A business analysis of usage of formalin in local stores and whether they have any financial benefit of using these over their competitions.

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“FORMALIN” – what does it mean?
Formalin is a solution made up of 37% formaldehyde by weight, which is stabilized by the
addition of methanol. If used in sufficiently low quantities, it does have legitimate commercial
uses, for example, to prevent bacterial growth in fish farms. Nonetheless, in larger doses or
with extended exposure, formaldehyde is considered to be toxic and cancer causing.
Uses of formalin
A laboratory study comparing formalin treated and untreated fish found that formalin treated
fish stored in ice appeared in acceptable condition for a period of 28-32 days: compared with
20-23 days for non-treated fish. However, these appearances were deceiving, as formalin
treated fish were found to have reduced non-protein nitrogen content, protein solubility, and
gel forming ability, which resulted in “poor eating quality and poor digestibility.
Formalin inside?
• Fish. The fish will be stiff, have rubbery meat, hard scales, red gills, clear eyes, doesn’t
have the “fishy smell” and no flies flying around.
• Squid. Very rubbery consistency. Unable to break the meat by hand, which you usually
could, only can be cut by a knife.
• Other sea products, including dried salty fish. Formalin will make the fish become stiff,
whitish and odorless. Even when cooked, i.e. fried, it will still be stiff.
• Tofu. Its consistency is more rubbery than usual, the surface tends to be hard, won’t
spoil after 24 hours. Normally after 24 hours, tofu would become slimy, brittle and sour.
If it is steamed, submerged in cold water, or kept in the fridge, it may last longer.
• Wet noodles. Has yellowish color, tends to be elastic, with a drug-like odor or ash-like
odor when boiled or mixed with hot water.
How extensive is its use?
The extent of formalin contamination is not entirely clear. Several studies have attempted to
measure the intensity of the problem in Bangladeshi fish markets; however, their findings have
differed substantially.
Research undertaken and published in 2009 based on a study of four fish markets in Dhaka City
found formalin contamination in only 50 of 800 fish sampled, or 6.25%. The highest percentage

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was found in the Karwan Bazaar market. Large Rui and Katla, were the most commonly
contaminated, although formalin use was also found in a number of other fish varieties
including shrimp, Mrigal, and Kachki.
A somewhat later 2010 study of two markets and three grocery stores and super stores in
Dhaka found that an alarming 42% of 100 fish sampled had been treated with formalin. These
included 70% of sampled Rui, 50% of Katla, 40% of Mrigal, 50% of Hilsa, and 0% of Sharputi.
Contamination across the five sites ranged from 20-60%.5
While percentages were not provided, a 2010 study in Mymensingh also found evidence of
formalin in imported Rui and Katla but not in local varieties of the same fish. The findings were
consistent across the five Mymensingh markets studied.
A 2012 study of five markets in Sylhet found formalin in 26 of 150 sampled fish, or 17.3%. Again
contamination occurred across the five markets, although it ranged from 6% to 26% of fish
tested. Evidence of formalin was found in Rui, shrimp, and Katla, but not Mrigal or Hilsa.
Area of study
The areas covered in the study are Gulshan-1, Gulshan-2, Sat Masjid Road, Green Road,
Shantinagar Bazar, Dhanmondi, Karwan Bazar, New Market, Rampura Bazar, Gulshan,
Malibagh, Azimpur, Mouchak, Agargaon, Badamtoli, Town Hall Market, Kalabagan, Mirpur,
Shewrapara, Kazipara, Nakhalpara and Mohammadpur.
Formalin, a curse in Bangladesh
The widespread use of formalin, in preservation of fish, fruit and other food items is posing a
threat to public health. The chemical used as a solution in water keeps fish fresh and makes
fruits like mangoes attractive. This chemical, usually used to stop dead bodies from rotting, is
now being used to preserve edible items.
The role of fisheries and livestock sectors in the development of agro-based economy of
Bangladesh is very important and promising. They contribute around 8% to national income,
which also is 32% of the total agricultural income. About 90% of animal protein in our diet
comes from fish and livestock. The fisheries sector contributes 5.10%, of the country's export
earnings, 4.91% of its GDP and provides 63% of the national animal protein consumption. Fish
and fishery products are the country's third largest export commodity contributing 5.10% of its
exchange earnings, in 2002–2003 Bangladesh earned US$ 324 million of which shrimp alone

