Environmental Audit Committee - Minutes of EvidenceHC 879

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Oral Evidence

Taken before the Environmental Audit Committee

on Wednesday 26 October 2011

Members present:

Joan Walley (Chair)

Peter Aldous

Martin Caton

Katy Clark

Zac Goldsmith

Simon Kirby

Sheryll Murray


Examination of Witnesses

Witnesses: Jane Bevis, Director of Public Affairs, British Retail Consortium, and Bob Gordon, Environment Policy Advisor, British Retail Consortium, gave evidence.

Q218 Chair: I welcome each of you to our Select Committee this afternoon. As you are aware, we are doing this inquiry into all aspects of food, and we are really interested to get your perspective. We do anticipate votes coming just before 4.00pm, so we are slightly time-limited, so perhaps we could bear that in mind for the questions.

If I could just start by asking you where you feel the biggest impacts of an unsustainable food system occurring are. We are interested to perhaps find out from you where your members feel that the biggest difference could be made, looking at the whole supply chain, looking at the whole food agenda.

Jane Bevis: Thank you very much for inviting us in. We thought it would be useful to open the discussion with five big ideas, which I think really answer the point that you have just raised. We think it is very important to focus and sustain the focus on the areas where there is genuine potential to develop a sustainable food supply chain through transformational change, rather than being distracted by some of the smaller, perhaps more popular, eye-catching measures. Underpinning these, we need cross-departmental co-ordination and policy alignment with the devolved administrations. So it is not an English issue; it is a UK-wide issue.

The five factors that we think could have the biggest impact are around a solid understanding of resource efficiency, environmental, economic, health and social factors and their trade-offs, leading to consistent and sustained Government intervention based on sound evidence that outlives the lifetime of a parliament or a government and focuses on product life-cycle hotspots.

Secondly, action at the appropriate policy level through the development of an EU sustainable food strategy, distinct from but engaging with the Common Agricultural Policy and the Common Fisheries Policy. The UK is among the leaders in Europe on this issue, and we think the UK Government should raise it at Council and push this agenda forward.

Thirdly, we need to achieve action at scale, embedding sustainability into mainstream products sold by mainstream retailers and caterers to the whole population, regardless of their household budget.

Fourthly, we think that radically reducing food waste in the supply chain, distribution processes and, most importantly, the home is crucial. Around a quarter of our current footprint could be eradicated simply by cutting out waste.

Finally, by investment by both the public and private sectors in sustainability infrastructure, encouraged by consistent policies, supportive planning processes and incentives for communities to accept and adopt change. That is the way that we will make major shifts, rather than fiddling around the edges, and I think that is very important.

Bob Gordon: If I can add something to that to maybe more directly answer the question, I think there are a number of things going on. John Beddington referred to it as the "perfect storm", with rising global populations, increased demand for higher-quality food that will place greater demands on land, water, energy, and on top of that, climate change. The agriculture sector contributes 30% of global greenhouse gas emissions, so the sector will have to radically reduce its emissions as well as adapting to more unpredictable weather patterns and more extreme weather patterns. There are lots of things on the table there driving the sector to require very significant change.

Where do we think we can see biggest wins there? I would refer to a number of collaborative pieces of work that are being done at a global, European and national level: for example, the Sustainability Consortium, the EU roundtable on sustainable consumption and production of food, the Global Consumer Goods Forum, and in the UK, the Product Research Forum, which follows on from a previous responsibility to deal with the Courtauld Commitment with WRAP, which is looking at hotspots across five environmental impacts, and they are water, energy use, greenhouse gas emissions, waste and resource use, and looking at products rather than just looking at packaging. What that piece of work is doing is trying to identify which products are highest impact, based on volumes as well, what those impacts are and where we can reduce those, so it is taking a life-cycle thinking approach, looking at hotspots, and we increasingly refer to warm spots, so we are going to intervene in places where we can see the greatest change.

Q219 Chair: I think that is really interesting, and you mentioned collaboration. How much are your members involved in collaboration at either local, regional or European level? Is that something that you-

Bob Gordon: It is huge, yes, really, really big. The Courtauld Commitment is a very, very good example, and the Product Research Forum now, which follows on. This is something where, with some responsibility deals and certain discourses, it is led maybe by the Government thinking or by the delivery body. Certainly in the case of the Product Research Forum, it feels like it is being led by the brands and the retailers who sit on the steering group and the working groups. There is a genuine desire to move forward collectively. Where collaboration is powerful is that you can talk the same language. If all of the big retailers are asking for a similar thing from suppliers, there is a reason for them to do something about it, but if they are all asking slightly different questions at different times in different ways, it is much more fragmented and far harder to get that momentum.

