Regulatory Outlook | Food Law | July 2018

Current issues

Welsh Assembly: Minimum Unit Pricing for Alcohol Bill

The Welsh Assembly has agreed the wording of the Minimum Unit Pricing for Alcohol Bill.

It is expected that a consultation on the minimum unit price will be opened towards the end of 2018, with new minimum unit pricing legislation coming into force in 2019.

We expect that this will add to the pressure on the government to adopt similar regulations in England.

Food Standards Agency: acrylamide and furan survey

The Food Standards Agency (FSA) conducted a study between January and December 2017 to look at levels of acrylamide and furan in an "extensive range of UK retail foods". This was part of an on-going response to the European Commission's recommendation to all Member States to investigate the levels of these chemicals in food and drink.

The FSA has reported that the levels found do not increase concern about the risk to human health and the FSA will not be changing its advice to consumers.

EU Regulation on the reduction of the presence of acrylamide in food

This EU Regulation came into force on 11 April 2018. Food business operators therefore need to be complying with it now.

The Regulation places an obligation on food business operators to ensure that the food they produce and place on the market has levels of acrylamide that are below the benchmark levels established by the Regulation, and are also as low as is reasonable achievable.

Groceries Code Adjudicator: best practice for forecasting and promotions

The Groceries Code Adjudicator (GCA) has issued a revised Statement for Forecasting and Promotions, following its review of retailers' compliance with its initial forecasting statement of best practice, which was issued in March 2016.

Whilst the GCA's results of the review concluded that the approaches of retailers "appear to be compliant with the Code", suppliers have continued to report issues to the GCA. Consequently the GCA decided to update its initial statement and consider issues relating to promotions.

The GCA has requested that "retailers consider what improvements they could make to the transparency of their communications with suppliers about forecasting, to allow suppliers to meet orders and to anticipate and calculate the full costs of supply". The GCA has suggested a number of ways in which this may be achieved in the revised statement.

UK government childhood obesity plan

The government has published chapter 2 of its childhood obesity plan.

Key points include the following:

• a possible extension of the Soft Drinks Levy to sugary milk drinks;
• a consultation on banning the sale of energy drinks to children;
• a consultation on mandating consistent calorie labelling in restaurants, cafes and takeaways in England; and
• banning the promotion of unhealthy food and drink by location in retail and the out-of-home sector –  specifically at checkouts, the end of aisles and store entrances.

In Focus: Brexit

Is any new EU legislation expected to come into force and effect before the end of the transition period?

Yes, in particular the controversial requirement to specify when the primary ingredient of a food differs from the stated (or implied) country of origin of the product.  This comes into effect on 1 April 2020.

Is a new regulator needed, or do additional powers to be given to an existing regulator?

Food regulation is governed by the Food Standards Agency (and equivalents in the devolved nations) and DEFRA; and enforced in the main by local authorities.  Therefore no new regulator is needed post-Brexit. However, there will be an increase in workload for these regulators, so there will be a need to provide additional funding and recruit skilled staff.

If regulatory equivalence is not achieved, there will also be a need to increase the current resourcing at Border Inspection Posts.  Currently, only non-EU food is checked to ensure that it meets hygiene, safety and labelling standards.

The UK regulators are, however, dependent on activities carried out by the European Food Safety Authority (EFSA) in terms of scientifically assessing the safety of food ingredients.  None of the existing UK regulators carry out the functions of EFSA.  Post-Brexit, the UK can pay to have access to the EFSA services, which is the most likely outcome.

Is there an existing "equivalence" or "recognition" regime for recognising Third Country regulatory regimes?

Yes, in certain areas of food law (such as approved establishments that produce food of animal origin) there is recognition under the EU regime that certain Third Countries meet the standards required in respect of certain foods.

When the UK becomes a Third Country, we would hope its food regulatory regime is recognised as part of any agreement.  If there is no agreement, there would be a period of time when UK businesses would need to go through more laborious processes in order to export into the EU.  This would be significant given that 72% of UK food and drink exports (excluding alcoholic drinks) go to the EU.

Post-Brexit, the UK will also need to be satisfied that it can similarly recognise the regulatory regime of Third Countries.  Currently, the EU makes this assessment on the UK's behalf.  This is likely to be challenging, not least because there are not enough skilled personnel to carry out this task.

A further concern in the food sector is the so called "hidden hard Brexit" around rules of origin.  This has been explained in an excellent report by the FDF.  In essence, assuming the UK and EU can agree a free trade agreement (which will hopefully avoid the imposition of tariffs on food and drink), for both sides to benefit from that arrangement, the goods will need to meet the rules of origin requirements.  There is a risk that a food product that is made from raw materials that are imported from Third Countries may not be considered to have "originated" from the UK and therefore would not benefit from the free trade arrangements when exported to the EU.

Does current UK government policy mean that (subject to the terms of a future trade agreement between the UK and the EU) material changes to regulation or enforcement are likely post-Brexit?

The relationship between the UK and the rest of Europe in relation to food exports and imports should mean that no significant regulatory changes are made. 40% of the food consumed in the UK is from the EU, and the EU is the UK's biggest export market. Having that degree of dependency provides a strong incentive to maintain regulatory alignment and trust in each other's systems and procedures.  Food manufacturers are also going to be unwilling to engage in a situation where they are required to produce two varieties of the same product – one for the UK market and one for the EU.  Therefore any attempts by the government to introduce material changes to regulation, and attempts to then enforce that legislation, would likely be strongly resisted.

However, in the longer term, it may well be possible for government policy to promote food innovation through changes in regulation but still ensure mutual recognition with the EU.  There is also the prospect that free trade arrangements with other countries may require regulatory changes.

What should businesses be doing now to prepare for Brexit?

Whatever the future Brexit deal, so many of the issues for food and drink businesses center around the supply chain.  Focus your Brexit planning by conducting a full review of your supply chain and, in particular the following:

• Sourcing: where are you sourcing your raw materials or products from? Are there options to source from the UK?  Are any of your products likely to be affected by rules of origin?  Have you worked out the cost to your business in a worst case scenario (a 'hard Brexit' and WTO tariffs)?
• Borders: do you import or export raw materials or finished product across borders? If there are delays what are your contingency plans, particularly for fresh and chilled items?
• Workers: have you taken steps to reassure and assist your own workforce?  If Brexit results in a skills shortage, are you able to get involved to support the development of more homegrown talent?  Could automating part of your processes assist in addressing any skills shortages?