Select Committee on Food Standards First Report


Submitted by the National Federation of Retail Newsagents


  The National Federation of Retail Newsagents (NFRN) represents approximately 25,000 independent small businesses in all parts of the United Kingdom. Many of our members operate on the edge of viability. Profit margins are low—net margins of 1 per cent are not atypical, and small increases in cost or losses in income can make all the difference between survival and bankruptcy.

  A recent combination of falling retail margins and increasing carriage charges (the transport charges imposed by magazine wholesalers) has led to a revenue squeeze for the smaller retailer in particular. The result has been an increase in the rate of bankruptcy from 1.5 per cent to 3.6 per cent in the years 1994 to 1998. Work by London Economics shows that 10,000 outlets could be at risk over the next five years.

  This means that we are particularly sensitive to government action which might increase our costs. This submission is therefore intended to highlight the implications of the proposed levy for the purposes of funding the Food Standards Agency. We will also be responding to the joint MAFF/DoH consultation on the proposals.


  This clause gives the Secretary of State for Health a general enabling power to impose a levy on food premises and specifies the broad categories of work for which funding may be met through the levy.

  The NFRN has noted that the powers provided under this clause do not deal with the detail of the actual rate of the levy or which premises will be liable to pay and that this will be covered in secondary legislation. As mentioned above, we will also be responding to the joint MAFF/DoH consultation on the levy itself.

  However, it is the draft Bill which introduces the concept of the levy, and the Food Standards Committee must acknowledge the implications of this. It is clause 23 which gives the Government the power to raise more of the costs of food safety work by means of a levy on the food industry. it is, therefore, clause 23 with which the NFRN are most concerned.

  We can not emphasise enough the potentially damaging impact of any increased costs on our members' livelihoods. With UK supermarket rates of return being amongst the highest in Europe, the larger stores and supermarkets may be able to absorb the costs of funding the Food Standards Agency without discomfort—but this is certainly not the case for our members.

  Many newsagents stock a variety of grocery products in their shops. It is no coincidence that these types of stores are also known as "convenience stores" and that the distinctions between convenience stores and newsagents are blurred.

  They provide a valuable service to the customer, who can choose to cycle, walk or even stroll to the shop, without having to use his/her car or public transport. Much as supermarkets are now an integral feature of contemporary life, so are environmental concerns. For day-to-day essentials, the local newsagent can save on car-borne trips to the supermarket and thus save on carbon monoxide emissions, helping to build a healthier nation.

  The government must recognise that these local shopkeepers, who provide an essential service to the community, simply can not afford to be financially penalised in the same way as the major stores.

  There is only one fair way of imposing the associated costs of setting up the Food Agency and that is by graduating the levy. And the means of calculating this should be included in the draft Bill, to be considered along with the appointment of chief executives and directors and the delegation of powers to make emergency orders. After all, you wouldn't expect anyone to deliberate over choosing a new car before they knew where the funds were coming from.

  The Government must acknowledge that many small retailers operate with profit margins on the edge of viability. It is absurd to treat superstores and corner shops equally in this respect. It is just not good enough to use administration costs as an excuse to justify the flat rate levy. And it is not good enough to omit any of the details of recovering costs from the Bill itself.

  This is a matter which needs to be examined by the Food Standards Committee whilst, and not after, the draft Food Standards Bill is scrutinised. The National Federation of Retail Newsagents urges the Committee not to overlook this crucial aspect of the proposed legislation.

March 1999

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Prepared 12 April 1999