Brand Britain: Promoting and Marketing British food and drink: Government Response to the Committee’s Fifteenth Report

Seventeenth Special Report

The Environment, Food and Rural Affairs Committee published its Fifteenth Report of Session 2017–19, Brand Britain: promoting British food and drink (HC 1039), on 27 June 2019. The Government response was received on 2 September 2019 and is appended to this report.

Appendix

Introduction

The Government welcomes the report published by the EFRA Select Committee on the 27th June 2019 on Brand Britain: promoting and marketing British food and drink.

It provides a timely opportunity to highlight how we can work in collaboration with industry to showcase our high quality products, and strengthen the positive perception of the British food and drink brand around the world. We look forward to continuing to work with the sector to support our exporters, both existing and new, in maximising their potential.

We have taken on board the recommendations provided by the Committee and provide our responses to each of them below.

Response to the EFRA Committee recommendations:

British consumers

1.Research shows that origin is important to some British consumers, but purchasing behaviour is primarily driven by price. (Paragraph 7)

Whilst price, when viewed in isolation, appears to be the most important factor in the decision making process, the existing evidence1 shows a more nuanced picture of the drivers of consumer purchasing. Consumers tend to place more emphasis on information such as price, brand name, special offers and familiarity but they also report strong values and preferences with regards to origin and provenance (as well as other issues such as sustainability, nutrition and quality).

For example, the majority of consumers think it is important to support British farmers and producers. However, when consumers are asked questions about their own purchasing behaviours, this becomes less consistent. Fewer consumers report that they prefer to buy British food, where possible.

A minority of consumers appear to check where food was produced before buying. This suggests that provenance plays a role, however, it does not always translate to purchasing. This can also vary depending on the type of product that is being purchased. Those individuals who actively engage with country of origin labelling or provenance, predominately use it in relation to meat and fresh fruit and vegetables, rather than uniformly across their purchasing.

2.The Government should introduce requirements for the origin of characterising ingredients in food products to be specified on labels. This would enable consumers to make informed choices. (Paragraph 10)

The Government has committed to review food labelling when the UK has left the EU. This will consider origin labelling which will take into account what has been achieved already through voluntary initiatives. It is worth noting that the majority of meat and dairy products sold at retail have transparent origin labelling. This has been provided voluntarily for meat and dairy ingredients.

On Exit from the EU, rules on food labelling will be carried over into UK law by the Withdrawal Act. This will include requirements concerning origin labelling and also primary ingredients (which will often be the characterising ingredient). Although this latter provision will not take effect in EU law until April 2020.

As we await confirmation of the terms under which we will exit the EU, we have not at this stage prepared domestic legislation that would implement the provision around primary ingredients in the UK. As soon as is practical following consultation, we will make a decision on how this section of the EU Regulations (1169/2011) might be enacted in the UK.

3.The Government should explore the potential of blockchain and similar technology to increase transparency and traceability in the food supply chain. This could be useful for consumers when buying food and drink products with multiple ingredients and where ingredients may have crossed international borders during processing. (Paragraph 11)

The Government is aware that one of the key strengths of UK food and drink exports is our reputation for quality and traceability. As such, the government is exploring the use of blockchain (and related technologies) in the food supply chain. We have convened a Food Network, with stakeholders from central Government and industry, to explore the application of such technology, identify potential uses, and determine how it can be taken up.

Work to date has focused on meat (beef and pork) supply chains, but we are also working with HMRC to see whether it can be used in wine imports from Australia. We are also starting to explore application of this technology to fresh produce.

We are formally evaluating this work and are gaining an understanding of the technology and IT market through practical application. Key issues include the importance of interoperability, setting data standards when sharing data through the supply chain, the need for different governance arrangements for a distributed operating model, and the security questions associated with using such a model.

International markets

4.Research suggests that awareness of British food and drink is low in international markets. This provides an opportunity for improvement, particularly if promotion is tailored to the values of each market, for example emphasising the safety of British food in China. More research should be done into some overseas markets to work out the best way to promote British products overseas and ensure greater exposure to British food. (Paragraph 23)

The Government currently uses research from campaign partners including VisitBritain and the Agriculture and Horticulture Development Board (AHDB), as well as insight identified through working with in-market specialists across Government and industry, to gain an understanding of what factors are most important in each target market. This includes identifying how best to communicate to buyers and consumers in specific markets and the qualities of UK food and drink that will most appeal to them.

The research informs our campaign narrative, which includes quality, safety, heritage and innovation of UK food and drink at its core.

The Government is carrying out additional research into priority export markets. This research will aid both Government and industry to gain a better understanding of the market trends and potential barriers that exporters may face. It should help UK businesses better identify export opportunities in the future.