Q220 Chair: Where do you see the leadership that will be needed for that kind of collaboration to be coming from?

Bob Gordon: Again, to my mind it is joint, and we are getting some leadership from Government and from delivery bodies. We are also getting leadership from the companies, so in the case of the Sustainability Consortium, that was seed funded by Walmart and there is now a contribution from over 30 global corporations. So there is leadership in that sense, but then it is a shared responsibility to meet collective targets.

Q221 Chair: Can I just move on? Many of our Members of the Committee represent perhaps more deprived areas, and what about the smaller retailers in deprived areas? How much are they engaged with this whole agenda? Is it not the case that there are kind of different agendas here? I am just interested to know how much your members are involved with those sorts of deprived neighbourhood agendas.

Jane Bevis: It is certainly true that most or many deprived neighbourhoods don’t have direct access to the major supermarket fascia in the same way, and that the small independent retailers don’t have the same ability to influence their supply chain in terms of things readily available on the shelves. It partly depends on what aspect of sustainability you look at, so if it is something like healthy eating, quite a lot of small, independent retailers can do quite a lot to make fruit and vegetables available at reasonable prices. If it is making sure that the sausages that you stock have come from an environmentally low-impact system, that is not something that that sort of retailer could influence in the same way.

Q222 Chair: Looking at it from the other perspective, how much do you think there should be a requirement for the bigger retailers to perhaps look in a different light at the more deprived areas, where perhaps they might not be interested in investing at the moment?

Jane Bevis: We are seeing a slowdown in investment by retail because of the current economic circumstances. They have been responsible for helping deliver retail-led regeneration programmes in a number of more deprived communities, so they can help to a degree with that, but it is certainly much more of a challenge. One of the things that they can help do is by influencing and normalising thinking within supply chains. That then sort of leaks out into other people’s supply chains as well.

Q223 Sheryll Murray: I want to go on to changing people’s behaviour. How can we influence behaviour of people so that they do buy more sustainable food?

Bob Gordon: I would phrase the question a different way. I would say, "How can we make sure that more sustainable food is consumed?" I think you can do that in one of two ways. One is to rely on the consumer to buy more of it; the other is to revolutionise the way that you produce it and put it on the shelves so that they are forced to buy more sustainable food because it is the only thing on offer. The business drivers are much stronger on the second option there. Consumers very often make choices based on price, quality and brand. Sustainability is quite often lower down the list in terms of their priorities, and where they do make decisions that they think are sustainable, they are quite often not very well-informed. You hear things like the carbon footprint of a free-range chicken is higher that an intensively-reared chicken; if you buy a free-range chicken, are you making a more sustainable choice? You might believe that you are, whereas if you look at the hotspots of chicken production and reduce the carbon footprint of all chickens, then you will produce a more sustainable food supply chain.

Q224 Sheryll Murray: Do you think we could look at things like restricting choice?

Bob Gordon: That is happening already, and I think it is an interesting question, but what do we mean by that? That might be perceived in public discourse as, say, not selling strawberries in January-that might be the restricted choice-whereas where I believe we will see much more fundamental change and transformative change is if you look at the kind of things that retailers are doing already. For example, one of them says it has reduced the carbon footprint of its beef by 30%. It hasn’t told its consumers about that, it has just worked in the supply chain to lower the footprint of that product. The only product it now offers is beef that has a 30% lower carbon footprint than it did. So they have edited the choice, they just haven’t engaged with the consumer on it in that very proactive, "make sustainable choices" way.

Q225 Sheryll Murray: Should we be thinking about financial incentives and how might that work?

Bob Gordon: The first thing to think about there is, financial incentives for what? So what are the sustainable criteria that we want to incentivise? Why is that the right thing to incentivise? Again, the chicken offers a very good example of exactly what it is that we want to achieve. The second thing I would say is that the incentives need to be incentives, so I would not propose any kind of intervention that raises the price of food. It must be something that makes more sustainable food less expensive, if it is currently more expensive.

Q226 Sheryll Murray: Just moving back to the example that you gave me about beef, what sort of role do you think retailers could play in educating people to make better choices and provide them with the skills to eat more healthily, and can you give me any examples?

