Memorandum submitted by the RSPCA
EXECUTIVE SUMMARY
Consumers consistently state that the method
of production of food is an important consideration for their
buying behaviour. However this intention does not always translate
into buying patterns. Clear accurate labelling makes it possible
for consumers to be informed about methods of production. Although
the relationship between labelling and trade is covered by the
WTO's TBT Agreement, no definitive position has yet been taken
on the issue of animal welfare labels. Voluntary labels come outside
the remit of the TBTA and so would not cause any conflict with
the WTO. However, they have limitations with respect to informing
consumers, as the history of egg labelling in the EU shows. Some
mandatory non-product related PPM schemes are now operational
and have been notified to the WTO without challenge. The RSPCA
believes that mandatory schemes on animal welfare do improve consumer
awareness and are compatible with the WTO regimes.
1. The RSPCA welcomes the opportunity to
give evidence to the Environment, Food and Rural Affairs Committee
on the issues related to food information. The Society feels that
food information is a key tool to improve consumer awareness of
animal welfare issues and improve standards for farm animals.
The RSPCA has experience of improving labelling through legislative
means, looking at labelling in the context of WTO negotiations
and, via the Society's Freedom food scheme, in the operation of
a labelling system for higher welfare standards.
2. The right of consumers to be fully informed
is now widely recognised. Labelling makes it possible for consumers
to make an informed choice about the products that they are buying.
Labelling also makes it possible for producers of farm animals
reared to higher welfare standards to recover some of their increased
production costs in the market place. Labelling can be one of
the least trade restrictive measures, in the WTO context. Although
labelling does not provide a complete answer to ensuring that
higher animal welfare standards are not compromised, it is one
of a range of measures that can be used.
3. The market for ethically sourced foods
is increasing rapidly. The market grew by 41% between 2000 and
2002 to just over £1.5 billion (Mintel Attitudes towards
ethical foods February 2004). Animal welfare as a driver for
consumer motivation is increasing in importance. Animal issues
are viewed as the second most important ethical issue after the
environment. The percentage of people saying that they buy free
range is also increasing (56% in the 2003 survey). In the UK egg
sector, free range eggs comprise 25% of the market, of which most
are produced under the Freedom Food scheme. Consumers say that
they want high welfare products and are concerned about the welfare
of farm animals. For instance animal welfare friendly was the
fourth most important issue for consumers when looking for chicken
(after price, preparation and presentation) in a MORI survey done
for the RSPCA in November 2003.
4. Higher welfare food products are often
visually difficult or impossible to distinguish from lower welfare
alternatives, so clear labelling is required as a mechanism to
differentiate the products on the basis of animal welfare criteria.
At present there is no European standard for welfare assessment,
although there have been calls for one. So the legislation stating
what labelling can be used differs. The Regulation on Organics
sets out certain standards that have to be applied if the European
organics label is to be used and some of these refer to animal
welfare. The regulation on beef labelling (Regulation 820/97)
allows countries to put country of origin on the label but does
not designate set levels for animal welfare. At present there
is only one sector where there is a European harmonised labelling
standard that sets standards on welfare that are used on the label.
This is in the eggs sector. The history of this and its relationship
to the WTO's regimes is given below. There have been calls for
a European standard.
5. Because there may sometimes be increased
costs associated with some higher welfare systems it is usually
in the interests of producers of higher welfare products to voluntarily
label their products to indicate the welfare element. Voluntary
schemes though have their limitations. A voluntary labelling scheme
for shell eggs existed for over 10 years in the European Union
but research conducted in 1998, after the scheme had been running
for eight years, found that consumers were still confused about
the provenance of eggs on sale. Polls in France and Germany undertaken
on behalf of the RSPCA found that 77% of French consumers and
63% of German consumers confused intensive battery eggs with alternate
extensive systems (MORI survey undertaken for the RSPCA 1998).
The problem was that there was no incentive for lower welfare
eggs to list their method of production as this would reduce consumer
demand. Use of labels with phrases such as "farm" or
"country fresh" were allowed on the egg boxes and increased
consumer confusion. A mandatory scheme was introduced (Regulation
2001/02) for domestically produced eggs, so that all eggs sold
have to list the production method. This came into effect on 1
January 2004. Although it is a mandatory scheme for imported as
well as domestically produced eggs it does not require imported
eggs to be labelled with the method of production. They could
merely be listed with the country of origin. So a consumer, if
they were buying on animal welfare preferences, would have to
know the animal welfare policy of the country on the label, clearly
an almost impossible task. But one country, Switzerland, has introduced
a clear mandatory labelling system for eggs based on non-product
related PPMs.
6. Switzerland introduced its mandatory
labelling scheme for imported as well as domestically produced
eggs on 1 January 2000. The labelling scheme states on imported
eggs "eggs produced in battery cages, which are not permitted
in Switzerland" and was put in place to keep consumers aware
of the difference between Swiss produced non-caged eggs and eggs
imported from other countries which have been intensively reared.