The Government is determined to promote UK food in new markets. Extensive work is underway to do this, much of which is set out below in response to different recommendations in the report.

5.International market research to support exports is lacking, and this has been recognised by the Agriculture and Horticulture Development Board (AHDB) and industry. We commend the efforts of the AHDB in increasing its focus on international market intelligence and support the Food and Drink Federation’s (FDF) proposed market research unit. Because the AHDB and FDF support different parts of the food and drink industry, these efforts should be complementary. However, this should not be taken as a given and it would be useful for businesses if market research was coordinated. The Government and AHDB must work closely with the FDF to develop and support the new market research unit. The market research unit ought to provide insights to enable the Government and exporting businesses to promote and market British products more effectively. (Paragraph 24)

The Government is working closely with the Food and Drink Federation (FDF) to review the industry proposal to create a new market research unit. The knowledge and expertise of the Agriculture and Horticulture Development board (AHDB) and others, will form part of the review, to ensure any such unit is closely aligned and complementary to existing Government and industry services, in order to drive maximum benefit for exporters.

6.More should be done to increase overseas consumer exposure to British food and drink. We recognise that this needs to be done sensitively and in a way that enables nations of the UK to retain their separate identities - as has been done with the tourist boards, VisitBritain, VisitEngland, VisitScotland and Visit Wales. (Paragraph 25)

The UK commands a powerful brand image overseas and capitalises on this through the world-leading and globally recognised GREAT Britain and Northern Ireland campaign. The Food is GREAT campaign works with partners in every region and nation of the UK to ensure the diversity and heritage of our food and drink offering is reflected in campaign activity.

Food is GREAT actively targets consumer audiences internationally to increase the perception of, and boost global demand for, UK food and drink. In recent months the campaign has delivered successful consumer-focused marketing activities in the USA, China and Japan.

Successful consumer-targeted activities have included the British Spirits and Sparkling Wine Week in New York City in October 2018 – reaching a total campaign audience of approximately 38.1 million, and a live showcasing of UK food and drink streamed across digital platforms in China to 7 million consumers, coinciding with the Food Hotel China trade show in November 2018.

In March and April 2019, Food is GREAT extended campaign activity into Japan to capitalise on heightened interest and growth potential around the 2019 Rugby World Cup and 2020 Tokyo Olympics. The activation included an experiential UK Food and Drink Tasting Gallery in Osaka, held in partnership with British Airways and attended by hundreds of Japanese consumers and profiled on TV Osaka. Total consumer reach was in excess of 33 million. Welsh Lamb and Bruichladdich Scotch Whisky were among the brands profiled.

Food is GREAT is building on these successes in 2019–20, continuing to deliver a strong narrative and experience of the key strengths of UK food and drink to consumers in its target markets.

Food is GREAT also operates an ‘always on’ Instagram campaign followed by over 29,000 people internationally.

7.We are satisfied that the Government is on track to meet its target to increase food exports to £23 billion by 2020. However, £23 billion was a modest target. The UK Food and Drink International Action Plan (IAP) 2016–2020 should be reviewed and updated immediately, with a new plan published for 2021–2025. We consider that a key focus of the next IAP should be on improving export activities of SMEs. The next IAP should be accompanied by a more ambitious target for the value of food exports. (Paragraph 30)

The Government has begun discussions with industry to review the International Action Plan for Food and Drink (IAP), with the intention of replacing the current plan when it ends in 2020.

The Government places great emphasis on raising the export ambition of food and drink businesses, many of which are SMEs. We will do this in partnership with other providers of export support in the public and private sector. We want to ensure we are encouraging, informing, connecting and providing the right finance to companies not just at the start of their journey, but right through their export experience.

In order to ensure the new plan is ambitious, industry must be fully involved in development and delivery of the plan. It is too early to pre-empt exactly what any new targets would look like. However, we fully agree that a focus on SMEs will be essential to raising the ambition of the sector.

Within the Government’s Export Strategy, the ambition is to make the UK an exporting superpower. Food and drink exports form part of our ambition to raise exports from 30% to 35% of GDP.

Exports of food and drink are rising as a result of Government efforts to support businesses and negotiate access for UK products to markets which were previously closed. For example, gaining market access for the export of beef and additional dairy products to China, lamb to India, and beef and lamb to Japan will significantly increase the value of UK food and drink exports over the coming years.