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contributed 72% of the total by quantity and 89% by value. It is claimed that the total fish
production has increased significantly over the last few decades but it is not sufficient to meet
up the growing demand of the country. As a result imported fishes from neighboring countries
enter in the domestic market and it was reported that more than 80 metric ton of fish and
fishery products enter into Bangladesh every day through the Teknaf border from Myanmar.
Available reports suggest that formalin is sometimes added or sprayed to the fishes by the fish
traders while transporting to domestic marketing chain to prevent spoilage and increase shelf
life. Studies conducted at different markets and superstores in Dhaka city and Mymensingh
Sadar rationalizes the incidence of adding formaldehyde/formalin to fishes especially imported
from neighboring countries. It was observed in a study conducted in Dhaka city that almost 5%
shops of total consumable fishes contain formalin treated fishes those are sold in fish markets.
They found this intensity to vary market to market and species to species. They found that Rui
fish was highly affected by formalin whereas Karwan Bazar represented highest number of
formalin treated fish. In this current study mainly big fish species were investigated which
indicated a high percentage of presence of formalin in fish.
A study has found excessive formalin in seasonal fruits like mango, litchi and blackberry sold at
shops in different areas of the capital. Even shops with signboards reading “chemical-free
fruits” sell fruits soaked in formalin.
Save the Environment Movement (SEM) revealed the findings of the study through a press
conference that around 94 percent of the mangoes and 100 percent blackberries and litchis are
formalin-tainted.
How to Gain a Competitive Advantage in retail Business
Analyze target market and identify your competition: Our target market is “a specific group of
consumers at which a company aims its products and services” (Entrepreneur). A target market
is distinguished by socioeconomic, demographic, and common characteristics or needs that
make them the best audience to focus on selling to. To uncover our target market, answer the
following simple questions: What am I selling? Who will most likely buy or consume my product
or service? Before you can crush your competition, you need to know who they are. Find out
which businesses are going after your same target market. How do they differentiate
themselves from other companies in the industry? Where are they located? To find this
information, business directories can be used to search free company profiles. Information
included in the company profiles are company overview, contact information, location, key
facts, employees, and company payment rating.

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Learn from your competition and your customers. We are afraid of our competition, but rather
use them as a learning tool and assess their business model. Learn your competitors’ strengths
and weaknesses – imitate their strengths, and use their weaknesses to your advantage. Use
companies that specialize in business information, such as Meena Bazar, to construct and
analyze a competitive landscape of the target market. The business information we learn from
our rivals will help us develop the competitive edge we need to surpass them in our industry.
Intimate customer knowledge is equally important as competitor knowledge. Gaining in-depth
insights about our customer portfolio will allow us to maximize revenue potential, increase
customer retention, and boost prospective customers. We can use a mix of many tools and
methods to measure consumer insight and both our position in the market and the positions of
our competitors. Along with traditional company information resources, consider social media
analysis tools that allow consumer insight mining on a large scale.
Create an “Economic Moat”: Take advantage of barriers to entry into the market, using them
to dissuade competitors from challenging your marketing share. In some cases, an established
company’s ability to manipulate hurdles to enter and compete in its market becomes an
effective tool against new competition, further entrenching the business and preserving its
profit potential for the foreseeable future.
Stay on the cutting edge: Once gained a competitive advantage, our work is far from complete.
To be successful, we will need to continuously maintain our competitive advantage. After all,
our competitors are not going to sit back and allow us to steal their market share. We can
maintain our competitive advantage by predicting future trends in our industry, constantly
researching and monitoring our competitors, and adapting to our customer’s wants and needs.
Sometimes we may need to take chances to keep ahead of the pack and differentiate our
business, but with big risk often comes big reward – Just remember to do our research before
diving head first into new ideas.
Use Business Information Resources: The information revolution is here – take advantage of it!
It creates a competitive advantage by providing companies with new ways to outperform their
rivals. Knowledge is power, and business information companies provide just that. Reliable
business information companies include Meena Bazar, Agora, Shawpno.
Competitive issues of existing marketplace
Amongst much praise and fanfare, the
Malibagh kitchen market -- with support from
the Federation of Bangladesh Chambers of
Commerce and Industry (FBCCI) -- recently
presented itself as a formalin free market. The
idea appears to make good business sense; a
recent reported stated, “Customers from
faraway places in the city now throng the