Since 1992 Swiss eggs have increased their market share of table
eggs from 62% to 74% of the market, in the face of competition
from cheaper imported battery eggs. This market share can be related
to the mandatory labelling scheme. Consumers in Switzerland indicate
a preference for Swiss eggs and many retailers now do not offer
imported caged eggs. However this is not reflected in the processed
food market, where clear labelling is more difficult to achieve;
most of these eggs in this sector are from imported caged hens.
The Swiss scheme has been notified to the WTO and no objections
have been made.
7. The Technical Barriers to Trade Agreement
(TBTA) establishes the framework under which labelling schemes
can operate. These must not create unnecessary obstacles to international
trade or be more trade restrictive than is necessary. Labelling
schemes must also fulfill a legitimate objective, included in
which are measures to protect animal life or health or the environment.
So the TBTA recognises the right of governments to impose voluntary
standards or technical regulations to meet "legitimate objectives".
Although the TBTA does not explicitly mention animal welfare it
could be taken as a legitimate government objective.
8. Voluntary schemes are defined as standards
under the TBTA. Voluntary labelling schemes do not conflict with
existing multilateral rules. As they are not mandatory they do
not conflict with products which are not labelled. No obstacle
to trade is created. This view was confirmed in the unadopted
GATT panel ruling on tuna/dolphin in 1991 (United States—restrictions
on imports of tuna. BISD 39S/155) which looked at the legitimacy
of a voluntary labelling scheme based on a non-product related
PPM measure. The panel found that as there was no legal discrimination
between voluntarily labelled and unlabelled products in the market
(in this case tuna), the labelling scheme did not restrict the
sale of the product and so did not represent an unnecessary obstacle
to trade. It is recognised that, although falling outside the
competence of the Technical Barriers to Trade Agreement (TBTA),
any government funded voluntary schemes should be made as transparent
as possible. Other voluntary schemes should remain outside the
scope of the TBTA.
9. There are divergent views on the applicability
of mandatory animal welfare schemes under the TBTA, as there has
been no agreement on non-product related PPMs. The WTO's Committee
on Trade and Environment has been considering the applicability
of non-product related PPMs under the TBTA but has not progressed
in its discussion since it adopted its report in 1996, which acknowledged
and summarised the major differences between the WTO Members on
non-product related PPMs.
10. As all animal welfare labelling schemes
would involve non-product related PPMs, as final characteristics
of the product are not affected by the production method, there
is uncertainty about the relationship between mandatory labelling
schemes covering animal welfare issues and the WTO's regimes.
11. There is some WTO juris prudence on
the issue. There have been no test cases under the TBTA of animal
welfare mandatory labelling measures to date. Any such case would
define the relationship between non-product PPMs and the WTO regimes
and in particular the role that consumer preference holds. However,
there is some history on the relevance of consumer tastes to non-product
related PPMs. In 2001 the Appellate Body in its report on the
EC—measures affecting asbestos and asbestos-containing products
(WT/DS135/AB/R) did state that consumer tastes and preferences
was a criterion for determining the likeness of a product. It
upheld the right of members, in this case the EU, to prohibit
a substance based on consumer tastes. However, crucially it did
not test this rule under the TBTA.
12. The EC in its position on labelling
to the WTO in 2001 confirmed that it wished to see TBT rules clarified
to include mandatory labelling of animal welfare products. It
sees it as the right of WTO members to chose its level of consumer
information, that mandatory labelling could be the least trade
restrictive of methods used and that schemes, providing they are
transparent and open to all, could improve market access.
13. Although no substantive discussion has
occurred on mandatory labelling under the WTO's agricultural negotiations,
both the Swiss and EU's mandatory egg labelling schemes have been
notified to the TBT and have attracted no challenge from other
WTO members. Article 2.9 of the TBTA refers to international standards.
One of the problems from an animal welfare stance, is that there
are no internationally agreed standards to date, although discussion
has started on this under the International Organisation for Animal
Health (OIE). The Codex Alimentarius standards are accepted as
benchmarks to measure against national regulations, but there
are only principles for organic standards not for animal welfare
ones under Codex. However this does help to an extent as there
are standards for laying hens and labelling of eggs, supporting
the notion that labelling of animal welfare friendly products
is a legitimate objective for governments to pursue.
14. The RSPCA believes that animal welfare
based mandatory labelling schemes do not conflict with the TBTA,
and, providing they are undertaken in a transparent manner, can
be the least trade restrictive route. The history of egg labelling
in the EU shows the limitations of voluntary labelling in achieving
the aim of improving consumer awareness on an issue. It also confirms
that mandatory schemes that have been notified to the WTO have
not attracted challenge. Finally it underlines that until the
situation is clarified, governments may be reticent in introducing
mandatory schemes that cover production methods in third countries.
19 April 2004
| 
