MEMORANDUM 6
Submitted by British Retail Consortium
Stores selling predominantly food, including
non-specialised food stores such as supermarkets and specialised
food stores, accounted for 45 per cent of total retail sales £80.4
billion in 1997—10.35 per cent of GDP by expenditure. Own
label products now account for 45 per cent of all food and drink
sold in the UK. BRC represents 90 per cent of the total retail
trade in the UK, operating in excess of 321,000 shops and stores,
occupying over 30 per cent of commercial property portfolio by
floor space and providing employment for about 2.9 million people,
some 11 per cent of the workforce.
Membership covers all forms of retailing, from
the large multiples through to the corner shop and machine vending.
Retailing is a major engine of employment growth
in the economy, creating 126,900 net new jobs in 1997.
CLAUSE 1: THE
FOOD STANDARDS
AGENCY
Retailers would question why government is proposing
merely that the Agency has "functions" conferred on
it rather than duties. BRC would prefer the latter to convey the
full import of government's serious intentions regarding food
standards and safety.
BRC believes the Bill should include a broad
public interest perspective wider than that spelled out under
paragraph 2 regarding public health and the interests of consumers
in relation to food. This would place its duties within the context
of the economy and employment generally.
BRC would also suggest that the Bill ought to
acknowledge in these introductory, scene setting clauses, the
lead role played by EU and international institutions like
the Codex Alimentarius on food standards and safety issues.
CLAUSE 2: APPOINTMENT
OF MEMBERS
Subsection 1: BRC believes that regional
representation within the membership of the Agency will be
disproportionately high, at four members (at least one
for Wales, at least two for Scotland and at least one for Northern
Ireland) from within a team of 12 members which the notes say
government expects will normally be appointed (explanatory notes).
Subsection 4: The BRC firmly believes that a
person's competence ought to be the sole criterion for appointment
and that as long as all members have fully disclosed their interests
in matters of relevance to the work of the Agency, as proposed
under paragraph 9 of Schedule 1, the context of their views can
be fully understood and it would be perverse to disqualify them
from membership on the basis of their professional interest in
the issue.
The explanatory notes state that " .
. . although the Bill does not specifically require it, the Agency's
procedural rules would be expected to prevent a member with an
interest in a particular matter from taking part in discussions
on it. "This strongly infers that the terms of appointment
would in effect preclude any food retailer and possibly many other
food industry experts, academics and consumer representatives
or advocates from being an Agency member. For the Agency to be
a true centre of excellence it must draw on the best experts.
The use of a register to declare all members' interests would
ensure openness. Thus, the agency would have access to best competence.
The Agency should take an inclusive approach
to membership, as it should also to membership of any advisory
committees the Agency feels it may need to establish to fulfil
its duties (Clause 6, subsection 1).
CLAUSE 3: APPOINTMENT
OF CHIEF
EXECUTIVE AND
DIRECTORS
Subsection 3: BRC believes that the post of
Chief Executive ought to be advertised and subject to open
competition on every occasion and the appointment made by
the Secretary of State for Health, rather than be a matter for
the Agency, with the appropriate authorities, to internalise.
CLAUSE 6: OTHER
ADVISORY COMMITTEES
The same procedures for declaring and registering
interests which apply to the Agency membership ought to pertain
to the advisory committees, both regional and advisory (see comments
on Clause 2, subsection 4 above).
CLAUSE 13: POWER
TO CARRY
OUT OBSERVATIONS
Subsections 7 and 8: The Bill as proposed would
give the Agency powers to publish information from "observations"
which it has or had had carried out if it appeared to be in the
public interest (clauses 7 and 8b). Only matters of confidentiality
would mitigate that action (clause 8a). This action of releasing
the information into the public domain could prejudice any subsequent
legal action taken.
The explanatory notes do not assuage retail
fears on this. After the reassurance that " . . . any information
obtained could not be used directly for the purposes of food law
enforcement" comes the reminder that " . . . the information
gathered would normally be passed to the relevant enforcement
authorities who would then take a decision on the need for further
investigation." Since the information could have been aired,
possibly selectively, in the media, we urge that subsection 8a
be revised to acknowledge also that the Agency should have regard
to the likely due processes of law which may ensue, and ensure
those are not undermined by the Agency's need to be transparent
in its operations.
CLAUSE 14: MONITORING
OF ENFORCEMENT
ACTION
Subsections 1 and 2: The BRC believes that setting
standards of food law enforcement and monitoring the performance
of enforcement authorities is probably the single most important
duty of the Agency in regard to the impact it will have on assuring
national food safety standards. A thorough review of current enforcement
arrangements is needed, which ought to be written into the Bill
as a prerequisite to any monitoring functions or, as we would
prefer, duties.