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bazaar to buy different items, especially fish.” 12 The experience suggests that by offering a
reliable product, traders and venders can increase their sales and their prices. Hopefully other
markets and venders will follow their lead. Of course, such measures require a means to ensure
that establishments are in fact formalin free. (It would be possible, for example, for wholesalers
and venders to seek certifications from third party companies or organizations to certify their
products.) Other critics have pointed out that a handful of formalin free markets still leave most
of the population without safe options. Nonetheless, such an initiative demonstrates that being
formalin free can be profitable, and it complements and facilitates the work of government
regulators.
The involvement of the FBCCI and business leaders is particularly important. While the use of
formalin might benefit individual venders in the short term, it hurts the industry as a whole. For
example, there is anecdotal evidence that people limit their total fish or vegetable intake out of
fear of the effects of formalin. As a result, business leaders and food suppliers have an incentive
to help find a solution to the problem.
A case study of retail shop (Present Condition & competitive issues)
Fighting against Formalin: Shwapno Stepping
Forward
Formalin – this word is changing the eating habit of
ours these days in the city. People are getting
sceptical about what to eat and what not to eat.
What is formalin? Formalin is a colourless strong-
smelling chemical substance usually used in
industry of textiles, plastics, papers, paint,
construction, and well known to preserve human corpse. The use of formalin for adulteration of
food (especially fish, meat, vegetable & fruit) is now being well established in Bangladesh and it
is a very concerning issue. Government has taken various steps to prevent this usage of
formalin.
Formalin has a very negative effect on our health. It may cause kidney damage, liver disease,
memory loss, stomach cancer and various other diseases. Realizing the gravity of the situation,
the largest super store retail chain of Bangladesh
Shwapno has started their social movement against
formalin in food through a campaign ‘Say no to
Formalin’. Shwapno, a popular name amidst the city
dwellers, has started its journey on October 2008
and has established itself as the largest super store
retail chain in Bangladesh. Currently its 40 super
stores and 10 mini stores are satisfying thousands of
customers’ daily needs in Dhaka, Chittagong and
Sylhet. From the very beginning, Shwapno has

