological agriculture, the panel examined the dilemmas and survival strategies facing small-scale farmers, street vendors, and family-run eateries amidst the pressures of exorbitant fines and professional anti-counterfeiting activities.
This discussion also builds on our recent participation in the revision of the *Measures for the Supervision and Administration of the Quality and Safety of Edible Agricultural Products in Market Sales*. Thanks to our submitted feedback being adopted during the revision process, dried fish, vegetables, and fruit may continue to be sold. Moving forward, we hope that legislation will adopt a more “accommodating” stance towards small-scale farmers who produce and sell their own goods.
Roundtable Guests
Zhang Xueming
Specialist lawyer; Standing Director and Deputy Secretary-General of the Beijing Food and Drug Safety Rule of Law Research Society.
Zhong Shuru
Anthropologist researching wet markets and sustainable food systems.
Li Jie
Cooperative director and rural entrepreneur, formerly a village-based social worker.
Moderator
Wang Hao
Foodthink editor.
I. Professional Claimants: Whistleblowers vs. Profit-Seekers
Wang HaoFrom a grandpa in Henan fined 110,000 yuan for making a 21-yuan profit selling vegetables, to a farmer in Zhejiang fined 50,000 yuan for selling 700 yuan worth of meat from a pig he raised himself, we can see a disconnect between existing food safety regulations and everyday lived experience. Both cases were indeed rectified in hindsight. In fact, if our regulators lack a deep understanding of producers, problems and biases are bound to arise during enforcement. Food safety enforcement concerns not only market vendors but also many smallholder farmers. Li Jie is the head of a rural cooperative; we invited her to share what challenges small producers face in their daily work within the food safety sector.Li Jie: One experience we ourselves have had relates to being targeted by professional claimants. Green plums are a very traditional crop in our area. Many villagers make green plum wine at home, and local restaurants and farmhouse restaurants sell it in bulk. Our cooperative used to make this plum wine too; we drink it ourselves, and there are no food safety issues. However, a partner who helped us sell it online was later complained about by professional claimants. After the town’s market regulators came to investigate, our partner was fined heavily. Although we, as producers, were not fined, the cooperative members were frightened and anxious. Plum wine falls under agricultural product processing, and operating without a licence is illegal. We consulted the investigators on how to improve our compliance, only to discover that licences for small workshops are only available for distilled spirits like baijiu in Guangdong. For infused wines like ours, there’s no small workshop licence pathway. To get licensed, we’d need to build a factory, which could cost nearly one million yuan—far beyond our means. The town council even suggested we partner with existing small workshops to co-invest and upgrade into a distillery, but the costs remained prohibitive for us.
Earlier, some suggested we outsource the processing to external factories. We consulted several disteries, but after deliberation, we decided to handle it ourselves. One factor was cost. Fresh green plums in our area are actually bought very cheaply—just 8 or 9 mao per jin over the past two years, even less than one yuan. Our cooperative pays slightly more to farmers and processes the plums in-house; outsourcing would likely skew the economics. Furthermore, we wanted to keep the processing within the village so that the labour income would stay within the community. Additionally, since we practice ecological agriculture, we hoped to process the produce in an environmentally friendly, ecological manner, rather than simply handing everything over to a commercial processor.
Nevertheless, due to various circumstances, we ultimately had to resort to contract manufacturing with an external processor.
Wang HaoIn Li Jie’s story, the cooperative’s product ultimately came under the scrutiny of “professional claimants.” As these activists become increasingly professionalised, how should we view them? Some regard them as whistleblowers within the food safety system, while others see them as deliberately nitpicking to extract hefty compensation payouts.Zhang Xueming: Professional anti-counterfeiting in food safety is a highly contentious issue, both in academic circles and in practice. The emergence of professional anti-counterfeiters originally traces back to our country’s legislative adoption of punitive damages. Prior to this legislation, all compensation claims under domestic law adhered to the compensatory principle. For example, if tortious conduct turns a level patch of ground into a hole, compensation merely requires filling it back to its original state; whatever was taken is reimbursed, with no scope for profit. When the Consumer Rights Protection Law of the People’s Republic of China introduced punitive damages in the 1990s, it stipulated triple compensation. In other words, a loss of one could be claimed as three, yielding a net profit of two. Because it proved financially rewarding, the profession of exposing counterfeits was born.
In 2009, the Food Safety Law of the People’s Republic of China was enacted, raising the compensation from three times the value of the goods (as set out in consumer protection regulations) to ten times. This further widened the financial incentive. Following the second revision of the Food Safety Law in 2014, the statutory minimum compensation was increased from 500 yuan to 1,000 yuan. Practically speaking, a pack of instant noodles subject to a counterfeiting claim might yield a negligible sum under a strict tenfold calculation, but the new minimum threshold guarantees at least 1,000 yuan. Consequently, the previously unprofitable food sector saw an influx of professional anti-counterfeiters, leading to a surge in food safety claims. This has become a major headache for affected enterprises, particularly importers. A successful claim can force a product off the domestic market, even over a minor labelling defect.
