Select Committee on European Communities Minutes of Evidence

Examination of Witnesses (Questions 180 - 187)



Lord Grantchester

  180.  You have raised the subject of segregation for growing crops, but, generally speaking at the moment, do you see a role for government in requiring segregation of crops already in the market, or do you see this as pressure of to be exerted through commercial contracts?

  A.  The simple answer to that is yes. We have long argued for the matter to be left to the market. However, the refusal of the biotech industry to work with the rest of the trade on this matter means in this case that we do seem to appear to need regulatory controls, and most of the reasons for that have been indicated in the submission I have provided.


  181.  You refer to a refusal of the biotechnology industry to work with the retail trade. Could you amplify a bit that refusal of the biotechnology industry to work with the retail trade?

  A.  Well, if we go back a little while, the British Retail Consortium actually was aware of the consumer concerns regarding biotechnology and has been for some time. You have to remember that in the United Kingdom we are all aware of the BSE issue and the fact that consumers were bound to be concerned about hearing that scientists were again playing with their food in what appears to be an unnatural way. Therefore, the British Retail Consortium actually had a policy which sought segregation of the GM crops. There was significant dialogue with the American Soybean Association and with Monsanto directly to make sure that when they bought the new biotechnology products to market, they would be segregated and the intention was to make sure that consumers were given a choice, would gain confidence in the new biotechnology products and then there would not be a need for segregation in the long term. That was the intention. The responses that came back from the biotech industry were very positive for almost a year and then after the crop had been planted and put into the chain, we got the answer, "Sorry, it is now mixed and there is nothing we can do". That was not a particularly good way to work with the United Kingdom retail trade. In addition to that, whenever we have actually aired the views of the retailers and the consumers, the stance that has come back is very strongly put that there is no need and it was said once that it was "just backward Europeans who did not like change". I am afraid that that is not a particularly positive attitude to take with a United Kingdom retailer when all we have been trying to do is provide our customers with what they require.

Lord Grantchester

  182.  Perhaps I could follow up your answer by perhaps suggesting that there might be a role for the Government in segregation, but how do you think that this could go forward and what would be the costs involved? Do you think that this would require supply chains to be dedicated one way or the other? What about traces from one batch of supply to another? How do you see this going forward as a requirement of separation?

  A.  We already have identified ways in which you can actually keep these crops segregated from our point of view, which is why we have provided a non-GM alternative. Perhaps if I can just go into some of those controls, we might be able to establish how that then would be maintained, if that would be appropriate. We basically control our non-GM products with a combination of testing and audit trail, as we would do actually with any other critical material. In Canada, the organic food model has been used, so we use certified seed and then at each stage of the process we actually have people who audit the sites to make sure that the material is being segregated and actually provide a certificate the next day to say that that material came from a non-GM crop. Then in order to remove the issue regarding segregation during shipping, we have been shipping a whole shipment of non-GM material. That material then goes to a site that only deals with non-GM material, so in the case of the Canadian supply, it is going to a flour mill, which is Spillar's, and that site is totally Non-GM. As we do not need a great deal of that material, so any excess material we then put back into the normal commodity market at normal commodity prices. Nobody is particularly bothered if we actually co-mingle non-GM into a GM crop, so, therefore, that is what we are doing. By doing so, you have an excess of material that you do not require. This why we can openly make it available to other people and, if you would like, we have more details on the specific controls from Spillar's Premier Products and we could leave you a copy of that to look through. In Brazil, the situation is slightly different. In that case, the actual site that we are using has control over the farms that it buys the actual beans from in that it operates through a co-operative system, so they provide the seed to the co-operative farmers and the farmers then supply the beans back. They are already doing some field-work in order to establish that those farmers are truly growing a non-GM crop before the beans are produced. They can test the leaves for the DNA presence and make sure that it is clear. As the site that is receiving the beans processes the materials all the way through to the finished raw material, in this case soya lecithin or soya protein isolates, then there is no problem with co-mingling on that site. Then when we are sending the finished product, (the raw material for our suppliers), we are sending it in drums and in bags and, therefore, in the shipment there is no problem with co-mingling, so a great deal of the issues regarding the segregation can be resolved in that way. The site in Brazil has doubled the size of its capacity in the last year and has plans to double again next year, so in terms of volume capacity, it is perfectly feasible, and obviously we have paid a great deal of attention to soya and that is because it is a first commodity crop, but once we have that established, then we think that as new GM crops come on, people will see opportunities for them to have a niche market and we see that being perfectly possible.

