Examination of Witnesses (Questions 240-259)
RT HON
JANE KENNEDY
MP AND MR
DUNCAN PRIOR
27 OCTOBER 2008
Q240 Chairman: Is that why we have
organic eggs at £4.26 a dozen?
Jane Kennedy: Organic eggs are
having a particular difficulty at the moment because consumers
are choosing free range but not necessarily organic.
Q241 Mr Williams: Can I apologise
for arriving late? One of the biggest and strongest consumers
in the country, of course, is the Government itself, and a criticism
from the agricultural industry is that the Government is not active
enough or targeted enough in its procurement procedures to make
a difference, but surely if the Government are expecting pig producers
to have very special welfare conditions for their animals they
ought when they are procuring pig products to be insisting on
those similar welfare conditions. Is the Government doing that,
and, if it is not, when will it?
Jane Kennedy: I absolutely agree
that Government has to lead the way and show by example what can
be done. There is a lot of progress being made in this. I do not
think it is good enough that a significant number of departments
did not respond to BPEX's request for data, so I intend to work
with officials to make sure we get a good response from all departments.
However, there are a lot of very good examples. The Ministry of
Defence is an exemplar and the Ministry of Justice should be given
recognition for their understanding of farm assurance issues.
The Cabinet Office has agreed to review its bacon procurement.
Her Majesty's Revenue and Customs does not get many plaudits but
it should get a plaudit for seeking to improve opportunities for
UK suppliers of pork and bacon, and British pork served in their
restaurants has gone up by 10%. We are getting there. There are
a number of other examples which we can provide to the Committee
but what I am saying is that it is not perfect and we need to
work harder at it but we are making progress.
Q242 Mr Williams: Very often we are
told though that the Government is restricted by European regulations
in the way in which it must go about procurement, but the point
I am making is that if we are insisting on very high welfare standards
for our producers then we should insist on very high welfare standards
for the products we buy. Yes, put it out for competition but limit
it to those producers who are abiding by the requirements that
the British Government has.
Jane Kennedy: I think that would
not necessarily contravene European rules if that was exactly
how it was done. I know Mr Prior has been involved in these discussions.
Would you like to hear directly from him?
Q243 Chairman: We would be delighted
to hear from Mr Prior because I would like to ask him a question
but he is going to give us an answer now, so off you go.
Mr Prior: I have been directly
involved in this particular issue, and I think it is true to say
that although the welfare standards that we are talking about
were introduced in this country some years ago it is relatively
recently that awareness of welfare in procurement has gone up
the agenda, including the public agenda. I think people are becoming
more aware. In terms of government procurement, we are getting
better generally. We cannot, as you must know by the way you pitched
your question, employ a "Buy British" campaign because
that would be illegal under EU single market rules. However, what
we are trying to do is take forward an initiative whereby, for
example, we could have model contract clauses for the public sector
that stipulate not "Buy British" but "Buy to UK
welfare standards", and if those standards could be met by
suppliers outside the UK, so be it. That is where we are trying
to get to, so that is the lie of the agenda at the moment. Meanwhile,
public procurement is increasing its British procurement, as it
happens, significantly, and I think by the end of November the
Government will be publishing a report that spells out the purchasing
profile of pork and bacon procurement for all government departments,
so that will be put in the public domain.
Q244 Chairman: Have you seen any
evidence to show that welfare is a factor which is affecting consumer
demand beneficially as far as retail or food service offers of
pork meat are concerned?
Mr Prior: There is evidence from
consumer surveys, for example, that consumers would be willing
to pay more for products—
Q245 Chairman: That is an anticipatory
exercise. I am asking have you seen, or has Defra commissioned,
any work to establish beyond peradventure that the higher welfare
standards to which the Minister has referred and on which many
others have commented is a plus point in influencing real-world
consumer decisions? As opposed to asking what you might do, as
you have rightly pointed out, these high welfare standards have
been around for a long time; the industry puts great stock by
them as a point of differentiation in the marketing of our product
versus our competitors', but I want to know if it really does
carry weight in terms of what the customer does. Have you seen
any evidence that answers that question definitively?
Mr Prior: There is evidence, not
necessarily brought about by Defra research but certainly government
research, for example, by the Food Standards Agency, that consumers
will act like that. Where they can see a demonstrable welfare
benefit they will act accordingly.
Q246 David Taylor: What do you mean
by "act accordingly"?
