Food & Agri Update - 26 August

Looking back over last weeks of summer and first month and a bit of new Labour government we provide a broad round up of recent developments that may be most of interest to the food and agri sector:

Competition and Markets Authority (CMA)

1. Infant formula market study update

Under advertising rules, retailers and manufacturers are prevented from promoting price cuts on formula lines, or from including the products in special promotions

In February, the CMA started a market study of the sector after its own report found baby formula prices had risen by 25% over a two-year period. The update issued on 16 August outlined its initial findings.

While the regulator identified that the market structure could be creating “poor market outcomes” for consumers, it stopped short of launching a formal market investigation. Instead, it said it would continue with its market study, and was working with the Westminster and devolved UK governments with a view to publishing recommendations in October.

2. Loyalty Cards for Retailers

In July, the CMA concluded its investigation into loyalty cards and concluded it did not identify widespread evidence of loyalty promotions that mislead shoppers.  However, it had unearthed some practices that were stated would be subject to further investigation and was now asking shoppers for their views.

3. Draft consumer law compliance advice for trader recommendation platforms

The consultation Improving Trader Recommendation Platforms:: consultation document (publishing.service.gov.uk) requests feedback on the scope of the draft compliance advice to help these businesses to understand and comply with their obligations under consumer protection law. The deadline for responses is 16 August 2024.

Trader recommendation platforms are businesses that:

• operate a website or app that consumers may use to find a trader to carry out home improvement, maintenance, or repair work; and
• make representations that the traders listed or hosted on these sites are of a particular quality.

The Digital Markets, Competition and Consumer Act (DMCCA) will be in force in the autumn 2024 and this appears to have been drafted in anticipation of it being in place.  Although the CMA will be publishing further guidance to explain the new DMCCA provisions.

Defra update

1. Extended Producer Responsibility (EPR) Fees

Businesses will not have to pay any EPR packaging fees in 2024. However, they are obliged to  report packaging data for 2023, and will be required to pay any related fees in 2025 based on 2024 data.

Businesses need to collect and report packaging data for a given year if all the following apply:   

• you’re an individual business, subsidiary or group (but not a charity)   
• you have an annual turnover of £1 million or more, based on your most recent annual accounts up to 7 April   
• you were responsible for importing or supplying more than 25 tonnes of packaging to the UK market in the previous calendar year  
• you carry out any of the packaging activities 
  Extended producer responsibility for packaging: who is affected and what to do - GOV.UK (www.gov.uk)

The government has published draft expected costs for food and drink companies subject to its extended producer responsibility (EPR) scheme.  Defra released a list of estimate fees for each of the eight packaging categories based on data supplied by producers.

Defra has been warned about increasing costs on business and that this may well be passed on to consumers. In particular the cost of glass.  The Grocer has reported the British Beer & Pub Association (BBPA) claiming the charges could add up to 7p on all of the 3.2 billion bottles of beer sold each year in the UK.

Defra has stressed that the fees published for the industry are its initial estimates and are likely to change, with another updated set of figures due to come out in September.

2. Defra reveals no plans by Labour to ‘fast-track’ DRS

The UK government and devolved administrations in Scotland, Wales and Northern Ireland have confirmed that Deposit Return Schemes will be launched across the UK in October 2027. Hospitality will no longer be required to act as a return point, but venues can voluntarily host a return point.   The size of containers within scope of DRS (across all UK nations) will be 150ml to 3L. Any containers outside of this range will be in scope of the Extended Producer Responsibility for packaging.  Deposit Return Schemes in England, Scotland and Northern Ireland will include containers made of PET, steel and aluminium cans. Wales will additionally include glass.

Defra confirmed Labour was not seeking to bring forward the date, before the last government’s delayed October 2027 deadline but said it was determined to go ahead in line with the schedule set out previously

3. Environment and Clean Up

The Environment Agency has published its annual Environmental Performance Assessment (EPA) report  of the environmental performance of England’s nine water and sewerage companies during 2023.  The announcement coincides with the publication of the Environmental Improvement Plan Annual Progress Report, which highlights the need for accelerated action to reverse declines in nature.

The new Labour government has stated it will develop delivery plans to meet each of its Environment Act targets, focusing on cleaning up waterways, reducing waste, planting more trees, improving air quality and halting the decline in species by 2030.