8.Red Tractor appears to be working well as a domestic assurance scheme, but consideration needs to be given to whether this assurance scheme could be used to promote British products overseas. The Government should explore a variety of different options to effectively promote British food and drink overseas. A “one size fits all” approach will not work across different countries. (Paragraph 35)

The Government is proud of the UK’s reputation for producing high quality food and drink and is aware of the role that assurance schemes already play in informing domestic consumers of the quality of the products they are purchasing. By providing a clear and independently verified measure of the high standards required under each individual scheme, they in turn emphasise the strength of our products in areas such as safety, animal welfare and traceability.

The Government is mindful that the use of assurance schemes to promote UK exports is something that would need to be considered as part of an overall strategy, intended to address the needs of each specific market. Factors such as recognition, translation and impact in the target market would need to be assessed in order to ensure the most effective approach. We are committed to working with all relevant parties in order to identify and implement the best approach to each market.

The Government agrees that a “one size fits all” approach is not the best way to promote UK food and drink abroad. We aim to adopt an approach tailored to the needs of the individual market and underpinned by factors such as analysis of market conditions, consumer behaviour, supply and demand, market access and the expertise of our own locally based staff.

To determine how to promote our high quality UK food and drink products, we carefully consider the available partnership and branding opportunities available to us in each market. We then promote these in a way which is meaningful and will resonate with local audiences.

9.Defra told us a year ago that it was working on a “gold standard” for food and farming quality. Although Brexit preparations have understandably delayed much of Defra’s work, we are nonetheless disappointed that little progress appears to have been made on this, given the importance of increasing UK exports to the Government’s economic and trade strategy post-Brexit. The current deadline for EU Exit is 31 October. By December 2019, Defra should provide us with a detailed update on the development of the “gold standard” including what metrics it would be based on. We would like to see greater collaboration between Defra, AHDB, Red Tractor, other assurance schemes and other food and drink organisations to promote British products overseas. (Paragraph 36)

Work is underway within Defra to develop new schemes for a variety of purposes, including to allow Government to pay public money for public goods, and to monitor regulatory compliance. We are currently exploring how any indicators arising from those schemes can be used as a Gold Standard Metric for food and farming quality. The Gold Standard Metric is therefore reliant on the metrics that relate to, for example, animal welfare, environmental land management and regulatory enforcement. We are also investigating how the Gold Standard Metric might support UK exports in line with the Government’s economic and trade strategy post-Brexit.

We have established and continue to build partnerships with a variety of trade bodies, industry, and devolved administrations. Our approach is underpinned by the International Action Plan (IAP) and our commitment to work with industry through the Sector Deal negotiations.

Our close partnership with AHDB has resulted in their use of the GREAT brand across the world at overseas tradeshows. Additionally, Food is GREAT profiled over 700 UK food and drink brands in 2018/19, and worked directly with over 150 of these.

10.Geographical Indications (GIs) provide legal protection against unlawful imitation of protected food and drink products. GIs confer a price premium on products and therefore they are economically important as well as being a recognised indicator of origin. Given the UK’s relative strength in high-value food and drink exports, maintaining the protections that GIs provide in major international markets is a priority for the Government. This is reflected by the inclusion of GIs in the Withdrawal Agreement negotiated with the EU. (Paragraph 43)

The response to paragraph 43 is included at recommendation 11 below.

11.The Government is optimistic that the EU will continue to recognise UK GIs in the event of a no-deal Brexit, given the mutual benefit, but there is no guarantee. Therefore, there is no room for complacency. Given the potential for the UK to leave the EU without a deal in October, the Government should ensure that the domestic GI system meets the criteria required for EU approval and is ready prior to exit, to minimise disruption to British exporters. It should prioritise seeking a reciprocal agreement with the EU on GIs if agreeing an overarching withdrawal agreement is not possible. (Paragraph 44)

We are committed to establishing UK GI schemes that ensure existing UK GIs continue to receive uninterrupted protection from imitation and evocation in the UK after EU Exit. The Government will use legislation made under the EU (Withdrawal) Act to replicate in domestic law the framework that governs the four EU GIs schemes (for food, wines, aromatised wines, and spirits). The UK will protect, by including on the UK’s new registers, all UK GIs.

In the event of a ‘no-deal’, the default position is that UK GIs will continue to be protected in the EU by virtue of being on the EU’s various GI registers. That protection will continue automatically in the EU unless the relevant entries are removed from those registers. The EU would need to introduce specific legislation to remove any entries.

It is, of course, not possible for the UK to guarantee that the EU will not change its rules so that it could remove UK GIs. It is sensible contingency planning to advise UK GI holders to be prepared to apply as third country producers for recognition in the EU in the event that the EU does change its rules. If the EU takes steps to remove UK GIs from their registers, the UK Government will provide support and guidance to GI producers on this process. This is set out in our technical advice on GOV.UK.

