We came into 2022 recovering from the pandemic and a bruising time for hospitality however over the course of the year we have seen the war in the Ukraine impacting energy prices and supply chain, squeezes on labour meaning further shortages and a gathering momentum of inflation and cost of living, nowhere seen more keenly than in the food and agricultural sector.
A rocky political environment has not helped this and currently we are seeing strike action predominantly in the public sector.
In light of this what are the key issues and concerns for the food and agri sector?
We have seen the FSA consumer insight report highlighting consumers concern on the cost of living crisis and the steps taken involve buying less and buying cheaper.
Latest FSA consumer survey tracks level of concern around the price of food at Christmas and New Year | Food Standards Agency The latest data from November 2022 shows:
- Seven in ten (69%) consumers reported taking at least one action to save money on food for Christmas 2022, including buying ‘yellow-sticker’ food items close to their use-by date (25%); buying less fresh food and more long-life foods instead (17%); buying less food than usual for Christmas (23%); and changing to cheaper brands (33%)
- Concerns about food shopping for Christmas and New Year have significantly increased (compared with the same period last year 12-16 November 2021):
- 81% reported concern about food prices (was 62% in November 2021)
- 55% reported concern about food availability (was 48% in November 2021)
- 50% reported concern about the quality of food (was 37% in November 2021)
- 41% reported concern about the safety of food (was 31% in November 2021)
This is likely to continue to result in retailers and producers reducing SKUs and an increase in sales of basic value offerings plus reformulations to reduce costs.
Regulatory main developments and horizon gazing
On the regulatory front:
Obesity Strategy
Calories –
implement calories being displayed at the point of choice for the customer, such as physical menus, online menus, food delivery platforms and food labels under The Calorie Labelling (Out of Home Sector) (England) Regulations 2021 (legislation.gov.uk) from April this year. There are certain exemptions for particular foods and qualifying establishments. A more detailed summary update on this may be found here Mandatory calorie labelling for 'Point of Choice' in cafes, restaurants and takeaways - Mills & Reeve: Food Law (food-law-blog.co.uk)
Location and promotion regulations implementing restrictions on certain HFSS foods in October 2022.
Legislation and timescale is as follows:
The Food (Promotion and Placement) (England) Regulations 2021 (legislation.gov.uk)–
Location restrictions - There will be restrictions on certain foods High in Fat, Salt or Sugar (HFSS) being placed at key locations such as store entrances, aisle ends, checkouts (and their online equivalents). This will apply from 1 October 2022.
Next year - Volume restrictions ie buy 1 get 1 free, will be delayed by 1 year and will come into force October 2023.
Guidance has now been published and is available here Restricting promotions of products high in fat, sugar or salt by location and by volume price: implementation guidance - GOV.UK (www.gov.uk)
Health and Care Act 2022 (legislation.gov.uk) - There will be restrictions on what advertisements can be placed on the internet and on TV before 9pm across the UK from 1 January 2024. (This has been delayed for a year from 2023.)
What foods are covered?
Pre-packed foods that are determined to be HFSS or ‘less healthy’ as defined by the Department of Health’s Nutrient Profiling Model (NPM) . This provides for a calculation of a products nutrient profiling technical guidance 2011. Any foods that score four or more, and drinks with a score higher than one, are classed as HFSS. The The nutrient profiling technical guidance 2011 provides instructions on how to calculate the NPM score for different products. The restrictions will apply to products, not brands.
AND Included within the 13 categories of foods identified Listed in ‘Schedule 1’ of the Food (Promotion & Placement) (England) Regulations 2021: including breakfast cereals, savoury snacks, pizzas and ready meals.
Agritech
Investment in agritech and research is one of the few areas that have been promoted and the UK is seeking to distinguish itself from Europe particularly in this area and the new gene editing regulation will be expected to pass next year.
The UK government has indicated that a ‘new approach’ will be taken to novel foods. ‘We will use the freedom Brexit gives us to review our novel foods regulatory framework. This will include working with the Food Standards Agency to update the process for approving novel foods, to create a transparent and effective system that is the best in the world for innovators, investors and consumers and encourages safe innovation in the sustainable protein sector.’ The Benefits of Brexit: How the UK is taking advantage of leaving the EU (publishing.service.gov.uk)
We have already seen some divergence between the UK and EU in the approach taken to gene editing with the Genetic Technology (Precision Breeding) Bill - Parliamentary Bills - UK Parliament that is currently in the House of Lords. In the same way that innovation is supported with an emphasis on environmental benefits there is a real chance for the UK to promote strategic advantage in existing and novel technologies, including in cultured meat.
