Select Committee on European Communities Minutes of Evidence

Memorandum by Safeway Stores plc


  1. Safeway is a major UK retailer with over 450 stores in the UK and an own-brand product portfolio numbering over 12,000 products. In 1997 the business achieved group sales of £7.5 billion, with the Safeway brand accounting for over 40 per cent of products sold. It employs over 76,000 people in the UK, with a significant central technical resource whose sole responsibility is the management of all technical aspects of the Safeway brand. The development of new and innovative products and services is core to the competitiveness of Safeway, and is in direct response to consumer demand. Safeways' investment in a dedicated Research and Development Team to research new products and processes and develop main Board-approved corporate policy has benefits not only for the company, but for the seven million customers who choose to shop at Safeway every week.


  2. In February 1996, and in conjunction with Sainbury's, Safeway became the first UK Food retailer to successfully launch a genetically modified (GM) whole food product in the form of Safeway puree produced from genetically modified tomatoes. Safeway has since sold over 600,000 cans of the product, with the genetically modified version outselling its conventional counterpart in some stores. Key elements of the products success have been choice, customer benefit and information. The benefits obtained through genetic modification in harvesting flexibility and reduced wastage during transport and processing were translated into direct consumer benefit by offering the 170g tin of the GM puree at the same price as a 142g tin of puree produced from conventional tomatoes. Customer choice was maintained by ensuring that in all stores the genetically modified puree was sold alongside its conventional counterpart, with information provided through clear product labels, shelf edge barker tickets and customer Help and Advice leaflets (Appendix 1). A trained customer services careline answered any further questions customers had.


  3. Genetically modified foods are currently in the early stages of development and introduction to the marketplace. Safeway will consider the sale of foods (or foods containing ingredients), arising from the application of genetic modification, provided they have approval from the appropriate regulatory authorities and they benefit the consumer and/or the environment. Safeway views the development of GM products with direct consumer benefit as a positive step in building consumer familiarity and understanding. Current consumer confusion over genetically modified foods may be a result of the technology being applied in products which are traditionally transparent and unfamiliar to consumers such as soya. There is often confusion over what is possible using genetic modification, and which products are in development or have actually been commercialized. In this respect Safeway is absolutely clear, and can state that it has no plans to sell genetically modified foods containing genes of animal or human origin.

  4. Safeway is firmly committed to working with its suppliers and stakeholder groups to develop sustainable farming systems which conserve and enhance the environment, whilst allowing the economic production of safe and wholesome food. In this respect we are encouraging the adoption of Integrated Crop Management (ICM) techniques through our support of initiatives such as the Assured Produce Scheme in the UK, and through chairing EUREP, a pan-European retail group which seeks to develop similar systems for overseas production. Safeway believes that biotechnology may have a significant role to play in providing farmers with the resources they require to continue to produce safe and wholesome food with minimal impact on the environment. In addition, genetically modified crops with traits such as drought tolerance or disease resistance may open new opportunities for overseas producers to satisfy not only internal demand, but earn valuable export revenue. Significant opportunities also exist in the development of "industrial crops" to produce raw materials normally derived from industrial synthetic processes. Such crops could both lower production costs and benefit the environment by producing products that are more closely tailored to the needs of industry without the need for further processing. It could therefore be considered important that subject to careful review, approval and control, European producers and associated industry should have free access to the benefits arising from genetic modification as an important component of their future resource base for crop production and management.

  5. The introduction of genetically modified commodity crops, such as soya without segregation, has compromised consumers' rights to choose. In addition, the co-mingling of conventional and genetically modified commodity crops has run contrary to our strategy of controlling product quality and assuring product safety by developing systems for traceability. Safeway in conjunction with other UK retailers has lobbied US agribusiness on the importance of segregation, and continues to work with everyone in the supply chain to address the issue of choice on behalf of our customers. Recent work in conjunction with suppliers has resulted in the increased availability of small quantities of segregated "identity-preserved" conventional soya and soya ingredients. Certain suppliers are using these in the manufacture of some Safeway brand products to address the issue of consumer choice. Our customer Help and Advice leaflet (Appendix 2) covering GM commodity crops has been available in all stores since 1997.


  6. The UK is generally acknowledged as having led the way in Europe in developing an objective and rigorous process for the regulation of genetically modified crops through the Advisory Committee on Releases into the Environment (ACRE), and the review and approval of genetically modified foods through the advisory Committee on Novel Foods and Processes (ACNFP). This view is supported by the large number of submissions received by the ACNFP in particular for review by organisations wishing to place the products of genetic modification on the market under the current EU review procedures.

  7. Safeway has however been concerned by protracted negotiations over the regulations governing the labelling of genetically modified foods and food ingredients. The importance of clear, concise and consistent labelling in building consumer confidence should not be underestimated. The delay in agreeing pan-European regulations on labelling has only served to fuel consumer concerns over the use of genetically modified ingredients and increase the chance of market fragmentation, as individual EC member states formulate their own guidelines on labelling, and manufacturers and retailers seek to position themselves to minimize business risk in the resultant regulatory vacuum. In such a climate there is a greater chance of views being formed in the absence of objective fact, with the result that businesses act to remove genetically modified foods and ingredients from their products. To help bring increased objectivity to this area, Safeway would welcome a fresh and open public debate on the role of genetic modification in agriculture and food. Against this background, UK retailers and manufacturers have worked together over the past two years through the Institute of Grocery Distribution to develop voluntary guidelines on the labelling of genetically modified foods and ingredients. These were activated in January when UK retailers and manufacturers started to label their products on a voluntary basis, and in the absence of an agreed EC regulation. However, in spite of the recent agreement reached on labelling at European level, certain specific points on the labelling of key ingredients remain to be clarified. This piecemeal approach to regulation remains a concern to retailers and the wider industry, and only serves to breed confusion and uncertainty for smaller businesses which lack the resource of larger organisations to see the way ahead. In helping to develop consumer understanding of the new labels which are appearing on products, Safeway is issuing a further Help and Advice leaflet (Appendix 3) which will shortly appear in all Safeway stores at the customer services desk.

  8. The effect of European regulatory process lagging that of the USA is starting to impact on industry at a number of different levels. In a market where commodities for use in food manufacture are traded on an international basis, this has the potential to cause problems for EU importers and US exporters. For retailers and manufacturers, significant effort is being expended on managing the issue, where the same resource would be better employed developing quality systems for traceability and segregation.

  9. Safeway strongly supports efforts by the UK regulators to investigate the potential for post-release monitoring of genetically modified crops in the environment and in the food chain. We view this as an important component of the regulatory system, providing valuable feedback on the performance of genetically modified crops in the field.


  10. Recent indecision and protracted debate over regulation is likely to have a lasting adverse impact on the future acceptance and market uptake of genetically modified crops. Long-term business strategy is continuing to be moulded by current market uncertainty and consumer confusion over genetically modified foods. Until recently, the lack of a coherent and agreed regulation has sent mixed signals to companies looking to invest in this area. In parallel, many companies are unlikely to risk their businesses by embracing a technology where regulation is evolving piecemeal and public understanding and acceptance patchy. What is clear is that the Food Standards Agency has an opportunity to increase transparency and bolster confidence in the regulatory process. Safeway has already provided written comment of the role of the Food Standards Agency, and would welcome any attempt to increase and develop these principles further.

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