Bob Gordon: If I can just start on the environmental sustainability issue-and I’ll ask Jane to comment on the health side of it-labelling is part of the mix, but it is not the solution. There are lots of products on supermarket shelves that carry a label, but very often it is a single-issue label, so you would have MSC or FSC, Fair Trade, the carbon label, but there’s a question of whether that is the right thing, whether that is the sustainable option, and there is also a question of whether or not the consumer understands that. There is a label in Europe, the EU Eco Flower, which covers a whole range of things, but there is no real understanding from the consumer of what that means. I think labelling will play its part, and it will play it much more effectively once we know exactly what it is that we want to label and how we can communicate that with the customer most effectively so that it does come on to the criteria when they are making their choices.

Q227 Sheryll Murray: Do you think that it is a good idea perhaps for retailers to advertise that they have reduced the carbon footprint of their products or they are sourcing locally? From my own personal area, fisheries, for example, I know that a lot of my local supermarkets buy their fresh fish at the local fish market, but you don’t see a huge sign. Do you think that could help people?

Bob Gordon: The answer is different, firstly for different retailers, who will have a different market, different customer base and a different way of building the relationship with that customer base. The other thing is to say that retailers very often perceive that customers will make their choices based on whether or not they think they are going to a sustainable retailer, rather than making choices on individual products, so the dialogue with the customer is very much, "We have taken care of a lot of this. We are working on a lot of things." It is not necessarily a communication about a particular product. That said, there is lots of stuff on local and seasonal. They will make communications. Sustainable fish is one that they are obviously doing a lot on at the moment, so where it is right, they will make direct communications, but generally they are trying to communicate with the customer that they are working on all the issues.

Jane Bevis: Some of the most effective areas have been where there has been a joint Government and retail approach on things like Change for Life or 5 a day, where there is an established campaign that the retailers can make contributions to as well.

Q228 Zac Goldsmith: Do you think that the size of the big supermarkets means that they are structurally unable to properly support the local food economy?

Jane Bevis: What I think they are doing is adapting to develop local networks in order to source those local products. To be a successful retailer, you have to be incredibly responsive to what your customers tell you that they want, and there is a very definite demand for local products and therefore supermarkets are responding and finding ways to do that.

Bob Gordon: Many of them have specific ways of doing that. They have different contract terms with local suppliers, they have developed mechanisms for those local suppliers to deliver direct to stores in the local area, and they have shorter payment terms. Many of them even have targets to increase the proportion of local food they are selling, so they are taking this issue very seriously because, as Jane says, there is customer demand for it.

Q229 Zac Goldsmith: Yes, I have no doubt that that is the case, but can you identify which of the big supermarkets is engaging most positively in the manner you just suggested, and can you also tell us which supermarket is failing to adapt to the demand for local food?

Jane Bevis: We represent the whole sector, so it is not for us to make choices in that way, but I am sure if you ask the supermarkets individually, they would be delighted to tell you of the efforts that they are putting in place.

Bob Gordon: The other answer to that is they will all be approaching it differently, so it would be very hard for us to make a judgment decision of the value of the interventions they are making.

Q230 Zac Goldsmith: Yes, okay. We will move on. We have had a lot of pretty compelling evidence that the supermarkets, as they continue to expand and take more and more market share, are crowding out diversity on the high street. Do you think that is a concern?

Jane Bevis: First of all, 99.6% of retailers, retail businesses, are still small and medium-sized businesses. Secondly, the most successful high streets have key anchor stores on them, usually one or two supermarkets, which help pull in the footfall to the advantage of the neighbouring retailers, so they help provide a hub to that community of retailers, if you like.

Q231 Zac Goldsmith: So you do not think the growth of the supermarkets is happening at all at the expense of independent retailers on the high street? Can you see any correlation?

Jane Bevis: I am not saying "at all". What I am saying is there is still a very healthy independent sector out there, and where independents do very well is where they offer something completely different to the customer, but ultimately customers choose where they want to spend their money, and very often that is in a supermarket.