Clean Waters & Water (Special Measures) Bill

Reports have indicated a planned protest on water pollution, the ‘March for Clean Water'.

The Secretary of State for Environment Food and Rural Affairs Steve Reed has highlighted cleaning waterways as a key Defra priority Labour sets out its 5 Priorities for the Environment, Food & Rural Affairs - Mills & Reeve (mills-reeve.com).

A series of steps announced included:

• Ringfencing investment so it can only be spent on upgrades to infrastructure benefiting customers and the environment - and never diverted for bonuses, dividends or salary increases.
• Doubling compensation for households and businesses when their water services are affected.
• Consumers gaining new powers to hold water company bosses to account through powerful new customer panels.

On 17 July, the new Water (Special Measures) Bill was announced, with the intention of this becoming law by the end of this year. This legislation will give the water regulator new powers to ban the payment of bonuses if environmental standards are not met and ensure directors face personal criminal liability for non-compliances.  It will also introduce new powers for regulators to bring automatic and severe fines for wrongdoing and require real-time monitors to be installed at every sewage outlet.

Food Standards Agency (FSA) publishes final report on School Food Standards compliance pilot; England specific

The Food Standards Agency (FSA) has published the final report on a pilot aimed at monitoring implementation of School Food Standards.  This report is available in the research section of the FSA website.

The pilot showed there could be inconsistencies in applying the checks, for example, when applying definitions of particular foods such as ‘meat products’. Issues were also raised about communication between local authorities, schools and caterers, particularly when trying to address potential non-compliance with the standards. 

Recommendations included creating a standardised follow-up process following instances of potential non-compliance. This would not prescribe exactly how follow-up should happen locally, but provide the kind of outcomes that should be targeted. This could leave some flexibility to adapt local approachs to match existing models and structures.

Cage Free Eggs in Retailers January 2025

Concerns are growing within the egg sector that many supermarkets will fail to hit the voluntary 2025 deadline to eradicate cages from supply chains. 

Free-range makes up the vast majority of UK egg supply, however, industry data shows national caged bird flock volumes have remained consistent at about the 7.5 million mark over the past couple of years, with the majority of these eggs still entering retail.

EU

QUALITY SCHEMES – Consultation: Protecting geographical indications for wine, spirit drinks and agricultural products – delegated rules  Protecting geographical indications for wine, spirit drinks and agricultural products.

The Commission aims to adopt technical rules on geographical indications in the AGRI sector (wine, spirits and agricultural products). The purpose of this initiative is to adapt the rules (delegated and implementing rules on geographical indications) to the new regulation on geographical indications. This is intended to supplement Regulation (EU) 2024/1143 with the rules concerning the procedures for Union amendments, approval and communication of standard and temporary amendments and requirements for sourcing of raw materials for geographical indications of agricultural products, as well as the procedures for application for registration and for approval of amendments for traditional specialities guaranteed. Commission Delegated Regulation (EU) 664/2014 shall be repealed.

This is one of 4 consultations which result from the new framework for the control of geographical indications. All consultations closes on 9 September 2024.

For the other 3 consultations, see the Commission pages:

• Protecting geographical indications in the wine sector – deletion of certain rules
• Protection of geographical indications (GIs) in the spirit drinks sector – deletion of certain rules
• Protecting geographical indications for wine, spirit drinks and agricultural products – implementing rules

Food Fraud – Olive Oil

Olive oil crime has been on the rise as record prices for the cooking staple over the past couple of years have made it even more lucrative for fraudsters to sell fake extra virgin olive oil.

18,000 litres of fake olive oil were seized in Portugal last week.  The Portuguese Food & Economic Security Authority seized over €57,000 (£48,000) worth of cooking oil, along with 177,690 labels mentioning olive oil.

It follows a major operation by the Italian carabinieri where police seized a total 42 tonnes of faux extra virgin olive oil worth €900,000.

Europol warned last year that “a mix of various factors, such as the general inflation of prices, reduced olive oil production and increasing demand, have created the perfect breeding ground for fraudulent producers”.