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added value to the life style of the Bangladeshi consumers including delivering the best quality
product in best price. This time, Shwapno believes that it’s about time that consumers should
become aware about formalin and its negative effect.
Shwapno stepped forward and initiated a drive against formalin. It has brought in the state of
art formalin detection digital meter to check availability of formalin in fish, fruit and vegetable
through which customers will be able to see the formalin reading in the meter. Recently on the
January 5, an event was held introducing this drive where FBCCI has also recommended
Shwapno as the formalin free super store in Bangladesh. The commerce minister Ghulam
Mohammed Quader was present as the chief guest in the program. M. Anis Ud Dowla,
chairman ACI Group, Syed Arif Azad, director general, fishers department, Kazi Akram Uddin
Ahmed, president, FBCCI, Md. Helal Uddin, vice president, FBCCI were also present in the
program as the special guest. In his speech chairman of ACI Group M. Anis Ud Dowla said, ‘From
the beginning of ACI’s journey, we have tried our best to ensure and maintain to deliver the
best quality product for the customers of Bangladesh and we believe that the newly placed
digital formalin detection kit Formaldehyde Meter has taken us one step forward to ensure the
right of the customers to judge.
The competitive advantages of SHWAPNO as a retail super shop
Becoming the market leader
For young people of our era, staying fit is an obligation. No matter how much they enjoy
devouring plates of food fried in oil, deep down the guilt of being overweight almost always
seeps in. For most of us, we are caught in a dilemma between a healthy eating pattern and rich
food. For some uncanny reason, the seesaw of balance always tips towards the unhealthy
habits. Let us imagine that we do want to eat healthy and lose a couple of pounds. How do we
go about it? Also, fruits have various uses in our lives even if we do not want to lose weight. For
some of us fruit-lovers, we use chunks of watermelon and dip it in ‘rooh afza’ for added flavour.
Likewise, some of us just like cutting fruits into cubes and eat it with custard or ice-cream.
Fruits might be available in our country in excess but are these really healthy? The apple you
eat might look very attractive and fresh but that’s because it is chemically induced to look like
that.
Formalin is an agent which is used in fruits to make it appealing and fresh. In general, it is a
colorless strong-smelling chemical substance which is derived from formaldehyde gas dissolved
in water. Recent scientific studies have shown that formalin is a carcinogenic substance which
can cause cancer. Formaldehyde Meter is a modern technology which is used to detect the
formalin in fruits. Photo: Kazi Tahsin Agaz Apurbo
So to help our generation have a healthy diet, Shwapno, ACI Ltd’s retail store has introduced
formalin free fruits to be sold at their outlets. Mahadi Faisal, Manager of ACI Logistics Ltd and
Singer by profession, explains that ACI’s main objective is to help in the development of human

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life. Mahadi is also known as a youth icon
who has gained increasing popularity since
the Close Up One reality contest. He
advocates for the youth and believes that
actions must be taken to eradicate harmful
substances from food items. So the main
aim of ACI’s retail business was to bring
about a change. “The perishable items
have to be free of chemicals. After
procurement, we check our fruits to see if
there are any substances of formalin. If
there are any, then they are immediately
rejected,” says Mahadi. He further adds,
“Today’s businessmen are mostly corrupt
and are more concerned with their own
selfish benefits. They are keen on selling fruits at low costs by injecting formalin. So to ensure
that the customers can eat healthy and live a healthy life, we came up with the concept of
formalin free fruits.” “We have introduced the Formaldehyde Meter in 41 outlets. These
devices have been purchased from the United States of America. The device is used in front of
the customers to see traces of formalin. Customers may also purchase fruits from outside and
come to our stores to check for formalin in the fruits. The testing is done free of cost,”
elaborates Mahadi.
Formaldehyde Meter Z-300 is used in all the retail stores. The detector is placed against the
fruit which is kept in a plastic packet. The screen shows the different stages of testing as it first
detects the environment in which the fruit is kept under the label of F1. Then, F2 detects the
fruit’s skin and lastly, F3 detects the insides of the fruit. If the PPM (parts per portion) is over
15, then it is alarming as it shows that the fruit contains formalin.
It has been almost four months since the technology has been introduced. But it gained
popularity in the recent few months. Summer in Bangladesh is all about fruits like pineapple,
watermelon, bananas, jackfruit
and mangoes. In addition to
that, there are fruits that are
available round the year like,
orange, pomegranate and
apples. When young customers
come to Shawpno’s retail
stores, they often look for one
of these fruits to make a light
and nutritious drink or salad.
Kamran Ahmed, an Intern from
Bangladesh Medical College
(BMC) says, “I buy apples from