Q232 Zac Goldsmith: I hope this is not a tangent-please interrupt me, Chair, if it is-but one of the areas we have been looking into separate to this one is the planning reforms, and one of the main critiques of the current planning system is that it has a very, very strong bias in favour of the supermarkets, so really no matter how much people oppose an application for a new Tesco or Sainsbury’s or whatever it is, even where you have almost complete unanimity among the community and councillors, elected local representatives, you will almost invariably lose that battle because of the nature of the planning system. My question to you is, do you accept that criticism of the planning system? Do you believe the reforms that are being brought in are going to add more balance to the planning system, or are we not going to see any significant shift?

Jane Bevis: There is no point in a supermarket opening a store where they don’t think they are going to have any customers, so there is clearly going to be a substantial proportion of the population who support the opening of that store, and indeed, patronise it once it is open.

Q233 Zac Goldsmith: But that is not backed up by the stats. There are countless examples. I organised a referendum myself in Barnes, where we had a bigger turnout than in the previous three general elections, and nearly 90% of the people answered the referendum saying they didn’t want a supermarket in the area that the application was for, and yet that result was ignored; in that case, it was Sainsbury’s. So, yes, it is the case that once a supermarket establishes itself, people do tend to use them, regardless of the impact on the rest of the high street, but in terms of the decision-making process, it seems to me that people have no power or say at all. My question really is, do you think we are going to see an improvement in the current system, or does that even matter? Is that an issue of concern to you?

Jane Bevis: Clearly, the planning system is there to get a balance between the commercial interests of businesses and the local communities, and that is why elected representatives are involved on planning committees.

Q234 Zac Goldsmith: Do you think there should be a more balanced system, in that case? I say it lightly, we are not going to get-

Jane Bevis: I think that is the function of the system.

Chair: This is a point that has been raised by Zac Goldsmith about where sustainable development fits and what priority is given to that when weighing the decisions up as to where supermarkets should or shouldn’t be sited.

Bob Gordon: I am going to once again come back to you on the overarching objective here, which is to talk about sustainable food, and I would ask the question, is that part of a sustainable food future? What hotspot does that address? Why is that something that will necessarily bring us a more sustainable food supply chain?

Q235 Zac Goldsmith: Yes. I think there is a link, and I will come to that in my final question, but I think there are broader issues, and sustainability as a concept does not just relate to food. It relates to our communities, our high streets and so on, and I think it is inarguable that the supermarkets have the planners, whether they are elected or otherwise, in an arm-lock, and that is a situation that is almost impossible to contest. I was really asking whether you think the current proposals are going to shift things further in favour of the supermarkets or back to the community. But you are right. It is not directly relevant to what we are talking about the moment, but where it is relevant is that the more permissive the planning system, the more we allow the supermarkets to take over our high streets and displace other forms of retail, the greater the market share those supermarkets will enjoy, and the bigger the supermarkets become, the less bargaining power the producers have.

My final question to you relates to the producers, to the farmers, and we have endless critiques of the various supermarkets, some more than others, that they do not engage in fair play with the producers and they don’t pay a fair price, and I think this is something that I am hoping you will be able to address now. I will come up with a follow-up question in a second.

Bob Gordon: Supermarkets have no interest in putting their suppliers out of business. Increasingly, as resilience to climate change is an important factor for a supplier, supermarkets are working with their suppliers to develop more resilient ways of producing the food that they put on their shelves, while reducing the emissions of that food produced because we expect to have to reduce our carbon emissions so radically and because we expect such challenging weather conditions moving forwards. We are seeing a change in that relationship, and you see it very, very strongly in the dairy supply chain, where all of the supermarkets have dedicated dairy supply chains, where they pay more for their milk. We talk about dairy farmers going out of business. As I understand it, they are not the dairy farmers supplying the supermarkets, so that relationship has gone well for those suppliers to those supermarkets. They are building sustainable food supply chains for their businesses so that they will offer competitively priced quality food in 2050.

Jane Bevis: And they are helping invest with their suppliers in innovations that help make that a more sustainable production.

Q236 Zac Goldsmith: How do you answer the calls for a strengthened code of conduct? I forget which of our experts have suggested this, but it is a theme that has cropped up, that unless there is a strengthened and enforced code of conduct governing the relationship between the big supermarkets and the providers, this imbalance will always exist to the detriment of the small producers.

Jane Bevis: Of course we have the GSCOP. It hasn’t yet been in place for two years. We are still learning how effective it is. There have been relatively few complaints under the code at the moment. Our preference would be to understand how that code is working and how effective it is. The Government has made it clear that it intends to legislate for a supermarket adjudicator, and on that basis, we accept that and just want a system that will work properly for all involved.

