Supplementary memorandum submitted by
the Food and Drink Federation (SFS 29a)
INTRODUCTION
This supplementary note is provided by the Food
and Drink Federation in response to issues raised at its oral
evidence to the Committee on 25 February 2009. It covers three
areas:
1. regulatory burdens and the quality of and
basis for policy-making;2. the importance of science and research
and development; and
3. consumer information.
REGULATORY BURDENS
AND GOVERNMENT
POLICY-MAKING
Food and drink is the largest manufacturing
sector in the UK—with around 7,000 enterprises generating
total turnover of £72.6 billion and employing around 440,000
people. FDF members feel strongly that the Government should do
more to recognise the importance of a thriving food and drink
manufacturing sector to the success of the UK economy.
This was a key theme to emerge from a survey of senior
representatives of FDF members carried out by Professor Bruce
Traill of the University of Reading in 2007. The survey found
that industry leaders felt they receive limited support from Government.
Worse, they fear that our sector is all too often made a scapegoat
by policy makers who fail to appreciate the positive role it plays
in the overall economy. This tendency is felt to be much more
pronounced than in other countries, notably the US, where our
members believe industry and Government work more closely as a
partnership.
A Strengths, Weaknesses, Opportunities and Threats
(SWOT) analysis of the industry based on Professor Traill's survey
of FDF members identifies regulatory issues as the biggest perceived
threat to the future competitiveness of the sector. Companies
cite key areas of concern as being: over-regulation and inconsistency
across government; premature legislation; legislation that is
not science-based and a perception (rightly or wrongly) that EU
legislation is over-enforced in the UK compared with other Member
States.
The regulatory climate is of particular concern
to smaller and medium sized food and drink producers, which make
up the bulk of manufacturers in the UK by number. A separate survey
carried out on our behalf by ADAS confirmed how worried SMEs were
about both the cost of staying on top of ever-changing legislation
and ensuring they remained fully compliant with the myriad of
rules and regulations affecting our sector.
In particular, the smaller companies in our
membership feel strongly that the plethora of UK-specific employment
and social policies introduced in recent years have impacted on
our competitive position. In a food market that is increasingly
operating on an EU basis, this puts UK producers at a competitive
disadvantage to their European counterparts.
Legislative burdens, non-evidence-based interventions
and regulatory creep impact every aspect of our members' businesses,
and ultimately can undermine the UK's attractiveness as a place
in which to invest in manufacturing capacity.
The following examples highlight some of our
concerns:
— Food and drink colourings: Late
last year, the UK Government and the Food Standards Agency ordered
a "voluntary" ban on the use of certain artificial food
and drink colourings. Their decision was based on the findings
of a single UK study that has been widely criticised and, indeed,
the findings of which have been rejected by the European competent
authorities. UK producers must now comply with this "voluntary"
ban—which is at odds with the prevailing EU regulations
and which does not apply to food, drink or alcoholic beverages
imported from Europe (where these colours continue to be legally
approved). On a related point, there is genuine disquiet among
food and drink producers that no Government Department or agency
has been prepared to defend the positive role that food additives
and ingredients play in the development of products that respond
to consumer and/or societal concerns. For example, sweeteners
provide one solution to a key public health concern (obesity).
These ingredients undergo stringent testing to ensure their safety
and, yet, are routinely attacked—without negative statements
ever being countered by clear advice for consumers from "official"
UK bodies.
— Nutrient profiling: The UK's current
restrictions on TV advertising are underpinned by the use of a
nutrient profiling model developed by the FSA that has now been
widely criticised for being based on bad science. The model was
even described by the then Public Health Minister Caroline Flint
as being the "best we could get". We don't think that
is a good enough basis for restricting companies' legitimate freedom
to operate. In addition, despite assurances to the contrary, we
have always feared the model would be extended to areas outside
broadcasting as a simplistic way of identifying "good"
and "bad" foods. These fears proved well-founded last
year when the Welsh Assembly Government—against the advice
of the FSA—announced new guidelines for healthy vending
in Welsh hospitals—based, in part, on the nutrient profiling
model. Thanks to these guidelines, a wide range of products including
sugar-free drinks, cereal bars and even cheese and tomato sandwiches
are all deemed "unhealthy" and banned from vending machines.
— Trans-fats: In October 2007 the
Health Secretary called for a ban on trans-fats and asked the
FSA to undertake a review in light of action in Denmark and New
York City to impose mandatory restrictions on these types of fats.
The clear implication was that he felt similar action was necessary
in the UK causing immediate reputational damage to the industry.
In the event following its review of the evidence, the FSA's Board
recommended to UK health ministers in December 2007 that mandatory
restrictions were not necessary since voluntary measures by the
industry had "reduced artificial trans fat levels in food
and UK average dietary intakes dramatically" which is "lower
than the most restrictive controls introduced by Denmark".
— "Voluntary" Agreements:
our sector is subject to a myriad of `voluntary' agreements, targets
and best practice guidance. For instance: we understand that the
Food Standards Agency is planning shortly to introduce sector-specific
"voluntary" targets for saturated fat and sugar reductions
in food and drinks—that will set unrealistic deadlines (in
some cases as early as 2010), appear to be based on limited or
no evidence, or scientific rationale, and take no account of the
commercial pressures facing producers in the current economic
downturn.