Lord Moran

  183.  You did include a piece about labelling in your memorandum of 4th June and I wondered whether you were happy with the Council agreement which they made recently on labelling and whether you think that labelling should go further than simply saying that a product is genetically modified and perhaps say why it has been modified, as is the case, I think, in Canada?

  A.  We have to say that the recent amendment to the labelling proposals we generally support and it is a very positive move. It is much clearer to those who wish to provide GM products as to how to do that and the message to the consumer will be much clearer, so we generally support the changes which have recently been made. Our key concern is that all ingredients derived from a GM crop will not actually be labelled. The soya oil will not necessarily be required to be labelled. The difficulty here is that if you have an issue with genetic modification because of the ethics of it, then certainly you would want to know that that soya oil is present. If it is the fact that, as a consumer, you are concerned about the fact that you do not wish to eat the DNA material, then the issue here is that there are other products, such as lecithin. This does actually contain the DNA material, but because lecithin is considered to be an additive, it is not included in the labelling requirements. People will still be eating GM DNA and it will not be labelled, so the labelling does not quite go far enough in terms of its requirement, so we are concerned about this.

  184.  Can those problems be overcome, do you think? Is there a practical way in which it can be done?

  A.  Well, certainly at EU level they need to consider additives, eg. colours and flavours. It is not unusual to have soya oil, for example, used to disperse colours and quite often materials like hydrolysed vegetable protein will be found in flavours. It is just simply a question of saying that if we are wishing to label materials which contain GM material, GM DNA, then that should cover all ingredients and this can be accomplished by changes to the regulations. I think that the EU will need to look at the additives and then cover the GM issue in that review.


  185.  What is your view about stating on the label that the GM process has been used even though there is no DNA present in the product?

  A.  Well, the way we have approached the labelling issue and the removal of GM ingredients is we have already removed, as I have said, the GM ingredients which contain protein and soya isolates and we have also removed the soya oil that does not contain protein. The next level that we are looking at currently is the processing aids and seeing whether in actual fact we should and how we can remove these. Where we can remove them, we are doing so and if we are unable to do so, we will then consider how best to provide information to the consumer. It may be that there are various ways we could do that. If you take chymosin, which is a product of biotechnology used in cheese production, then it may be that the suggestion that vegetarian cheese indicates the presence of chymosin is enough to tell consumers what is in that material, but it may be that that is not enough. We are still working and trying to establish what are all the ramifications of trying to label processing aids and, therefore, determining whether it would be best on the pack or whether it would be best on information provided to the consumers at the point of sale. I think it would depend on the type of modification that is present. We would want to get consumers involved and ask them what do they want to know about and where do they want that information and what they believe to be practical for the trade.

  186.  Can I ask your views about the EC regulatory system? Do you have any major problems with it as a retailer and are you aware of any that others in the retailing industry in this country have of the EC regulatory system? What are your comments on it and its operation?