Zac Goldsmith: I think I have taken up too much time. I am going to stop for the moment.

Chair: If you want to just pursue that briefly, that is fine.

Zac Goldsmith: I think I will come back to it.

Q237 Katy Clark: Moving on to some of the issues about food producers and buying power, do you think at the moment that customers are paying a fair price for food, and do you think that the environmental impact of producing that food is taken into account in the price that we are paying?

Jane Bevis: Customers are sending very clear signals to us that price-which is one part of value, because obviously quality is another important factor-in the current economic situation is extremely important to them and they are shopping around, and therefore it is a very competitive market at the moment. On average, about 40% of supermarket lines are on offer precisely because customers follow those offers and those promotions. It is a very competitive situation. A lot of households are facing difficulties in managing their budgets, and supermarkets have to source in a way that enables them to deliver those goods at the price the customer is prepared to pay.

Q238 Katy Clark: Given that, do you think that the price that the retailers are currently getting therefore enables the capacity to move towards more sustainable production? Is there the financial space in there to do that?

Jane Bevis: Of course, one major aspect of that is that it drives efficiency within the supply chain, and in particular resource efficiency, which is a key part of sustainability. Perhaps the challenge is where you need some major upfront investment in order to make a shift, and that is where we feel, particularly if there is some sort of infrastructure that needs to sit behind that, for example, in the waste area, that we perhaps have to look to some slightly more innovative solutions in order to achieve some of that.

Q239 Katy Clark: Have you got any examples of that that you can think of where there is a need for investment?

Jane Bevis: In terms of the way that we handle our food waste, a lot of the supermarkets now have invested with suppliers to produce anaerobic digestion facilities. We need to look at how the household waste feeds into all of that, and the broader recycling and reuse of materials and handling of waste.

Bob Gordon: There are other things there, for example, renewable energy generation, where it will be a big upfront investment or investment in technology that will enable you to capture rainwater or use the water that you have more efficiently. All of this technological investment-the kit, the costs-sometimes the payback will be sufficient that it is worth making an investment and realising that over one, two, three years, but if the payback is over 25 years, then that becomes too significant.

Q240 Katy Clark: Do you think the Grocery Code Adjudicator is going to have any role in this? What influence do you think they could bring?

Jane Bevis: As far as I understand, and we will come back with some further information if this is wrong, it is not an issue that is within the remit of the adjudicator.

Q241 Katy Clark: Do you think it should be?

Bob Gordon: Not to talk about the adjudicator, but there is a really interesting question here about how we put any kind of framework in place that facilitates investment in technology that will reduce the cost of producing sustainable food over the longer term. It will be a challenge as we move forwards.

Q242 Katy Clark: I may get a similar response that you gave to Zac when he asked you to comment on different retailers before, but to what extent do you see the buyers in the major retailers taking into account sustainability considerations? Do not choose between retailers, because we do not want to do that, but do you think they are taking this on board?

Jane Bevis: Oh, absolutely, because apart from anything else, there can be a competitive advantage in being able to demonstrate that you are addressing a number of these issues. There are other areas where, as we started out, you need some collaborative action to produce a sufficient degree of demand. For example, on palm oil, retailers are the minority buyers of palm oil. They can’t really influence the supply chain individually, but working through a group at the BRC, they have been able to get to a point where they have secured a more sustainable supply of palm oil that they can use in their products, and that is the buyers driving that process.

Bob Gordon: Let me give you an example, and I will name the supermarket, because I think it is impossible to give you the example without doing so. Marks & Spencer said that by 2020, every one of their products they sell will have at least one Plan A attribute, so that necessarily involves the buyers understanding what those Plan A attributes are and factoring that into the conversations that they have. On a more generic level, retailers are looking at how they can introduce sustainability as a key performance indicator for their buyers. The challenge is, what do we mean by sustainability?

The Sustainability Consortium, I believe, has looked at giving a score of 1 to 5 in terms of sustainability, but how do you rate carbon against water, against waste, against resource efficiency? Some of those issues are very complex. Even water is a local issue and a seasonal issue, so you can’t even compare water in terms of litres-it is a very complex argument-let alone boil that down with all other elements of sustainability, and then beyond the environmental sustainability, welfare and health. You can’t then create a score from 1 to 5 for a particular product. Again, you would need to go into some very, very in-depth life-cycle analyses for each of those products. The answer is they are looking at it; they are introducing more and more. Some of them have explicitly set it as a target for them over the longer term, but the challenge is better understanding what we mean by sustainable food so that we can start factoring specific things into those decisions.