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this place a lot. I trust their honesty. If I do not keep the fruits in the fridge then they get rotten
easily which means that there are no formalin substances in the fruit.”
Shusmita Mahboob, a student of American International University Bangladesh (AIUB) states, “I
am on the chubbier side and have a tendency to gain weight easily. So I need to eat a lot of
fruits. I trust this grocery store, because they test the fruits in front of us before selling them.”
She adds, “Pineapples and watermelons are my favourite summer fruits. I always buy these two
to make my signature pineapple ice-tea or watermelon shake. At times, I buy mangoes and
blend it with pineapples to create a miracle drink called ‘pina-mango’. There is nothing more
soothing than knowing that what you are drinking is free of chemical substances.”
Our country is no utopia and we should not expect it to be. But we do hold the right to live a
healthy lifestyle and enjoy the fruits that are originally the harvests of our land. Shawpno’s
incentive is noble and we, the young, generation salute them for their cause.
Governmental response
The classic solution to market failures due to formalin issues is a governmental one. Simply put,
health authorities should inspect for the use of harmful chemicals and punish those found
guilty. There are, in fact, several government regulations, agencies, and initiatives in place to
address this problem.
• The Pure Food Ordinance of 1959 (last revised in 2005) prohibits food alteration and the
use of dangerous chemicals.
• There is a National Food Safety Advisory Council to oversee food safety policy.
• There is a Consumer Rights Protection Department, which can receive complaints from
consumers.
• Each upazilla and city is to conduct inspection and enforcement drives and each district
is to host a food court.
How to avoid food with formalin
• Fish, especially sea fish. Press the fish, if it feels tender, it should be free of formalin.
Choose fish which still has its fishy smell. It’s best to buy live fish.
• Avoid dried salty fish.
• Tofu. Choose one with smooth surface and consistency. It’s safer to consume egg tofu
or water tofu (also known as japanese tofu), though this product can’t last long and is
very brittle.

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Use of formalin in Bangladesh super shops (in mg/kg)
Survey analysis (According to questionnaire)
Ques 1 Yes (10) - - -
Ques 2 Yes (08) No (02) - -
Ques 3 Yes (02) - - -
Ques 4 No (02) - - -
Ques 5 Yes (02) - - -
Ques 6 Definitely not (02) - - -
Ques 7 Absolutely (06) Reasonably (02) - -
Ques 8 Absolutely (05) Reasonably (03) - -
Ques 9 Absolutely (02) Reasonably (03) Unsure (03) -
Ques 10 Absolutely (03) Reasonably (05) - -
Ques 11 Absolutely (08) - - -
Ques 12 SMS (02)
Ad. On print
media (04)
Electronic media (02)
Leaflet (06),
posters (05),
Banners (03)
Ques 13 Social responsibility (04) Compulsory for business practice (04)

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Findings
From the survey conducted before some days ago we have analyzed some important issues and
a remarkable finding has brought out from there. Now days the super shop owners are aware
of the consequence of formalin. They are now declaring the consumers that their shops are
formalin free. Consumers also complain for not declaring that their products are not
contaminated by formalin. If the declaration is not happened then sales volume is decreased in
a noticeable rate. Consumers frequently ask questions for formalin issue. Survey has taught
that it is not necessary to use formalin for perishable product. Formalin free product Campaign
is effective for gathering consumers as well as they are ready to pay price at comparatively low
price. The consumers are ready to wait for the formalin free product if they are not available at
store. Formalin free products are reasonably expensive to provide by the superstores. The
super store should declare that they are providing formalin uncontaminated product. The super
shops are now using SMS, Ads on print media, leaflet, posters, and banners to ensure the
consumers that their products are formalin free. And last of all we found that both social
responsibility and compulsory business practice are found for gaining competitive issues for
retail business like super shops and superstores.
Conclusion
Food adulteration and particularly the use of formalin as a preservative appear to be
widespread in Bangladesh. Despite legislation and enforcement initiatives, the government
appears to be far away from a solution. While not ignoring the need for a more effective
governmental response, this report asks: can market mechanisms be marshaled to help resolve
the problem? Is there a role for civil society and citizens? Are there improvements that can be
made to the supply chain? This report suggests that a solution to the formalin problem requires
an affirmative answer to all three of these questions. If the super shops want to gain
competitive advantages then they have to follow the acts of Government and strategic issues of
other super shops available in Bangladesh.