The existing structure of food law enforcement
is inadequate. A thorough national review is needed to provide:
— consistency from Land's End
to John O'Groats. While a process of greater sharing of best practice
between authorities would help, the ultimate goal should be the
adoption of a recognised standard to which enforcement inspections
and inspectors can be audited.
— provide Environmental Health Officers
with specialist food safety training with sub categories
of specialism within that covering for example, retailing, food
canning, food chilling. At present, Environmental Health Officers
may work in food retail in the morning, on waste refuse issues
in the afternoon and on noise pollution in the evening.
— full use of a risk based approach
to allow resource to be focused where it is most needed and
so make better use of resource.
BRC's fuller views on what is needed from modern
food safety enforcement are given in Annex I.
CLAUSE 23: LEVY
ON FOOD
PREMISES ALSO
PROPOSALS FOR
A LEVY
SCHEME CONSULTATION
1. The BRC opposes government proposals to
give the Secretary of State power to impose a levy on food premises
to meet some or all of the cost of the establishment of the Agency,
the expenditure of the Agency and the expenditure of enforcement
authorities (Clause 23). The Agency was proposed to restore consumer
confidence in the machinery of government and as government will
benefit most from the return to confidence, it should be prepared
to fund it from the public purse. There is no integrity in government
asking the food industry to pay for its own watchdog, an independent
Agency was promised in the Government's manifesto and the decision
to provide funds or not is a political one. Public funds should
continue to pay for public work on food safety and standards (see
also 5 below). Retailers already meet the cost of complying with
food safety law within their businesses and should not have to
foot the public bill, too.
2. We believe better resource management
would see efficiency gains over the current system of food enforcement
and that any further monies identified as lacking ought to come
from public coffers, should be capped to ensure there is
no runaway inflation operating at local authority level, and should
be ring-fenced to ensure it is indeed spent on improving
food safety enforcement (see section on food enforcement, below).
3. Retailers insist that government should retain
integrity on this issue and continue to pay for the constitutional
work of central government (advice to Ministers and law-making)
and enforcement activities from public coffers. This will
ensure that the Food Standards Agency can truly be launched as
the independent body promised by Labour in its manifesto and proposed
in the White Paper. "The Food Standards Agency—a force
for change." BRC is supported in this by the caterers (the
British Hospitality Association), the British Licensed Retailers'
Association), manufacturers (Food and Drink Federation), importers
and traders (Provision Trade Federation) and farmers (National
Farmers' Union).
4. Retailers contribute to the public coffers
for constitutional and enforcement work when they pay corporation
tax (income tax as small businesses) on their profit and when
they pay business rates to fund local government activities.
For small businesses in particular, which have fewer options open
to them for cutting overheads, a levy on their businesses in the
current, strongly competitive market means taking a cut in their
profit margin. Such businesses will have to take many times the
amount of the levy to cover the cost. The National Association
of Master Bakers has calculated that a baker's shop would need
to sell 4,000 loaves to generate the £90 in profit needed
to pay the Agency levy.
Having shops close or making it more difficult
for small format retailers to remain viable runs directly counter
to government's social exclusion work where it is trying
to encourage retailers to open or remain open in areas of marginal
business viability. Again, some integrity, with joined up thinking
across departments is needed.
5. Retailers and other food businesses meet
the cost of complying with food safety law within their own
businesses. Food safety is core to a food retailer's business,
which for large retailers, starts with farm assurance costs incurred
by working with farmers, through independent inspection of suppliers,
processors and abattoirs, assuring controlled distribution networks
and a secure environment in store, even to the supplier of customer
information leaflets on food hygiene and handling in the home.
6. It is alarming to retailers that Clause 23
provides for the full costs of the Agency (start up and on-going)
and food enforcement to be recouped from food premises. The estimate
that the levy would raise £40 million per annum initially
is of academic interest. The levy is not capped, nor is it restricted
to cover the start up costs only.
7. This cost must be taken in the wider context
of other charges on food business being levied by Government.
The BRC calculates the total cost to food and drink retailers
(and thereafter, market forces allowing, the consumer) of charges
arising from government initiatives over coming months at £566
million and rising, as issues like the packaging waste regulations,
staff car park tax, electrical goods recycling, progress.
— Food Standards Agency start-up costs:
up to £30 million ((fact sheet, No. 1, 7th bullet).
— On-going food safety costs: up to
£250 million + (fact sheet No. 2, 4th bullet).