Export support

12.Improving export support for businesses is vital for improving the marketing and promotion of British food and drink more widely. The current postcode lottery of regional support for companies in England that wish to start or increase exporting is undesirable. We commend the initiative shown by the industry to improve this through the proposed Food and Drink Manufacturing Sector Deal proposal. This must, however, be underpinned by Government strategy. The Government should publish its consultation on the Shared Prosperity Fund. The consultation should include proposals on enhancing the competitiveness of SMEs, with a sectoral breakdown, including the food and drink manufacturing sector. In designing new support for English companies, the UK Government should examine what it can learn from the support provided by the Devolved Governments to SMEs in their nations. (Paragraph 51)

The Government is committed to support every business to export, wherever they are located. In England, there is an extensive network of over 240 International Trade Advisers spread across the country, many of them with specific expertise in food and drink, and we review our service regularly to ensure it provides the right offer to companies across England.

We allocate regional funding to our English teams based upon the distribution and density of businesses in the regions. The UK has greater disparities in regional productivity than other European countries. For example, we continue to build the Northern Powerhouse and Midlands Engine regions to help create prosperous communities throughout the UK. We recognise that different policies will be needed for different places - regional approaches can help to deepen pools of skilled labour, drive competition, and increase market access.

Every region in the UK has a role to play in boosting the national economy. We will build on the strong foundations of our city, growth and devolution deals and continue to work in partnership with local leaders to drive productivity.

The Government export support will offer a level playing field for all businesses across the UK, including SMEs who make up the majority of the UK’s food and drink sector. We of course value our relationship with the Devolved Administrations and rely on their expertise to help ensure the needs of their businesses are reflected in Government trade and investment promotion activity.

The Government recognises the importance of providing clarity on the future of local growth funding and the UK Shared Prosperity Fund. We will consult widely on the fund and have already held 25 engagement events across the UK to date. These were attended by a range of representatives from the business community, all of whom had an opportunity to share their views and aid policy development.

13.Getting out to international trade shows is crucial to promoting British food and drink abroad. The Tradeshow Access Programme (TAP) is seen by industry as an important way for companies, particularly SMEs, to promote their businesses and break into new markets. We accept that there may have been satisfactory reasons for the budget to have declined slightly until 2016. However, following the EU referendum, the Government should have anticipated the increased necessity for British businesses to access and promote themselves to new markets. Instead, TAP spend on food and drink has declined by 10 per cent since 2017/18, as part of an ongoing trend of decreased funding. Opportunities for companies to access grants have become more restrictive, although we welcome the increased focus on SME participation. (Paragraph 55)

The response to paragraph 55 is included at recommendation 14 below.

14.Given the Government’s export ambitions, the Tradeshow Access Programme should be reviewed urgently, in consultation with industry and trade associations. Funding should be reviewed and potentially increased as part of the upcoming Spending Review. (Paragraph 56)

The response to paragraph 56 is included at recommendation 15 below.

15.In its response to our Report, the Government should explain why the TAP budget has been underspent every year since 2014/15, particularly when the number of grants available per company have also decreased. (Paragraph 57)

The overall TAP budget for all sectors is in line with the last Spending Review settlement. Spend on events in the Food & Drink sector is proportionate to the overall TAP budget.

We regularly review the effectiveness of our services and programmes to ensure they offer the best outcome for UK businesses. We are currently undertaking an independent evaluation of TAP to ensure we are getting the maximum impact and value.

TAP spend is driven by customer demand. Actual spend is dependent upon the number of successful applicants across the programme. The 2018–19 TAP programme supported 313 events, and provided 3,256 grants to SME businesses. The 2019–20 TAP programme is forecast to support 255 events, and provide grants to 3384 SME businesses.

16.Having a dedicated food and agriculture specialist on the ground in China has proved to be helpful for market access and maintaining ongoing dialogue about British food and drink. Diplomatic and trade relationships are built over time and we therefore expect this presence in China to continue. We are satisfied that the Government is taking action to increase the numbers of such specialists in other key markets. (Paragraph 65)

The response to paragraph 65 is included at recommendation 17 below.

17.Currently, the AHDB funds 90 per cent of the Food and Agriculture Counsellor in China. This has led to useful synergies, but, as the AHDB is a levy-funded organisation, this means the role is essentially funded by British food and farming businesses with a focus on raw agricultural commodities. However, the UK’s strengths also lie in exporting value-added and branded products. Although the AHDB should continue to provide some funding, we recommend that Food and Agriculture Counsellors in other markets are co-funded by the Government and the wider food and drink industry. (Paragraph 66)

The Government is pleased that the Committee recognises that on-going negotiations and dialogue with the Chinese authorities has achieved increased exports, and greater access for food and drink commodities. Further, the Government agrees the importance of the Agricultural Counsellor and their wider team’s role within China in achieving these outcomes.