Q243 Zac Goldsmith: Just on the point of competitiveness, could you give us some specific examples of where supermarkets enjoy a competitive advantage for having done the right thing?

Bob Gordon: You have put me on the spot, so maybe I will come back to you in a couple of minutes when my brain has caught up, but it is part of that-sorry, Jane.

Jane Bevis: Yes, but there are contrasts. For example, Asda made a major feature in its advertising a year or two ago about cutting out waste and the way they were handling waste in the business; Tesco have highlighted the way that they have started carbon-footprinting a number of products; Sainsbury’s had the first sustainable palm oil and sustainable fish finger on the market. They all have found aspects-

Bob Gordon: I think the answer is you wouldn’t necessarily put a product on the market and expect customers to start shopping in your shop because of it. It is part of the earlier dialogue about building a relationship with your customer, so Fair Trade bananas, free-range eggs, all of the examples Jane has given, where you are building a relationship as a responsible retailer.

Q244 Zac Goldsmith: All the examples that you have given, both of you, relate to public relations competitive advantage. In other words, you are improving your relationship with your customer. If you later on perhaps can think of any examples of where a supermarket enjoys a financial competitive advantage, a direct financial advantage from doing the right thing from investing in sustainability-

Jane Bevis: Marks & Spencer have been very upfront that in rolling out Plan A, they were surprised at the level of savings that they made, and they were able to take that forward more rapidly than they had originally anticipated precisely because it gave them a commercial advantage.

Bob Gordon: The figure they put on it is £70 million a year through Plan A.

Q245 Katy Clark: Is this happening at all ends of the market, and do the buyers currently have the skills to put this in place?

Jane Bevis: Yes. In terms of the supermarkets, it is not just the Waitroses that are doing this. It is happening across the full scale. Even at the discount end of the market, while they might concentrate on different things, they have a lot of incentive to cut out waste and therefore be as resource-efficient as possible.

Bob Gordon: The skills gap is an issue across all businesses at all levels of the business, not just in retail and not just in suppliers. This is quite a new area for us all to be talking about in the level of depth that we are currently talking about it. Skills is definitely an issue and something that our members are looking at, and indeed, the people within Government are looking at at the moment.

Q246 Katy Clark: The Food Ethics Council said that competition law may be preventing co-operation among the major supermarkets to use their buying power to support more sustainable products being developed. Do you recognise that as a problem?

Jane Bevis: Certainly in terms of their impact on the supply chain, supermarkets do need to be very cognisant of competition law and be careful about the way they go about things. In areas where they have relatively little influence, then coming together and agreeing with other partners in the supply chain that there is a better way of doing things and moving forward so that everybody feels this is a win-win situation, you can still make progress, but yes, there will be times where they feel they can’t come together to do something precisely because they would risk being in breach of competition law.

Bob Gordon: I would just add that I sit on the steering group of the Product Research Forum with a number of retailers, brands, WRAP and Defra. We talk very openly about what the issues are, what potential opportunities there are, and we talk about that in a pre-competitive context, so we are understanding the context and then, if any voluntary commitment is established as a result of those conversations, the individual businesses that sign up to that commitment will compete vigorously to achieve it in a way that not only gets them to achieve those sustainability goals, but also improves their market share.

Q247 Chair: Just before I move on, you mentioned about the skills training. Are you sufficiently engaged with the Sector Skills Councils to get that capacity that you need in respect to training and skills?

Jane Bevis: We have a very good relationship with Skillsmart Retail, which is our own Sector Skills Council. I suspect part of the problem is that in some cases, the sorts of skills we are looking at is refrigeration engineers or something, which is sort of outside of-

Q248 Chair: So you would not say that sustainability issues were flagged up within the Sector Skills Councils?

Jane Bevis: They are issues that we have flagged up with BIS and other relevant departments to get them to engage in those discussions where it is beyond our normal range of contacts.

Q249 Peter Aldous: We did touch upon waste; if we could just probe a little bit more on that. To what extent do you think the waste arising from retailers and customers contributes to the overall food waste problem?

