China tightens rules on online food merchants

China will require online takeaway restaurants to use the same name as their physical storefronts and disclose more operational details, tightening oversight of the fast-growing food delivery sector as regulators seek to curb misleading practices and food safety risks.

The new rules, launched by the State Administration for Market Regulation on Thursday, will take effect on June 1.

Under the regulation, food delivery outlets operating on online platforms must ensure that their online store names are consistent with the names displayed on their brick-and-mortar shopfronts.

Operators will also be required to prominently display key information on their main webpage on a continuous basis, including their business licenses, photos of their physical premises and their actual operating address.

The rules stipulate that the actual business address must match the location listed on the operator's food service permit. Merchants must strictly comply with requirements on ingredient sourcing, facility maintenance and standard operating procedures.

Furthermore, food processing outside designated preparation areas or outsourcing production to third parties will be prohibited, a step meant to close loopholes that have enabled some vendors to operate informally or beyond regulatory scrutiny.

In a move targeting so-called "ghost kitchens," the rules introduce a mandatory label for merchants that operate exclusively through delivery and do not offer dine-in services. Ghost kitchens are those unqualified food preparation facilities that produce meals exclusively for delivery, with no dine-in space for customers.

Businesses must display a prominent "no dine-in" identifier on their main page, and delivery platforms are required to show the same label on merchant listing pages, the SAMR said.

Sun Huichuan, food safety director at the SAMR, said the key to reassuring consumers lies in ensuring that "what you order is what you get."

"To that end, the country sets out explicit information disclosure obligations for both platform operators and online catering service providers across three core dimensions: business identity, operating model and food processing procedures," Sun said.