EU Report on Fighting Fraud

Overview report - Fighting fraudulent practices in the agri-food chain 2024-Commission-Audit-Review-food-fraud.pdf (reading.ac.uk)

JRC Report: Fighting fraudulent and deceptive practices in the agri-food chain  2024-JRC-Food-fraud.pdf (reading.ac.uk)

M&R Food Fraud Updates

Please also see our own M&R recommendations: 5 Steps to protect your food supply chain from fraud - Mills & Reeve (mills-reeve.com) and Latest legal publications | Mills & Reeve | Mills & Reeve (mills-reeve.com) Also, access to NCU's tools ‘Food Fraud Resilience’ self-assessment tool - Mills & Reeve (mills-reeve.com)

UK

ENFORCEMENT - CIEH

In light of the steady rise of foodborne illnesses over the past two years, and the BBC’s recent findings connecting this to the delays in local authority food hygiene inspections, the Chartered Institute of Environmental Health [CIEH] has issued a statement in response, highlighting the workforce challenges facing the environmental health profession.

CIEH are calling upon the Labour government to prioritise additional funding for local authorities’ environmental health teams and provide sufficient ringfenced funding for apprentices and trainees to help ensure the UK has a sustainable profession that can adequately protect public health.

Food Safety & Recall

Tesco recalls Tesco Plant Chef 2 Meat-Free Burgers with Melting Middle because of a potential burn risk from the melting middle: 16 August 2024 Tesco recalls Tesco Plant Chef 2 Meat-Free Burgers with Melting Middle because of a potential burn risk from the melting middle | Food Standards Agency

Tesco are taking the precautionary step of recalling Tesco Plant Chef 2 Meat-Free Burgers with Melting Middle because the centre of the burgers may maintain a high temperature once cooked. This may result in a burn risk to customers.

This recall is of particular interest as it relates to consumer interaction and how the food is recommended to be prepared.

Food Safety Prosecution

FSA’s National Food Crime Unit investigation results in a £50,000 fine for food business which faked disease certificates July 2024

A food business owner has been fined following a prosecution by the Food Standards Agency (FSA). An investigation by the FSA’s National Food Crime Unit, working with Heart of the South West Trading Standards, found evidence he had falsified Salmonella testing certificates.

The FSA, working with partners including Avon and Somerset police, Environmental Health and Trading Standards, executed a search warrant at the poultry farm and abattoir in November 2023 and found evidence of traceability concerns and that the farmer had falsified Salmonella testing certificates.  This meant  birds had been slaughtered for the food chain without proof they were free from disease.

The poultry farmer received the fine after pleading guilty to various offences under The Food Safety and Hygiene (England) Regulations 2013 and the Animal Health Act 1981.

Health and Safety

£360,000 fine for finger amputation at food company

A multi-national food company has been fined more than £300,000 after one of its workers lost four fingers on his right hand while unblocking a machine at a site in Glasgow.

Kerry Ingredients (UK) Limited received the fine following an incident at its factory in Hillington on 4 August 2021. The 39-year-old man was working on a mixer at the site, where dry seasoning blends and mixes are manufactured for the food industry.

During the mixing process the machine began to develop a blockage, which the worker attempted to clear by inserting his right hand into the machine. However, as he did so, it came into contact with the rotating blades which resulted in the amputation of four of his fingers.

An investigation by the Health and Safety Executive (HSE) established that there were no fixed guards preventing access to the blades from the underside. It also found there were not any interlocked guards which would stop the rotating parts if any component on the underside of the mixer were to be removed.

Kerry Ingredients (UK) Limited of Bradley Road, Bristol pleaded guilty on 26 July 2024 to a contravention of The Provision and Use of Work Equipment Regulations 1988, Regulations 11(1) and (2) and the Health and Safety at Work etc. Act 1974, Section 33(1)(c). At a further hearing on 8 August 2024, the company was fined £360,000.

ASA cases update

Provision of all material information where using an influencer or ambassador – if they have a proprietorial or senior interest in the company this is considered material information for the consumer if the ad could be perceived as a testimonial – x2 nutritiona brands and Steven Bartlett When is #ad not sufficient to provide all relevant information of a commercial transaction? - Mills & Reeve (mills-reeve.com)

HFSS advertising by Just Eat – all age-tracking facilities to be used in order to establish compliance with ads not targeting under 16s. What constitutes reasonable steps for age-targeting in HFSS adverts? - Mills & Reeve (mills-reeve.com)