● Professional counterfeit fighters target food purchased via overseas personal shoppers. Source: Beijing Evening News● Professional counterfeit fighters target food purchased via overseas personal shoppers. Source: Beijing Evening NewsTo be fair, the activities of professional claimants have played a role in standardising the operations of food businesses. Yet, in practice, these cases have often been excessive and repetitive. The high volume of lawsuits consumes considerable time, energy, and judicial resources, leaving both courts and companies increasingly fatigued. Furthermore, some claimants actually fabricate the very defects or counterfeits they later report, causing significant disruption to the food industry. For instance, they might spot a product with just a few days left on its shelf life, tuck it away in a blind spot where supermarket shelf-stackers won’t see it, wait until it expires, purchase it, and then demand compensation. This breed of claimant is deeply resented, even by fellow professionals in the field; it’s simply not playing fair. That said, food businesses must first look inward to tackle this issue: they need to strengthen self-regulation, standardise their operations, and ensure strict compliance with all applicable laws and regulations. At the same time, companies should promptly report those who fabricate claims, take a firm stance against such abuse, and involve the police to handle these matters as fraud.
Wang HaoFrom an enforcement perspective, grassroots market regulation authorities often find themselves at a loss when dealing with professional claimants, giving rise to a ‘no report, no investigation’ approach. This reminds me of a recent news story: some small eateries operate without a licence to sell cold food, but serve a simple smashed cucumber salad, which then becomes the subject of a professional claim. A plate of cucumber salad isn’t worth much, yet the resulting fine runs into the thousands. The fingerprints of professional claimants are all over it. Could this wave of claims targeting small vendors and eateries lead to penalties that are wholly disproportionate to the actual infractions? How ought we to evaluate the guidelines for discretionary enforcement in such contexts?Zhang Xueming: Regulatory oversight should indeed be differentiated for small-scale vendors. Firstly, such cases are generally meant to fall under provincial “Three Small” management regulations. As a rule, once placed under “Three Small” management, penalties tend to be comparatively lenient. Secondly, provincial market regulation bureaus have each established discretionary guidelines for administrative penalties under food safety law. These outline specific provisions for mitigated or reduced penalties, as well as exemptions, and each province has issued corresponding directives and policies.
The current issue of disproportionately heavy penalties for minor infringements against small vendors likely stems from two factors. On one hand, individuals may need to verify whether they have applied for recognition as small vendors and whether they are formally included in “Three Small” management. On the other hand, from a broader regulatory perspective, these lenient policies and regulations have not been effectively utilised or implemented. I believe these issues can be resolved.
II. What lies ahead for small-scale farmers, street vendors, and independent eateries?
Wang HaoMuch like Li Jie’s experience, I’ve previously come across similar cases. For example, some agricultural cooperatives wanted to process their fresh peppercorns into peppercorn oil. They faced a choice: outsource production or build their own facility. Outsourcing wasn’t an option as there were no suitable local factories, while building their own proved prohibitively expensive. Ultimately, the plan was abandoned. Zhong, you encounter many farmers during your anthropological fieldwork. Do you typically look into matters like this?Zhong Shuru: This is actually quite a common situation. For those engaged in ecological farming, selling fresh vegetables is by far the least profitable. From the consumer’s perspective on food pricing, people might expect vegetables to cost at most 3 or 4 yuan per 500g; when they’re suddenly priced at 10 or 15 yuan, it’s simply not acceptable. On top of that, vegetables are highly perishable, making profitability even harder to achieve. So, I completely understand why ecological farmers like Li Jie want to move into processing agricultural produce—to add value to their products and stay afloat. Raw green plums might only fetch a few jiao per 500g, are difficult to store, and barely break even; but if turned into plum wine, the added value increases, yielding some actual profit. However, it is true that processing poses a major hurdle, as smallholders lack the necessary certifications and capital to operate. For instance, selling flour is cheap, but processing it into biscuits requires building your own factory, which would demand an upfront investment of a million or two yuan. How could a small farmer possibly come up with that kind of capital overnight? Even if they outsource production to another factory under a contract arrangement, they face numerous demands: minimum output volumes, compliance with raw material specifications, and so on. Since the contract manufacturer is using their brand to produce the goods, they are effectively assuming a portion of the risk. This dynamic introduces a complex web of trust, alongside extensive coordination around financing and quality control.
As things stand, the broader regulatory environment is not particularly conducive to ecological farming, particularly when it comes to processing. Basic, rudimentary processing—such as selling home-cured meat—usually flies under the radar and rarely causes issues. Products of this nature are commonplace in virtually every market, especially in peri-urban or rural areas. If such practices were to be subjected to strict enforcement, the boundaries of compliance would become excessively broad. I believe the crucial dividing line should be whether the processing alters the product’s original properties.Zhang Xueming: Article 36, Paragraph 3 of the Food Safety Law of the People’s Republic of China explicitly states that specific management measures for small-scale food production workshops, food vendors, and similar entities are to be formulated by provincial-level authorities, including provinces, autonomous regions, and municipalities directly under the Central Government. In practice, the licensing prerequisites and enforcement protocols for these small workshops, traders, and vendors vary according to each province’s local characteristics.
