Memorandum submitted by the British Retail
Consortium (X21)
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 (11% of the workforce) and retail sales were £221
billion in 2001. Grocery retailing is significant in macro economic
terms and was valued in June 2001 at £103 billion.
EXECUTIVE SUMMARY
— To be successful, food retailers
respond accurately and efficiently to their customers' requirements.
— Growth in demand for poultry meat
is primarily driven by consumers' preference for breast meat.
— The UK has a production deficit in
breast meat, which can only be satisfied by imports.
— UK retailers have strict specifications
covering food safety, animal welfare, ethical trading and quality
criteria. These specifications must be met by all suppliers, whether
from the UK, the EU or outside the EU.
— Retailers use independent auditors
in addition to their own technical teams to inspect and approve
farms and processors to ensure that their own individual specifications
are met.
— Retailers believe that any legislative
changes affecting the poultry sector should be subject to full
consultation and the use of Regulatory Impact Assessments.
1. The British Retail Consortium (BRC) welcomes
the opportunity to comment on the Environment Food and Rural Affairs
Select Committee's inquiry into poultry farming.
BACKGROUND
2. According to the Department for Environment,
Food and Rural Affairs (Defra), British consumers purchases of
poultry meat continue to rise; to 1.7 million tonnes of poultry
meat in 2002, a 28% increase on 1991-93. This rapid growth is
driven by consumer preferences for poultry meat purchased both
at retail level and increasingly at food service level. In both
areas, breast meat is the preferred option for consumers.
3. It is this demand for breast meat that
has driven imports and exports over the last few years. While
the UK is 90% self-sufficient in poultry meat production, imports
have risen from 199,000 tonnes in 1991-93 to 362,000 tonnes in
2002. Of this, 15% are direct imports from non EU countries, with
the vast majority (85% comprising cuts. Similarly, UK exports
have risen from 84,000 tonnes in 1991-93 to 194,000 tonnes, of
which 33% are to non EU countries.
4. The poultry industry believes that the
strength of sterling and regulatory costs imposed on the British
industry are contributory factors to it being unable to increase
output to a sufficient level to satisfy consumer preferences.
5. Defra statistics reveal that British
consumers ate the equivalent of 982 million dozen eggs in 2002,
of which 85% were produced domestically. Imports from the EU were
133 million dozen in 2002, with imports from the rest of the world
at nine million dozen shell egg equivalent. (Most imports from
non EU countries are of egg products).
6. It is an offence for food businesses
to provide food, which is not safe and wholesome to the consumer.
This legislative requirement, coupled with the introduction of
the concept of "due diligence" in the 1990 Food Safety
Act has been crucial to ensuring that food companies continue
to invest in systems and procedures which offer the best possible
protection to the consumer. Retailers have therefore been heavily
involved in working with poultry producers and poultry product
suppliers to develop and implement assurance schemes that establish
production and processing standards for retailer own-brand products.
7. Since then, the development of assurance
schemes has reflected the changing customer requirements, and
the highly competitive nature of UK food retailing. Thus a number
of farm assurance schemes were created to address the requirements
of primary products within the British food chain, including for
chicken and eggs, and the British Retail Consortium developed
a generic food safety standard, the "Technical Standard for
Companies Supplying Retailer Branded Food Products."
8. Retailers support the view that responsible
business has an important role to play in the expansion of ethical
trading not only with Britain but also abroad in the developing
world. While it is important to recognise that developing nations
view the expansion of trading opportunities with the West as the
priority, ensuring that best practice standards for labour and
work place rights is a key issue for retailers. As a result, the
major food retailers have drawn up their own codes of conduct
for suppliers, often utilising the code developed by the Ethical
Trading Initiative.
9. UK retailers have been at the forefront
of changes to the welfare and the well being of animals both within
the UK and overseas. UK Retailers' Codes of Practice and Livestock
Assurance Schemes place emphasis on animal welfare standards on
farm, during transportation and within slaughterhouses. The BRC
supports the inclusion of foundation levels of animal welfare
in farm assurance schemes and the provision of premium-level welfare
standards for consumers seeking such production characteristics.