Bob Gordon: The figures from WRAP say that-off the top of my head-around two-thirds of the waste produced in the UK is in the household and 5% is out of store and around 30% is in the supply chain. They are the kinds of figures that we are looking at. Retailers are doing an awful lot to manage their own waste, so I think of the large grocery retailers. They are either currently sending zero to landfill or are on track to do so by 2013. They are also doing an awful lot to engage with customers to help them reduce their food waste, and that is predominantly done in conjunction with WRAP, with their Love Food Hate Waste campaign, so lots of communications on how to use leftovers, storage advice, portion sizes and so on.

Q250 Peter Aldous: Is there any feedback as to whether that campaign has been successful?

Bob Gordon: Yes, there is, and we are expecting figures to be published by WRAP on 15 November and they look very good. We are very, very pleased with the progress that we are making on this, and significant reductions in food waste in the home over the last three years.

Jane Bevis: Which could in part be driven by economic circumstances, of course.

Q251 Peter Aldous: We talked about the waste from the suppliers. Do you think that there is any way the situation could be improved by not producing wasted food in the first place?

Jane Bevis: Certainly in terms of the food manufacturers, a lot of them also have programmes in place to try to minimise the impact of their waste, but again, they have a very strong economic incentive to minimise waste, because that is cost for which they get no return.

Bob Gordon: Yes, absolutely. The business case tells its own story: that you try to minimise the waste in your business because an efficient business is a profitable business. What has changed, I think, over the last five years or so is the way in which we have managed to make the most out of that unavoidable waste, so much more of it is now going to Fair Share or going animal feed or going to anaerobic digestion, as I say, pretty much avoiding landfill now.

Q252 Zac Goldsmith: On that point, there is no doubt there has been progress on that, but because of the pressure from the buyers for superficial perfection, the perfect apple, the perfect vegetable and so on, the figure that we had quoted to us-I hope this is correct, or I hope it is not correct, but I don’t want to mislead the Committee-is that two-thirds of all fruit and vegetables are wasted before they even reach the shop. If that is the case, or even if the figure is an exaggeration, and I will go back and check it, you could not rightly or legitimately put the blame on the shoulders of the producers. It would have to come from the pressure for that superficial perfection. Is that something that the supermarkets are willing to address? Are there any signs that they are addressing it?

Bob Gordon: Yes, they are addressing it, and I would be extremely surprised if that figure is true. We hear stories of where fruit and vegetables that are cosmetically challenged, shall we say, get used in other products, so it gets put in ready meals, it gets put in soups, it gets used. You would be a fool not to use it, because it would be a cost, it would be waste, whereas if you use it, you are reducing your cost, and you are becoming an efficient business.

Q253 Zac Goldsmith: Whether it was two-thirds or a third-and I accept there is a big difference between the two; the figure that I was quoted was two-thirds-even if you lop 60% off that, it is still a staggering figure, an enormous amount of waste as a result of this pressure for perfection. There is a project at the moment that Innocent Smoothies is running where they are collecting fruit that would otherwise be thrown away and they are teaching children how to turn it into smoothies, and they are doing it at school after school after school. They calculate that they have enough fruit, let alone vegetables, to provide smoothies for every primary school in the country, so we are generating an enormous amount of waste, whether or not the two-thirds is an exaggeration.

Jane Bevis: But, for example, Tesco did start marketing ugly fruit and vegetables. Ultimately, it is whether customers take these things off the shelves, isn’t it?

Bob Gordon: And not just Tesco. You have a number of retailers now, one of them says their value range is not as attractive but just as tasty and it is at a good price, so we are doing that.

Q254 Peter Aldous: Just touching on food we use-that is, wasted food-for animal feed, there was, leading on from foot and mouth, a reaction against putting it into pig swill. Does that in any limit the amount of wasted food you can recycle and use in animals?

Bob Gordon: Yes. It is not my policy area. I am sorry if I can’t go into too much detail, but as I understand it, any animal byproducts don’t go into that animal feed, so there is that restriction and there is that limitation.

Q255 Peter Aldous: We touched upon alternative uses, whether that is biomass, anaerobic digestion or animal feed. Are there any barriers, do you feel, that prevent one really making better use of that and maximising the reuse of food in that way?

Bob Gordon: It is infrastructure. We have seen a lot of anaerobic digestion come onstream in the last couple of years, but I believe that less than a third of local councils, for example, are collecting food waste separately, and again, that has risen very, very fast in the last few years, but the infrastructure that underpins that collection doesn’t exist, so retailers have found ways in which to build relationships with anaerobic digestion providers in areas of the country where that exists, but there are still some areas of the country where they can’t do that.