  A.  I suppose in this case the main problem is that the regulations were not particularly well thought out originally and were quite badly drafted with almost impossible periods of compliance. We can almost guarantee that under European law these days there will be an amendment to it when somebody sees sense. What we have to do is guess what those changes will be and what will be the outcome of them and then go down that path and try and make sure that we can comply. An example of that is with thresholds. We have gone down the line of providing a non-GM alternative and we have to have thresholds to be able to do this. We had to go down the route of supplying the non-GM alternative before we got the regulations changed which might have meant that we would have ended up in court having to defend the fact that we were giving consumers a choice. We were prepared to do that because we believed in what we were doing. That is clearly a nonsense. With the labelling changes which have just come through, they did extend the dates for compliance, but for those that are selling GM products, they have 90 days to change the labels, which, if you can imagine for frozen products and grocery products with a long shelf-life, you may only revamp the packaging or make the packaging once a year, so there is no way you can easily and readily change thousands of labels in 90 days. Unfortunately the regulators still do not seem to understand the difficulties of complying in time. When we do get amendments to regulations for consideration, as a larger retailer in a trade association we are very fortunate in the United Kingdom that we do get the information through fairly quickly, but the timescales we are talking of for consultation are often in terms of days, not weeks, and it is very difficult to get a consensus view, a proper decision and a proper debate in that time-frame, so we still have difficulties in that area. Some of the specifics that we are trying to handle at the moment include quantitative ingredient declarations where we have had to put the percentage of the key ingredients on the packs for consumers. Now, we were hoping to have most of the products actually labelled with quantitative ingredient declarations by the summer and yet we are still waiting for a definition from the EU as to what meat is because each country in the EU has a different definition as to what part of an animal can be used. Now, until we get that definition, we cannot actually comply and yet we are being pushed to comply now, so you can see the sort of debate there that is going on. We have the XAP system for beef exports which actually now requires substantial veterinary supervision of plants. We understand why, but simply what that has done is it has actually made the export of beef products, using foreign beef, unviable and this loses to us the continuity of contacts needed for when we can sell British beef. We have had the situation with the licensing of butchers which was introduced for good reasons after the E-coli food scares, but initially it was going to cover all food retailers who handled fresh meat and it did not consider originally the fact that many people actually handled meat already packaged. Here there is no risk of cross-contamination, so we have had again to lobby very quickly to get that regulation changed actually to make sense. Those are just a few examples of the sort of things where unfortunately, as a retailer, you cannot just sit back and let things happen and hope the regulations come out right. You have to take a proactive role and unless you have the resources to do that, you cannot get involved, so the smaller retailers and the smaller manufacturers get left behind and unfortunately they do suffer greatly through EU regulations. So it is important to get everybody involved early enough to get the discussions going and make sure that the decisions that come out within the regulations have been thought through in practice.

  187.  What about the wider international level? Is there going to be a growing problem of importing products from third countries and not having the slightest idea as to whether they contain GM ingredients or not?

  A.  Absolutely. This is the whole problem with biotechnology and the way it is going. Everyone has talked about soya greatly and soya, to be fair to the biotech industry and Monsanto, has been looked at under the microscope, so you can be sure that soya in its present state will be safe. The difficulty is going to be that very quickly you are going to have thousands of complications of changes to plants and animals in Europe and in America, never mind in Third World countries. Unless the regulatory system can guarantee that any imports are controlled, then, as a retailer, there is no way that we will be able to keep up. This is why we are saying that we have to rely on the advisory committees and we have to rely on the Government and they have to be the people who control the monitoring, surveillance, like they do with pesticides, to make sure that these products are safe and sound for us to be able to use. We, as retailers, should not have to be going into doing research into supply chains; it is a nonsense. We should be selling food from manufacturers knowing that it is already safe, acceptable and correctly labelled and that should be the same for them buying from the agricultural sector or when they import products. This is one of the reasons why biotechnology, we do believe, will provide benefits and it is coming, but it has to be controlled and everybody has to know now the significance of what is going to happen in the future. It is very, very difficult.

Chairman]  Thank you very much. I think that brings us to the end of the questions we have and we are very grateful to you, Mr Wadsworth, for having come and helped us on this enquiry by putting the unique point of view of your company within the retail trade on this subject, which is extremely valuable. Thank you very much indeed.

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