APPENDIX 1
Memorandum submitted by the British Retail
Consortium (G1)
INTRODUCTION
The British Retail Consortium (BRC) represents
the whole range of retailers including large multiples, department
stores and independent shops, selling a wide selection of products
through centre of town, out of town, rural and virtual stores.
In December 2001, the retail sector employed
some 2.8 million people[1]
and retail sales were £221 billion 2001[2].
Grocery retailing is equally significant in macro economic terms
and was valued in 2001 at £99.8 billion[3].
The spectrum of government departments, non-departmental
public bodies and directorate generals of the European Commission
the policies of which impact on the retail sector is considerable.
BRC therefore welcomed the change in structure which amalgamated
environment, food and farming policy as in principle, this promises
better opportunities for "joined up" Government and
in time a better understanding of the impact of proposals on the
retail sector.
We also welcomed the importance placed on the
promotion of a competitive and integrated food supply chain which
is responsive to the needs of consumers. UK grocery retailing
relies heavily on the domestic supply base and, where possible
prefers, to source from within the UK. However our primary focus
must be to meet the needs of the British consumer and the importance
of the global supply base must be recognised in this respect.
While retailers are willing to work together and with other food
chain partners on non-competitive food chain issues, food retailers
are instinctively competitive. To survive in the market they must
provide real value for money to the consumer and to respond faithfully
to his or her changing demands as a primary and overriding objective.
It is difficult to comment definitively on DEFRA's
performance after only 12 months of operation, particularly given
the unforeseen consequences of the Foot and Mouth Disease outbreak
which has been dominant over the past year.
We can however offer the following comments
and hope that they will be useful in the Committee's Inquiry.
Is the vision set out by the Secretary of State
appropriate and what progress has been made towards that vision?
The BRC supports the aims and objectives of
the new Department and on balance believes it has a sound appreciation
of the importance of preserving economic viability while pursuing
environmental sustainability goals.
ENVIRONMENT
In May 1999 Government published its strategy
for a UK sustainable development programme entitled "A better
Quality of Life, a Strategy for Sustainable Development in the
UK". This called for concerted action by business sectors,
encouraging trade associations to develop sectoral sustainability
strategies. The retail sector was one of the first to publish
a strategy, joining the Sustainability Pioneers Group with likeminded
trade associations committed to developing sectoral sustainability
strategies. BRC is currently investigating the extension of its
retail sustainability strategy to cover food as part of its response
to the Curry Report.[4]
However, retailers feel that there have been
times where the important partnership between industry and Government
has not been fully exploited. Closer involvement with the retail
sector could have provided important early warning signs during
negotiations on the Ozone Depleting Substances Regulations that
would have highlighted problems with implementation. Had industry
concerns been acknowledged the resulting fridge mountain may have
been avoided. The DTI retail sponsor function played no role in
helping to make the retail case which leads us to question Government's
ability to think across departments and again to suggest that
a greater examination and definition of the sponsorship role takes
place.[5]
FOOD CHAIN
ISSUES
Much of food retail's relationship with DEFRA
has been dominated by the outbreak of the foot and mouth disease
in the UK. FMD created significant operational problems for the
food retail sector, not least in distributing food to Northern
Ireland. If we have one criticism to make of the Department it
is that it tended to view the crisis solely as an animal health
issue and not one which also had the potential to undermine consumer
confidence in food safety and to disrupt the supply of food to
the consumer.
The BRC also welcomes the increasing Government
recognition of food retail as equal partner in an integrated food
chain. We welcome the recent enhancements to the Food Industry
Division and in particular the creation of a special responsibility
for food retailing. While we are optimistic that the division
will help ensure that the concerns of food retail are heard across
Government, we note that at current staffing levels this will
be an ambitious task. As an interim suggestion, we would welcome
the introduction of a more formal programme of secondments between
Government and food retailing to ensure that officials are given
the opportunity to witness first hand the practical impact of
policy making. The BRC would be happy to co- ordinate such a programme.
Certainly, in crisis situations, it is important that DEFRA look
for the experts in issues to help them, even if they come from
industry. It is also important that the communication channels
for issues are clear. During FMD for example it was difficult
to get through to key staff. For food retail it is important to
have queries dealt with so we are in a position to reassure customers.
As regards the role of DEFRA as the food retail
sponsor, we believe that this area would benefit further definition
to promote a clear mutual understanding between food retailing
and Government.
RURAL ISSUES
BRC has had little contact with the Department
during the development of the rural agenda. This is regrettable
given the potential for retail-led regeneration in rural areas.
We look forward to developing a closer relationship with the department
in this area in the coming year. We believe that the option of
moving responsibility for rural development from DEFRA to the
Department for Local Government and the Regions may have some
merits. It could then be considered alongside the strategy for
the regeneration of urban areas.
Is the Department engineered to deliver its objectives?
ENVIRONMENT
We have mixed views about effectiveness of the
DEFRA structure. In principle the amalgamation of farming, food
and environmental policy should create opportunities for joined
up Government. However in reality, on the environment side we
feel that in recent negotiations the department has displayed
a lack of understanding of the practical impact of proposals on
retail. Industry has already expressed concerns over the possible
implications of both the Landfill and Waste Electronic Equipment
Directives. While the transition of European policy has been well
tracked by officials, the lack of understanding of industry impact
and practical measures required for implementation has once again
been disappointing.
FOOD CHAIN
For food retailers the biggest challenge of
recent and future times is to respond positively to the recommendations
of the Curry report. The Committee should be aware however of
overlaps in policy responsibility between Government bodies which
will have a bearing on our response. For example the Food Standards
Agency is currently working on consumer expectations of farm assurance
schemes which we will need to take into account. We raise this,
as in the past, we feel that early cross Government working between
DEFRA and FSA could have improved the way issues have been dealt
with. For example, earlier involvement of the Food Standards Agency
during the FMD outbreak might have created a greater awareness
among officials that FMD had the potential to undermine consumer
confidence in food safety and was not simply an animal health
issue. Nutrition is another example of an area where DOH, DEFRA
and FSA have a stake. In handling all these issues it is important
that the sector not only sees joined up Government, but also clarity
of response.
Finally on the question of structure we would
underline the importance of policy decisions driven in England
being co-ordinated as far as possible with the devolved administrations
of Scotland, Wales and Northern Ireland. Part of the success UK
retailing can be attributed to its centralised/national approach
to business which has afforded new efficiencies and economies
of scale. These economies can be undermined if opportunities for
synergy between territories are overlooked.
May 2002
1 Labour Market Trends, National Statistics. Back
2
SDM28 Retail Sales, National Statistics. Back
3
IGD. Back
4
Towards Retail Sustainability-Protecting our Environment for
the future-BRC. Back
5
The pioneers group is a joint initiative from the Sustainable
Development Commission (SDC), DTI and DEFRA providing a forum
for the exchange of best practice amongst around 20 organisations. Back
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