Some regions have already introduced specific management regulations for the so-called “three smalls” (small workshops, small traders, and small vendors), while others have yet to keep pace. Furthermore, local interpretations of what falls within the scope of the “three smalls” and their applicable conditions differ. For example, if a locality does not classify home-brewing or small-restaurant brewing under the “three smalls” category, operators would instead be required to obtain a production licence under the Food Safety Law—a route with significantly higher barriers to entry and heavier penalties for non-compliance.
Moreover, there is a clear need to open up more channels for smallholder farmers, small traders, and the general public to participate in legislative drafting and the revision of regulations. We know that large enterprises typically engage in legal and legislative processes through industry associations or legal counsel. However, cooperatives like Li Jie’s, or other smaller-scale businesses, have comparatively fewer opportunities to do so.
First, local governments or businesses themselves could consider initiating associations. For instance, establishing a grassroots organisation for small workshops, or strengthening ties with industry bodies such as consumer protection associations, would enable active participation in the legislative process when relevant departments draft new laws.
Second, stakeholders are advised to monitor legislative agendas and standardisation plans published by government bodies. By keeping an eye on the websites of the State Administration for Market Regulation, the National People’s Congress, and various standardisation institutions, interested parties can submit timely feedback and suggestions to help refine and improve relevant regulations.
Additionally, it is important to follow relevant media coverage to stay informed about changes in food safety legislation, thereby enabling a more effective response to food safety challenges.
Wang HaoFoodthink has previously examined how other nations manage food safety. For instance, smallholder food production is classified under US law as a cottage food operation, subject to considerably less stringent standards than corporate sales. As long as annual gross sales from food items do not exceed $50,000, operators may produce certain goods at home—such as baked goods, canned jams, or jellies—and sell them directly to consumers. While national contexts differ and direct transplantation is impossible, could China explore the adoption of comparable regulatory frameworks?Zhong Shuru: That is certainly the case. Take Li Jie’s cooperative, for instance: they sell directly to consumers, often producing and selling their own wine without involving any middlemen. Ecological agriculture is still in its infancy here, but abroad it has evolved into a substantial framework known as alternative food systems. This operates as a parallel network to mainstream channels like supermarkets, wet markets, and e-commerce, advocating for direct connections between consumers and producers. The more intermediary steps there are, the greater the food safety risks we face. Goods found in wet markets or supermarkets typically pass through at least three to six different tiers from farm to point of sale. The longer and more convoluted the supply chain, the more opaque the information becomes and the easier it is to conceal. End consumers are consequently left in the dark, facing an information black box. For example, if I had stir-fried tomato and eggs for dinner tonight, supermarket-bought tomatoes leave me guessing about their provenance. But if I purchased them directly from a farmer I know, the information is clear. This is precisely why we must encourage short-chain sales in all forms: the shorter the chain, the more transparent the information.
Currently, however, short-chain sales represent only a small fraction of the overall market. One reason is that many consumers are unaware of where to buy such wholesome foods. Another is that ecological farming demands higher cultivation standards, resulting in limited yields and scale, which keeps market share low. In Europe and the US, it accounts for around five per cent of the market; in China, it likely does not even reach one per cent.
The contradiction lies in the fact that short-chain production is fundamentally built on trust between producer and consumer. It often lacks formal standards or certification labels to vouch for it. When this informal trust-based system—rooted in interpersonal relationships and product integrity—must simultaneously comply with formal market regulations and legal frameworks, conflicts inevitably arise.
How can we bridge these small-scale, informal operations with formal channels such as supermarkets and e-commerce platforms? When the underlying trust mechanisms are so fundamentally misaligned, forging this connection remains an unresolved challenge in both academic research and practical application.
Li Jie: As a small-scale farmer, I am not exactly well-versed in regulatory frameworks or the intricacies of food law. From our perspective, I believe a tiered regulatory framework would be much more appropriate, given the stark differences between small-scale household production and large-scale industrial manufacturing. While basic hygiene and safety standards must be maintained, we hope for more accessible regulations and requirements tailored to small farmers and workshops, which would help us overcome the hurdles in obtaining necessary certifications. Take the US cottage food laws mentioned earlier, for instance. They feature practical, realistic provisions for small agricultural enterprises, rather than a rigid one-size-fits-all approach.
Compiled by: Hu YunwenUnless otherwise stated, all images are courtesy of Foodthink
Originally published on Tencent News’ “Science Talk” column
Reprinted here with permission from Foodthink’s WeChat Official Account
Zhang Xueming
Zhong Shuru