The Government will continue to look at the model and success of the Food and Agriculture Counsellor position in China. We are working with industry to identify priority countries where similar support will benefit UK food and drink exporters. We agree with the Committee’s recommendation, and will be looking to encourage other parts of the food and drink industry to help fund further overseas posts via the Food and Drink Sector Deal.

We are pleased to see that the food and drink industry is supporting a similar appointment in India, which will be based at the UK India Business Council. Recruitment is also underway to fill a similar position in UAE which is being wholly funded by Government.

18.Unfortunately, too few British exporters know about the work of the Food and Agriculture Counsellor in China, aside from AHDB members. As well as increasing the numbers of counsellors, the Government should ensure that their existence is better communicated, particularly to SMEs. As a minimum, the counsellors should be identified on each embassy’s website and the new export portal proposed under the Sector Deal. They should also regularly participate in UK food and drink industry events and conferences. (Paragraph 67)

The Government has a wide network of help and assistance for SMEs looking to export – both those new to export and seasoned professionals. This help ranges from initial market information found on great.gov.uk, to in-depth help and support provided either from International Trade Advisors or staff in British Consulates and Embassies overseas, along with other local delivery partners.

We receive more enquiries than any other sector. Naturally, it is important that we ensure our staff in overseas posts are working on those areas where they can make most impact. Therefore we have a successful triage system to enable us to manage our enquiries appropriately.

The Government will consider how it communicates the different resources it has in place most effectively, including in overseas posts, so that businesses can access the most appropriate advice and support.

Equally, the Government attends major Food and Drink trade shows such as SIAL (Paris), ANUGA (Cologne) and IFE (London) where multiple representatives from its overseas posts attend to offer advice on doing business in the countries where they are based. Bespoke “Meet the Buyer” events across the UK organised by DIT, also present an opportunity for exporters to engage directly with local buyers who are often accompanied by overseas staff.

19.The AHDB conducts market research and promotes British food and its efforts are split across domestic and international markets. This is welcome, but also ambitious. The current review of the AHDB should consider whether the balance of funding between domestic and international market intelligence and promotion is fit for the future and meets the needs of levy payers. AHDB should assess if more needs to be done to promote to the domestic market. Furthermore, the Government should also consider the case for splitting responsibility for promoting to the domestic market from that for the overseas market, so these two, different, important markets are not competing for resources from the same pot. (Paragraph 68)

AHDB has existed for ten years, during this time the industry has undergone significant change. Last Autumn Defra ran a Request for Views to give stakeholders an opportunity to express their opinions on AHDB’s future. Analysis of the results was paused to divert resources to no deal planning. However, work has now recommenced and a summary of responses will be published over the summer.

This will inform Government thinking regarding its future direction. We are keen to ensure this review delivers an organisation that fits with the challenges the industry faces, and meets its long term needs.

The Government has commissioned Defra’s lead Non-Executive Director, Henry Dimbleby, to lead an Independent Review and to develop a series of recommendations that will help shape a National Food Strategy.

The strategy will help ensure that our food system delivers healthy and affordable food and is built upon a resilient and sustainable agriculture sector. The National Food Strategy will cover the entire food chain from field to fork, including the production, marketing, processing, sale and purchase of food.

20.Brexit makes it important for the UK to access new markets for food and drink as well as maintain trade with existing countries and the EU. While progress is being made in some areas, we are concerned that the Government is not being ambitious or strategic enough in its approach to marketing and export activities. Market access and increasing exports do not happen overnight, and more action must be taken urgently. The food and drink industry has recognised what needs to be done to increase export activities. The Government should approve the Food and Drink Manufacturing Sector Deal immediately and confirm a timetable for its implementation. (Paragraph 69)

The Government is committed to working with industry to increase ambition and opportunity across the sector. This includes the Food and Drink Sector Council, which aims to set a forward looking agenda to boost productivity, including a specific working group on exports, and the Food and Drink Sector Deal.

The deal is in the formal negotiations stage, however, the pace of work has slowed due to the current focus of industry and Government on EU exit. When this situation changes, we will look to build the momentum on negotiations and progress the proposals as quickly as possible.


1 Published statistics from the 2016 and 2018 FSA Food & You survey. Supported by data from unpublished sources such as the Mintel, 2019. UK Food Tracker: British Food Attitudes.





Published: 9 September 2019