Enhancing the food labelling system in Indonesia: The case of food with health-related claims in small and medium enterprises

Abstract

Food labelling is an important element in realizing food safety and nurturing competitiveness. However, empirical research shows that the enforcement of food labelling policy entails complex issues in Indonesia. Taking the case of food with health-related claims produced by small and medium enterprises (SMEs), this research identifies regulatory strategies taken by the Indonesian government as well as challenges in policy enforcement. The findings indicate that the performance of SMEs in complying with labelling regulation on food with health-related claims is influenced by the business environment and institutional framework where the SMEs grow, including a weak regulatory framework, market condition and infrastructure. Furthermore, limited access of SMEs to strategic resources, including finance, skill and innovation assets have also hindered their compliance to regulation. This study addresses the importance of collaboration between multiple stakeholders to strengthen the food safety system from the ecosystem perspective. The interconnection between SMEs, government, research organizations/universities, financial institutions and other members of the ecosystem in co-creating value is expected to enhance the enforcement of labelling policy on food with the health-related claim in the future.