Mr Prior: Pay more for the product
if they are reassured and satisfied that these are higher quality
standards, in this case welfare standards. I think one of the
difficulties consumers have is in identifying that quality, as
the Minister says, through perhaps lack of labelling.
Q247 David Taylor: On that very point,
as they say in the chamber across the road, Mr Opie said to us
that he had been in one or two of his members' outlets in the
last few days, and he had seen strong evidence—and I am
paraphrasing now—of heaps of meat with the Union Jack being
emblazoned all over it and little red tractors running hither
and thither, but there is little evidence that the UK buying public
(or the English at least) fully understand what the import of
those labels is. Would you agree on that, that there needs to
be a far greater effort perhaps from Defra, perhaps from the FSA,
I am not sure, to alert consumers to the differences in the different
labelling motifs that there are?
Jane Kennedy: I would tend to
agree with that. Mr Opie is?
Q248 Chairman: He is from the British
Retail Consortium. He is sitting behind you. You may not have
noticed him. Mr Opie, stand up so the Minister can have a look
at you.
Jane Kennedy: I have not seen
detailed evidence yet, partly because I have not had time to assimilate
it, if there is any, but my experience as a consumer would be
that there is not sufficient information on the labelling of food
products, for example, to be able to judge from what you are reading
what the welfare standards have been in the way that meat has
been produced.
Q249 David Taylor: You are in an
ideal position in your new role to influence that over the next
18 months or so. How do you plan to improve that information available
for consumers to be able to differentiate?
Jane Kennedy: I would want any
changes we made to be based on good evidence, so I would want
to understand and gather that evidence so that we were not just
basing it on anecdotal evidence of somebody who is a regular shopper
like me. I would want to gather together what evidence there is
available so that we can make a judgement about what labelling
should be made available. I think this argument is being won.
I think the European Commission is considering labelling and how
detailed it should be. There are three changes they are considering
making to labelling, including where the animal was bred and where
it was raised, and there is a debate about where it was slaughtered
being displayed on the product. We are not necessarily persuaded
of the need to have the third, but certainly we think having the
first two, the country of breeding and the country of raising,
displayed on the product would be of benefit in terms of information
for the consumer. At the moment it is not available.
Q250 Chairman: What is the likely
timetable for that series of changes?
Mr Prior: It is not imminent in
that it is co-decision procedures so it has to go through the
whole shebang, including the European Parliament, but it is clearly
on the agenda, and even with the shift of presidencies successive
future presidents have said that this is a priority.
Q251 Chairman: Mr Prior, that is
a wonderful piece of painting over the cracks, "It is clearly
on the agenda", and yes, I understand that timetables can
be a long time. Has it been discussed by the Council of Ministers?
Mr Prior: It has been before the
Council of Ministers at the level of broad principles. It is now
being considered at working group level in the Commission. It
is going to take time. I cannot predict what that time will be
exactly. It is a Commission competence area to take this forward.
Q252 Chairman: When is the working
group supposed to be reporting back on its initial findings to
the Commission then?
Mr Prior: I do not know what the
timetable of the working group is.
Chairman: Would you like to look at that
and perhaps provide us with a note giving us your best guess?
I appreciate sometimes these things have to be a bit broad-brush
in European timing, but can you give us a feel, because it sounds
like it is travelling in the right direction but it is on a bit
of a long track. Mr Taylor, I interrupted you.
David Taylor: If you feel I am wandering
back to a topic that has already been covered I am sure you will
stop me.
Chairman: Feel free to wander.
Q253 David Taylor: Mr Williams raised
the point about public sector contracts and Mr Prior underlined
the clear fact that anything that resembled "Buy British"
would be illegal, but is it not possible to frame the standards
for the product within a public sector contract in a way which
would favour those producers, perhaps in the UK, perhaps elsewhere,
who had significantly higher standards? There is not a great deal
of evidence that that is being done, is there?
Jane Kennedy: The NHS supply chain
has provided one of the most positive responses to this initiative.
They have placed animal welfare and ethical trading as part of
the consideration they give to a product before they buy it. That,
I think, is the way forward, but partly it is ensuring that public
sector purchasing is properly informed and well informed of what
it is we are expecting them to do. Mr Jack, just on your last
point, paragraph 12 of our response to the Committee's inquiry
does indicate that the Commission envisages the introduction by
2009-10 of standardised welfare indicators, and it is in that
context that the Commission are being charged by the Council of
Ministers to assess further the issue of animal welfare labelling
and to submit a report. 2009-10 is next year, so we can certainly
get you the detail on what progress we are making.
