Memorandum submitted by Nicholas Saphir
(SFS 19)
BACKGROUND
Currently:
Executive chairman OMSCo (the UK Organic Milk
Suppliers Co-operative) 2003; Chairman Coressence Ltd[64]
2006; director Bodin & Nielsen Ltd 1975; Chairman and Trustee
of several trusts and foundations. Director City Food Centres
Limited, 2005.
Previously:
Farmed 1,000 acres of fruit and arable
in Kent; responsible for corporate fruit and vegetable farming
activities and investments in South Africa, Zimbabwe, Argentina,
Uruguay, Holland.
Chairman and chief executive of Hunter Saphir
plc, a fresh produce and food manufacturing group which was sold
to Albert Fisher plc in 1992; remained on Board until 1997; non
executive director San Miguel SA (Argentina)[65]
1993-1998 and 2001-2007; non-executive director of Dairy
Crest plc 1987-1993.
Chairman Rural Reviva[66]
2002-2007; chairman of the Agricultural Forum[67]
2001-2004; president of the Fresh Produce Consortium[68]
1997-2000.
Founder chairman of Food from Britain[69]
1983-1987; chairman of the Central Council for Agricultural and
Horticultural Co-operation[70]
1980-1983; a member of the Ministry of Agriculture Fisheries and
Food's Inputs Task Force; member of the Food and Drink Economic
Development Council 1984-1987.
Author of the London Wholesale Markets Review
(2002) commissioned by Defra and the Corporation of the City of
London on the future of London's wholesale-markets and several
papers on the future of the countryside.
1. INTRODUCTION
This submission addresses the issue of food
distribution outwith the supermarket supply chains and with particular
reference to the third of all food and drink consumed in the South
East of the UK. It is based on work undertaken for the Review
of London Wholesale Markets[71]
subsequently updated in presentations including to the Covent
Garden Market Authority (CGMA) in April 2006 and the National
Association of Wholesale Market Authorities. It considers the
needs of consumers and the ongoing development of Britain's food
and farming industries particularly in the context of Food
Matters, Farming and Food, a sustainable future, Healthy and Sustainable
Food for London and The Review of London Wholesale Markets.[72]
It argues for an understanding of the opportunity
to build on the UK wholesale food markets as centres of improved
food distribution, food education, food centres for SMEs and start
ups and for providing answers to the issue of environmentally
sustainable logistics through consolidated distribution and waste
management.
1. The Issue
Since the Review of 2002 was published
several of the main wholesale markets throughout the UK have started
to develop projects based on ideas included in the Review in terms
of composite distribution and an emphasis on added value preparation.
London, however, has not benefitted from the Review.
Ongoing environmental and commercial damage
is being done to London by the continuing Charter based monopoly
rights of wholesale food markets. These ancient rights prevent
competition and have resulted in the third of all food and drink
distribution that goes through non supermarket outlets, particularly
to catering establishments, having to be delivered to, purchased
and distributed from different markets on different delivery vehicles
mostly to the same customers, thereby causing unnecessary commercial
costs, pollution and congestion with no compensating benefits
except for a damaging continuity of archaic traditions. It also
means that no markets in London are large enough to deliver the
benefits, commercial and public, available from the implementation
of the original Review and subsequently developed Food Centre
ideas. Fragmentation means that there has been an over-allocation
of land, capital and resources to the duplication of supply chains
that are no longer viable in isolation. This also means that there
is a shortage of capital available when required to maintain the
essential competitive position of the wholesale markets and to
keep them abreast of modern trading requirements, including environmental
engagement and health and safety.
Increased efficiency in food distribution (encompassing
primary distribution, food preparation and catering) can significantly
reduce food waste, energy waste and the need for road transport
when handled within a dedicated food centre on the lines proposed—alternative
fragmented approaches become constrained by small scale complexity
and do not have the mass to address most of the issues of the
Public Good.
2. The Opportunity
Composite Markets, as envisaged in The Review
of London Wholesale Markets, included a vision for the future
of the wholesale markets. In specifically addressing London's
issues, the Review suggested that London's wholesale markets should
be consolidated in to three Composite Markets. It proposed the
establishment of specialist food parks incorporated in to the
existing wholesale markets. It suggested that the wholesale markets
could be developed to attract primary suppliers, specialist manufacturers
and distributors focused especially on supplying London's catering
and specialist food retailers. It suggested that such a concentration
of activity might attract large food companies to mentor and possibly
finance SMEs, through an "incubator", ideal for second
stage development. In addition the report suggested that it might
be possible to set up facilities for catering education, preferably
in conjunction with existing catering colleges, and other facilities
to enhance and develop the commercial opportunities and public
good available through wholesale markets.[73]
Ironically a reduction in the number of markets enhances their
competitive position by making each market strong enough to withstand
external forces of consolidation in food distribution and retailing.