— Meat Hygiene Service enforcement
costs: £21.5 million (ex MAFF consultation).
— Fish inspection costs: £0.5
million (ex MAFF consultation).
— Egg inspection costs: £1
million (trade estimate).
— Business rate increases: £90
million (BRC estimate).
— National minimum wage implementation:
£91 million (ex HMG est. in draft regs).
— Working family tax credit operation
costs: £4 million (ex from Treasury answer to PQ).
— Working time directive: £78
million (ex DTI consultation).
8. If the Government persists in charging food
premises, the BRC must challenge the further proposal made in
the consultation paper that the new annual levy should be collected
from food retailers and caterers alone. There is no justifiable
reason why all those responsible for providing food should not
shoulder the cost IF it is to be recouped.
IF, as the levy consultation paper states (paragraph
20), " . . . improving food safety is the key consideration
of the Food Standards Agency" and IF "the government
believes that as a matter of principle any exceptions should be
narrowly defined", these other food premises, e.g., food
manufacturers, processors, slaughterhouses, farms, distribution
companies, etc., should be levied also.We would then further specify:
— all food premises should be registrable,
including those already licensed as food businesses under other
legislation. Hence current exemptions from registration for
slaughter houses and meat cutting plant, dairies, ships and places
providing institutional meals, such as schools, hotels and residential
homes.
— BRC dismisses Government's contention
that there is no realistic alternative to applying the levy to
premises at the final point of sale to the consumer. The so-called
cumulative effect which the proposal to levy only retailers
and caterers aims to avoid is very largely illusory. To quote
the government's own estimates, there are some 515,000 registered
retailers and caterers in the UK within a total of 600,000 food
businesses identified in the White Paper last year.
Government must not allow the levy to be varied
by authority or locality.
CLAUSES 25-27: PRODUCTION
OF FOOD
SOURCES AND
VETERINARY PRODUCTS
The BRC believes it would be preferable for
the PSD and the VMD to be brought within the scope of the Agency
and so enhance the Agency's powers to act throughout the food
chain directly rather than via these Directorates acting under
the aegis of MAFF. It would reduce yet further the fragmentation
between the government bodies involved in food safety and promote
greater consistency in the enforcement of food.
When giving evidence to the Committee on 9 March,
Dr Brand asked me in the discussion regarding food safety for
detailed comments on the clauses in the Bill (403). The BRC view
on clause 14 is set out below, while our views on the food safety
regime reform needed are set out in the annex.
I shall write to you next week with full BRC
comments on the Bill as drafted, ahead of your 30 March deadline.
March 1999
ANNEX
FOOD LAW ENFORCEMENT IN THE FUTURE
1. AIMS OF
GOOD LAW
ENFORCEMENT
The British Retail Consortium believes the launch
of the Food Standards Agency should trigger a review of food law
enforcement in the UK. The current system is inefficient and inadequate.
Co-ordinated activity would achieve considerable savings in some
areas and make enforcement much more effective. Good food law
enforcement should have the following objectives:
(i) The assurance of food safety and standards,
and thereby public confidence.
(ii) The encouragement of best practice in
legal compliance.
(iii) The consistent, effective use of public
funds, to achieve its objectives. Further, that it does not require
undue input from private resource within own businesses.
(iv) The application of an open and agreed
standard of compliance.
2. RETAILER ENFORCEMENT
2.1 The present enforcement system is out of
date. It is inefficient and fails to meet the needs of retailers,
large and small. The structure of enforcement responsibility is
fragmented and incapable of dealing with the modern food chain.
At present, local authorities have diverse enforcement priorities,
differences of interpretation, inadequate training, scarce
and wasted resources. This is most obvious to national and
multi-outlet retailers which frequently suffer from over-inspection
(in comparison with the risk posed by the business) and contradictory
requirements from different local authorities.
2.2 Inspection Standards
2.2.1 Standards of inspection under the
current system need to be improved. Ideally, inspection should
be carried out to an agreed, open standard which is auditable,
e.g., EN4 5004. BRC recognises enforcement bodies may need time
to work to this pending which they should improve peer review
to promote best practice. There is much work still to be done
on the risk assessment process and in identifying where the hazards
lie, so that enforcement activity can be directed more effectively
and "low risk" businesses can be subjected to fewer
visits and interruptions.
2.2.2 Specialist training of enforcement
staff, e.g., to have food retail inspectors is also required,
in order that their attention can be more effectively targeted
in the appropriated places.
2.2.3 There is also a need to enhance the
competence of environmental health enforcement staff and of
their understanding of the types of businesses they are inspecting.
This would reduce the impractical demands on businesses which
are made in some cases, as a result of poor understanding of how
businesses work.