Chairman: That is why I have written
"timing" down in my notes at the end of that, so you
are right to draw my attention to it. Anyway, Mr Prior is going
to busy himself and help us on that.
Q254 Mr Drew: What we found, certainly
from the first group of evidence, was that next to the milk industry
relationships in the pig industry are not good; in fact, I would
describe them as poisonous and getting worse because there is
this antipathy between the different segments and there is this
downward pressure all the time. In a sense that is competition
and the different market segments have to sort themselves out,
but from the evidence that we have seen when we have gone on our
travels to New Zealand, to Denmark, relationships across the industry
always seem to be better and that seems to give them a competitive
advantage because at least they can keep their own house in order.
Does it matter to you, Minister, that these relationships are
at least poor, if not worse than poor, because of the way in which
that seems to take up a lot of the time, and is the reason for
this investigation? People are clearly lobbying us, saying, "Have
a look at this industry. Things are not right".
Jane Kennedy: Yes, it does concern
me. When you meet pig farmers who are clearly frustrated and disappointed,
to put it mildly, that their efforts, for example, in the area
of animal welfare, are applauded by the big retailers but not
really much more than that, then you can imagine that they would
easily become discouraged. Some of them have made very significant
capital investments in improving animal welfare, but it appeared
to me, and this is just from one visit so I should be cautious
in drawing the conclusion, based on what other farmers that I
met on that day also told me, that there is a disconnect between
the policy statements that some of the big retailers make as a
big corporation and what actually happens when their buyers are
negotiating with producers. There are other issues involved as
well, are there not? There are issues around the food packers,
and the people who will come between the two, the producers and
the retailers.
Mr Drew: Is this "not interested"
inasmuch as this is quite a small industry in terms of the numbers
of producers, the numbers of processors? We know about the retailer
bind. It is not beyond the wisdom of anybody to call them in and
say, "Look, I know a lot of the information that you trade
between each other is commercially confidential, but the British
pig industry does actually matter to me as a minister and if I
see it as apocalyptic", in James's view—
Q255 Mr Gray: I was not that apocalyptic.
Jane Kennedy: Yes, you were.
Q256 Mr Drew: —"it would
seem to be at least half true that there is a problem with this
industry that eventually will cost the consumer, because the consumer
will lose the opportunity to buy British". Is that something
you could see yourself doing, calling in the various sectors,
which did in fact happen with the milk industry, that eventually
ministers had to get their sleeves rolled up and call different
parts of it together because the relationships were so poor?
Jane Kennedy: If it became necessary
I would be willing to do that, but I think there is scope for
a lot more work to be done first. I would want to see all of the
evidence that you have heard as the Committee and to read your
report with a lot of interest before I committed to doing that.
The industry has not asked me to do that, the British pig industry.
I know that there are many different factors impacting upon the
large retailers' behaviour, and I also am very conscious of the
fact that it is not just the large grocers that have an impact
on prices; there is the whole food service industry that also
has responsibilities here. I am a bit too soon into my brief to
be able to say that I know absolutely clearly what needs to be
done, but I am beginning to understand some of the pressures.
Q257 Chairman: Let me ask you something
specific. BPEX, in their evidence to us, estimated that 70% of
imported pig meat had not been reared, in their judgement, to
UK welfare standards, and it would have been illegal if it had
been produced in this country. Does not the fact that so much
of retail purchase is of that particular kind suggest that there
has been a negation of the UK's higher welfare standards, because
we did that thinking that there would be an advantage, but BPEX
tell us that 70% of what is sold does not adhere to those high
welfare standards?
Jane Kennedy: I tend to agree
with that. Also, the farmers' representatives accept that our
society demands high and good quality welfare arrangements for
British pigs, British cattle, British hens.
Q258 David Taylor: On the mandate
that they have they have said loudly and effectively that 70%
is at a lower standard than we would expect.
Jane Kennedy: Exactly.
Q259 David Taylor: So what do you
plan to do in the next 18 months?
Jane Kennedy: What I want to do
is learn what the issues are that are preventing consumers in
the UK from exercising their power more effectively; that is the
first step. If it is necessary to organise the kind of summit
that you were suggesting, Mr Taylor, then I am not averse to doing
that, but I want to understand exactly what the factors are that
are causing that disparity because there is a clear disparity
there between what we as Parliament have enacted, based upon what
our constituents have made it clear to us they expect, and what
those same constituents do when they exercise their power as consumers.
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