10. Retailers have responded to increased
interest in origin information on some foods by exceeding legal
requirements and providing voluntary labelling information. As
a minimum, retailers provide country of origin information for
all primary poultry cuts. However, retailers are aware that price
is the primary motivating factor for the majority of consumers
and the retailers' ability to provide accurate and meaningful
origin information on pre-packed composite foods does remain limited
by their need to maintain sourcing flexibility. Frequent label
changes to reflect changes in the origin of ingredients increases
packaging waste—a cost both to the environment and to the
consumer.
11. Part of the food retail sector's success
can be attributed to its willingness to respond quickly and faithfully
to changing consumer demands—in short- its recognition of
the principle that "the customer is king".
12. Putting this philosophy into practice
requires the retailer to acknowledge that consumers want different
things. While the majority might be interested in price, quality
and conventionally produced foods there are others who do not
share this view. The growth of the organic sector, the introduction
of "local foods", and the development of healthy eating
alternatives all provide testimony to the wide range of products
available today in food retailers and to the flexibility of the
market to serve the needs of all customers.
Factors Influencing Purchasing Decisions
| % of Respondents |
| Organic | 12 |
| Ingredients | 17 |
| Assurance Scheme | 19 |
| Animal Welfare | 23 |
| Not GM | 24 |
| Grown in UK | 28 |
| Low fat/healthy eating | 50
|
| Appearance | 63 |
| Taste | 70 |
| Sell By Date | 73 |
| Price | 76 |
| |
Source: Institute of Grocery Distribution Consumer Unit
2001
Concerns about Food Production
| Share of Respondents (%)
|
| Pesticides: Environment | 10
|
| Animal Feed | 13 |
| Additives | 14 |
| Pesticides: Food Safety | 15
|
| GM Environment | 17 |
| Farm Hygiene | 21 |
| GM Food Safety | 21 |
| BSE | 23 |
| Animal Living Conditions | 28
|
| Factory Hygiene | 45 |
| |
Source: Institute of Grocery Distribution Consumer Unit
2001
RETAILER SOURCING
CRITERIA
13. Retailers will only source poultry products that
meet their own specifications. This includes their requirements
for food safety due diligence; ethical trading standards and animal
welfare standards.
14. EU regulations mean that only products meeting EU
animal welfare and processing specifications can be imported from
outside the EU. The EU's Food and Veterinary Office (FVO) is responsible
for inspecting operations that are listed as eligible to export
to the EU. Retailers use independent auditors in addition to their
own technical teams to inspect and approve farms and processors
to ensure that their own individual specifications are met. This
means that own brand poultry products sourced from outside the
European Union are produced under equivalent conditions to those
that required of UK or other EU producers.
15. Decisions to purchase poultry products from whatever
source for retailer own brand items are made according to the
same criteria. Supplies from non-EU sources must meet retailers
own specifications, with the final purchasing decision being made
on a combination of availability, quality and price. It is important
to emphasise that the UK cannot currently meet consumers' demand
for chicken breast meat, which is increasing in popularity; while
concurrently exporting those parts of the chicken that are not
demanded by consumers, non EU producers are an important source
of supply if customer requirements are to be met.
REGULATION
16. The BRC strongly supports the Government's drive
to achieve "Better Policy Making" and believe this is
best achieved through use of the better policy-making framework,
and the five principles of good regulation, and that all policies
must be underpinned by the use of impact assessments, developed
in tandem with the consultation process. The BRC agrees with the
House of Lords Select Committee on Science and Technology that
consultations should involve as wide a cross-section of the public
as possible.
17. While we recognise that decisions must ultimately
be a matter for Ministers and elected representatives, we believe
that by fully following the "Code of Practice on Written
Consultation," that Government and its Agencies can better
inform the policy making process.
18. We therefore believe that any legislative changes
affecting the poultry sector should be subject to full consultation
and the use of Regulatory Impact Assessments.
6 June 2003
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