2.3 Home/Lead Authorities
The current Home Authority system is, in essence,
based on the geographical location of a businesse's head office.
This frequently causes difficulties when that authority is small
or chooses not to give its Home Authority duties high priority.
A funding mechanism could help to improve the Home Authority's
ability to act in that capacity, but not necessarily its will
to do so.
An alternative might be to create Lead Authority
Groups so that, for example, five or six authorities specialising
in Supermarket Retailing might offer to provide such a service
in that sector of business. A retailer could "sign up"
with any of these authorities to provide the systems audit programme.
Separate groupings might be set up for Environmental Health and
Trading Standards, but they would be able to maintain regular
contact and exchange of views, which would lead to more consistent
enforcement than the current system.
Most Trading Standards authorities have trained
Lead Assessors who are capable of carrying out these audits to
a high standard, identifying the areas of non-compliance or lack
of diligence. BRC believes this may not be the case for Environmental
Health. This is a training issue which needs to be addressed
anyway if local authorities are to achieve the expected performance
levels in the area of Food Standards enforcement. This will need
to be a priority for any co-ordinating body, not least because
standards of inspection are already highly variable and need to
be regularised.
3. MULTIPLE RETAILERS
Current enforcement systems generally operate
from the bottom up, i.e., visits to individual retail and catering
outlets from where any contraventions are pursued upwards through
the chain of command, ultimately to a company's head office. This
is extremely wasteful, leading to massive duplication of effort
on the part of enforcement bodies and much wasted resource both
for enforcement and business, not to mention the frustration of
multiple retailers having to deal with the same enquiries about
due diligence procedures over and over again.
The proposal advocates an alternative "top
down" approach for businesses with multiple trading sites,
in the form of a holistic look at the business' procedures and
infrastructure to determine its ability to comply with food standards
requirements. It is an opportunity to improve the quality of enforcement;
a chance to bring value-for-money to the subject, very much in
line with "Best Value" initiatives in local government
and with Better Regulation. It would require a fresh look at the
"Home Authority" system, probably with a development
into a "Lead Authority" approach, allowing those bodies
to control and co-ordinate the audit process.
The Systems Audit is an alterative approach
to auditing and inspecting businesses with multiple premises,
based on the "top down" approach. The major element
of this proposition is a systems audit or "health check"
of a business' systems and controls. This would be carried out
by the Home (or Lead) Authority for the business and would consist
of an audit of the precautions taken and diligence exercised by
the business to ensure legal compliance. Such an audit would be
able to determine a business's attitude and commitment to compliance
as well as whether or not its procedures were sound. This is a
sensible business partnership approach and would offer opportunities
to reassure all enforcement bodies of the competence of the business
itself.
Such an audit would include visits to the Head
Office of the business, careful examination of all procedural
manuals concerned with legal compliance, visits to depots, suppliers
and retail stores to inspect effectiveness of the company's procedures.
The auditors should be free to interview staff and make some unannounced
visits.
The outcome of this would be a draft report
which identifies any shortcomings discovered during the audit.
The business should then be given the opportunity to consider
and respond to the recommendations in the draft report, and resolve
any non-compliances before the final report is concluded.
Such a "health check" of a business
forms a solid foundation for establishing local authority confidence
in the business' ability and commitment to legal compliance. However,
it is not complete without further surveillance to ensure that
it continues to be diligent in its efforts.
The Systems Audit would be backed up by random
sample inspections, co-ordinated by the Home/Lead authority.
In this way, resources can be targeted efficiently in order to
assess confidence in the various activities which are the subject
of the audit. Different procedures can be tested in different
places and the quality of management assessed. Reports would be
fed back to the Home/Lead Authority and the results measured against
the Systems Audit to see if the business continued to deliver
compliance by way of due diligence.
Such a co-ordinated inspection plan offers a
far better picture of a business than the diverse and disconnected
visits currently undertaken throughout the UK with little or no
communication of the results to any central point for review.
It also offers considerable savings to local authorities because
fewer (but more effective) inspections would actually be undertaken.
No local authority would be precluded from making
visits outside the co-ordinated inspection programme if it so
wished, but with confidence established in the system and with
businesses this should rarely be necessary.
There are many ways to comply with the law,
which have to create a balance of checks and controls to provide
a standard of confidence in legal compliance. It is therefore
for the Home Authority to determine the degree of compliance,
for which sound assessor skills need to be employed. The performance
of the business would need to be measured against "best practice"
principles to determine the degree of confidence. But over time,
BRC believe it ought to be possible to agree a standard for a
systems audit.
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