Q256 Peter Aldous: What are the constraints preventing that infrastructure?

Bob Gordon: Without going into the detail on it, planning, return on investments, finding suitable places, so you need to minimise your food waste miles, because the energy that you recover from the food isn’t as big as you might hope, so you need to restrict your journey times. There are a few things that will limit you, but things are moving very quickly in that area.

Q257 Martin Caton: Do we need a Government strategy to provide a vision and join up policy for sustainable food supply?

Jane Bevis: Yes, and we were moving towards having one prior to the election, and I think we felt that an awful lot of good work had been done in terms of the 2030 strategy and it would be a shame to lose that good work and not pick it up again and build on it.

Q258 Martin Caton: Are you aware of the present Government taking any action to develop such a strategy?

Bob Gordon: I’m aware of some projects. There is the Green Food Project, which is currently just starting with Defra and some of the players in the supply chain, but in Jane’s opening remarks we talked about a strategy beyond the UK. We need a much stronger definition of what we mean by sustainable food and we need buy-in at least at a European level of how we achieve that. But supply chains are global, and to operate just as the UK might miss some of the opportunities to get some really big wins.

Q259 Martin Caton: Are you in discussions with Defra to develop an overlying strategy?

Jane Bevis: Yes. We would like to have a coherent food policy and work with Defra on that.

Q260 Martin Caton: Would that build on the 2030 strategy or do you think you need to start again?

Bob Gordon: That is what we would like to see, yes.

Q261 Chair: Do you think that is what you are likely to get?

Jane Bevis: We have regular meetings with Defra, the NFU, the FDF and ourselves all in the room together as the whole of the food supply chain, and we would like those conversations to lead on into those areas.

Bob Gordon: I also think it is happening in a slightly different way, so at the Product Research Forum, that is the conversation that we are having, having moved away from-the first agreement was about weight of packaging, then on to the carbon impact of packaging. Now we are talking about the environmental impacts of products, starting with food, so we have essentially come to it, but we haven’t come to it from sitting down to design a food strategy. We’re just working through as we become more sophisticated in the way we understand the impacts of food and the opportunities for us to reduce that.

Q262 Martin Caton: Does that obviate the need for a strategy, then?

Bob Gordon: No, I don’t think it does. It’s about 80 organisations, including Government, NGOs, third parties like ourselves, retailers and brands, so it is not an all-encompassing group. It certainly doesn’t involve some of these smaller retailers that we’ve been talking about. Some strategies, some directions and some support there for other players is necessary, yes.

Q263 Chair: Finally on this point, when we have met with some retailers in the course of our inquiry, the issue of waste has come up, and one of the points that has been made to us is that the localism agenda could end up with different local authorities with different waste collection regimes and that could impact quite a lot in food procurement and food policy. Do you have any concerns about that?

Jane Bevis: I think we were in that quite disparate area in terms of policies before localism was invented, if you like. That was what was happening in reality. To a certain extent, we have begun to see a number of local authorities coming together to provide these sorts of services so, for example, in North London, it is not on a single borough basis. It does cover a number of boroughs and that is helpful. We think, on things like recycling and reusing waste, unless you can give a coherent and consistent message to people, it is confusing. We have developed the On-Pack Recycling Label to help customers dispose of their packaging, but there is a big band in the middle that says "Check locally" because there just is not consistent behaviour across local authorities.

Bob Gordon: What we would like to see in terms of local authority collection is consistency of materials collected, but local approaches as to how those collections take place, so there is local freedom to do it in a way that is appropriate for the area, but we have consistency across the UK to facilitate messages, certainly through the On-Pack Recycling Label and through other messages that the retailers give out.

Chair: Okay. I am very conscious that we do have a break coming up shortly, so if I may, on that point I would like to leave it. Can I thank each of you for coming along this afternoon and giving evidence? I hope that you will take an active interest in our report when it is finally published.

Zac Goldsmith: I just wanted to add for the record, the figure is not two-thirds. The figure that I received is 30% to 40%. Apologies for texting-I was determined to get the figure-30% to 40%. I hope you will take that back to the supermarkets and get them to buck up.

Chair: Okay. On that point of qualification, I will close the meeting, so thank you very much indeed.

Prepared 10th May 2012