Smaller markets, as at present, lack the critical mass to withstand
the competitive onslaught of the significantly larger groups in
both sectors. The survival of the markets after the rapid rise
of the super-markets has been more appropriately attributed to
luck in the changes of catering behaviour rather than a result
of planning, strategy or foresight.
City Food Centre's concepts are relatively simple—importantly
they enhance the relationship between the market, the sources
of produce and the procurement agencies, thereby recreating a
forum for open and transparent trading and direct and easier access
between the parties—this is a major advantage of consolidation
and of having food-centric and procurement offices on site.
Subsequent work has developed the potential
for the development of integrated food hubs that would provide
opportunities for young entrepreneurs to enter the industry, for
the effective distribution and consolidated management of local
and regional foods, as well as facilities for established players
to profitably develop their businesses in providing the opportunity
for sourcing consolidated food supplies and food requisites from
composite markets. City Food Centres would also provide facilities
for the specialist needs of the catering industry, serviced offices
for public procurement and general food education. In addition
they would provide the environment for the establishment of innovation
centres for better understanding and enjoyment of food as well
as the development of more focused opportunities for local and
regional foods.
3. Recommendation
The main recommendations included in the 2002 Review
remain the foundation on which this summary submission is based.
It must be a policy objective of government to support the development
of a more effective and environmentally sustainable non supermarket
distribution for the South East of England. This is particularly
of importance to encourage SMEs and the production and distribution
of local and regional foods. It is pleasing to see that some of
the ideas included in the Review being taken up outside of the
South East. It is also gratifying that, after several in-depth
discussions over the past four years between CFC and the Covent
Garden Market Authority, a number of the core ideas promoted by
CFC have been adopted or are informing the tender process of the
CGMA with regard to the redevelopment of NCG. However, it is recommended
that if an effective alternative to fragmented distribution to
specialist shops and catering establishments, which represents
significantly over 30 % of the food and drink consumed in
the South East, is to be conjoined with the possibilities of benefitting
from centralised catering and food education and innovation, improved
distribution of local and regional foods and provide incubator
opportunities for new young start ups in the food industry, government
should review and implement the key findings of the 2002 Review.
These recommendations and subsequent submissions include the removal
of monopoly rights that prevent the development of Composite Markets.
Such enlarged and one stop markets would allow for both commercial
and social enterprise development of conjoined City Food Centres
as presented in detail to the Covent Garden Market Authority in
April 2006.
In the context of securing food supplies for
2050, in addition to the increased output of agriculture, it is
suggested that more effective distribution would be of significant
benefit in terms of efficiency, sustainability, innovation and
the encouragement of more SMEs in production and distribution
of British food.
January 2009
64 A company developing functional food extracts from
apples. Back
65
An Argentine public company farming 15,000 hectares and processing
350,000 tonnes of fruit. Back
66
A Social Enterprise Foundation, part of the Plunkett Foundation. Back
67
The Agricultural Forum was formed in the 1970s to promote understanding
and development within the various parts of the UK agriculture
and food industry. Back
68
The Fresh Produce Consortium is the trade association that represents
the interests of the UK trade and retailers of fresh fruit and
vegetables. Back
69
Food from Britain was set up by the UK Government in 1983 to
improve and promote the marketing of British food and drink in
the UK and world export markets. Back
70
The Central Council for Agricultural and Horticultural Co-operation
was the Government agency responsible for the development of agricultural
co-operatives and the distribution and monitoring of grants. Back
71
Review of London Wholesale Markets, Saphir, commissioned
in 2002 by Department for Environment, Food and Rural Affairs
(Defra) in conjunction with the Corporation of London 2002. Back
72
Food Matters, the Cabinet Office Strategy Unit report July
2008, Farming and Food, a sustainable future, The
Policy Commission on the Future of Farming and Food report to
Government, January 2002. Healthy and Sustainable Food for
London, The Mayor's Food Strategy, 2006. Back
73
Key findings Appendix 1. Not printed. Back
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