The EU regulatory process
The Food Matters report identified the
growing influence of the EU on the regulatory landscape. In our
experience, the EU regulatory process is subject to lengthy political
negotiation that does not always result in legislation that is
easy to use. This means it is vital that the UK Government engages
in Europe in a way that helps shape sensible policies and that
it works with industry from the earliest possible stage of the
process to agree priorities and identify potential risks to UK
industry's competitiveness. The recent example of legislation
banning a wide range of crop protection products and pesticides
is a timely reminder of what can happen if effective engagement
does not happen early enough.
2. INNOVATION,
RESEARCH AND
DEVELOPMENT
Adding value through R&D, technology and
sophisticated marketing are current strengths of our sector:
— food and drink manufacturers invest around
£300 million a year on R&D;
— in a typical year, 8,000 new products will
be launched in the UK—making us one of the most innovative
markets in the world; and
— top-performing food companies can expect
around 15% of growth to come from innovation.
Maintaining our competitive position relies
on ensuring that global companies continue to invest in the UK—given
that the top 5% of companies account for 75% of our sector's GVA.
Just as important is their ability to offer the best people a
challenging and rewarding career path. However, in recent years,
student interest in food-related science based subjects has dropped
significantly (illustrated by a marked drop in applications to
relevant courses). The provision of relevant courses in the right
location is vital, but we see both the supply of relevant courses
and marketing of these courses in decline.
There is a significant risk that there will
be insufficient food scientists and food technologists to promote
the future growth of the food and drink manufacturing sector.
Research carried out last year by Improve, our sector skills council,
suggests that up to 25% of food science/food technology posts
were vacant; this equates to 2,360 positions being unfilled at
any time. So DBERR initiatives such as Manufacturing Insight and
Manufacturing Futures are critical to the future health of the
food chain and ultimately to our food security.
We are working in partnership with Improve to
follow through on a number of solutions identified to address
the issues faced in the sector for food science and technology.
Workshops to facilitate action, including identification in provision
gaps, careers advice enhancement and marketing of the sector are
being developed.
Our industry has a good track record of investing
in its people—recognising the importance of investing in
this valuable resource to remain competitive and effective. We
estimate that our 20 biggest members are now providing around
three million training hours each year at a cost of around £8
million, for instance.
3. CONSUMER INFORMATION
There is understandable interest in discussing
how companies should present information that highlights the "sustainable
performance" of their products.
Our members have a good track record of providing
relevant information for consumers in an easy-to-digest format,
usually in the form of an accreditation mark on packs. The increasing
popularity of products carrying the Fairtrade or Rainforest Alliance
brands are good examples of how our industry has embraced important
aspects of the sustainable sourcing debate and taken them into
the mainstream. Similarly the success of the LEAF Marque, Red
Tractor logo and the Freedom Foods scheme are further signs of
how consumers are able to identify products that address specific
concerns about particular aspects of the food production system.
The growth in the organic food market is, of
course, addressing another important consumer need—although,
in this case, the simple use of organic branding on packs (backed
up by an appropriate accreditation mark) is conveying some complex
lifestyle choices.
More recently, the spotlight has turned onto
carbon measurement and labelling. FDF has been at the heart of
work led by the British Standards Institute, Defra and Carbon
Trust to develop a single UK methodology for measuring carbon
footprints across whole supply chains. The BSI's Publicly Available
Standard (PAS 2050) was published in October 2008 and we support
its development as an important tool for driving CO2 hotspots
out of the food chain.
PAS 2050 may also provide the sort of standardised
data that will be necessary if we are to communicate effectively
with consumers on the issue of carbon reduction. Work is now underway
to evaluate how best to provide such complex information (particularly
to help people make comparisons between different products)—and
whether that should be done online, at the point of purchase or
on pack.
As other sustainability issues come to the fore—such
as the provenance of ingredients or the use of air transportation—there
is always a danger that packs will become overloaded with information
and cluttered with logos. Given the complexities of all the economic,
environmental and social issues that underpin our current understanding
of sustainability, it is debatable whether it will be possible
to develop a single labelling system that is able to capture the
nuances of all these issues simultaneously and present that in
a meaningful way (and it is worth remembering that there are other
pressures on food businesses to provide information on-pack e.g.
related to health issues).
The types of schemes outlined above are all
currently provided on a voluntary basis. Producers listen to their
consumers in deciding what is required and how that information
should be presented. Today, we tend to see logos on packs; in
future, we are likely to see more in-depth information appearing
online as the debates and the issues that interest consumers become
equally more detailed and complex.
We also suspect that efforts to create regulatory
responses to this debate are fraught with danger—not least
because such solutions would need to be negotiated at an EU level,
which does not always result in the best regulation. For instance,
we remain concerned at efforts to extend the EU Eco-label scheme
to cover food and drink products, which would introduce the concept
of a simplistic pass/fail approach that is not suited to our sector.
March 2009
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