Additionally the Retained EU Law (Revocation and Reform) Bill - Parliamentary Bills - UK Parliament under which the vast majority of this retained law would fall away on 31 December 2023, unless specific measures are taken before then to preserve it, would similarly pave the way for a divergence from the EU strict processes of approval for cultured meat.
Challenges will be:
- Practical: the time and resources taken to pass any updated legislation and the resources needed to scrutiny processes outside of EFSA and the EU.
- Political: there may be consumer concerns that will not be allayed by the UK diverging from the EU approach. However there does appear to be a real political will to gain advantages from Brexit.
- Legal: the application and intersection of regulations concerning technical definitions of what constitutes meat, country of origin, added ingredients and certain ‘formed’ meat products.
Environmental and sustainability
Other main aspects highlighted in Consumer Insight Report published by FSA was environmental and sustainability concerns which remain prominent.
Specifically, in relation to Christmas and New Year, around half of consumers reported concerns about sustainability and the impact of food production on the environment (49%, November 2022) and the healthiness of food (47%, November 2022)
This will be particularly relevant where cost savings and environmental credentials can come together re energy savings and reductions in packaging.
Looking ahead to 2023 the key issues will be seeking efficiencies within the food chain and ensuring certainty and consistency in supply.
Sustainability
The Plastic Packaging Tax (“PPT“) came into force in the UK on 1 April 2022 and applies to plastic packaging that contains less than 30% recycled plastic content at a rate of £200 per metric tonne.
The tax is aimed at encouraging the use of more sustainable plastic packaging, increasing the use of recycled plastic and helping to reduce plastic waste.
The UK have stated their aim to achieve Net-Zero carbon emissions by 2050.
Part of this is the Extended Producer Responsibility for packaging. Extended Producer Responsibility (EPR) is new UK legislation that will replace the current Packaging Waste Regulations with a phased implementation from 2023. It is an environmental policy that requires producers to pay the full costs of dealing with the waste they produce from when it is placed onto the market, through to the end of its life. Packaging waste: prepare for extended producer responsibility - GOV.UK (www.gov.uk)
Key requirements for year ahead will be to take steps to record data about all the empty packaging and packaged goods you handle and supply through the UK market from 1 January 2023 and report data about empty packaging and packaged goods you handled or supplied through the UK market throughout 2023
On 22 December Defra launched an online Obligation Checker Tool Check if you need to report packaging data - GOV.UK (www.gov.uk) to help producers understand their obligations under the new system of Extended Producer Responsibility (EPR) for packaging and based on the turnover and tonnage handled thresholds set out in previous guidance. Packaging waste: prepare for extended producer responsibility - GOV.UK (www.gov.uk) The tool will provide information on data reporting obligations, waste disposal cost and recycling obligations as well as nation of sale reporting obligations. A demonstration of how to use the tool can be found here Check if you are obligated to report information on the packaging that you supply to the UK market. - YouTube.
Also, Deposit Return Scheme, DRS, UK Governments want to increase the recycling rate of drinks containers and reduce littering. Scotland will be the first of the UKs nations to go live with a Deposit Return Scheme which starts on the 16th August 2023. Feedback is awaited from recent government consultation for England , Wales and NI and a start date of late 2024 is anticipated.
Sustainability agenda shows scrutiny by the ASA on claims that can be made.
Checklist for making General Sustainability Claims
The Competition and Markets Authority (CMA) guidance for businesses making environmental claims lists six core principles:
- Be truthful and accurate.
- Be clear and unambiguous.
- Not omit or hide important information.
- Only make fair and meaningful comparisons.
- Consider the full life cycle of the product.
- Be substantiated.
Claims should not be presented in ways that are liable to confuse consumers or to give the impression that a product or business is better for the environment than it is.
Carbon Neutral
The use of low carbon or carbon neutral claims are becoming increasingly sought after by conscientious consumers.
It may therefore be helpful to examine the requirements for these sorts of claims.
The ASA sets out advice as follows Environmental claims: Carbon offsetting and carbon neutral - ASA | CAP
Country of Origin – We may therefore see this coming together in country of origin claims for the UK supporting British and local farmers, reducing carbon and shortening the supply chain for producers and retailers.
Food security
The NFU held an emergency press conference on 6 December on the countries’ food security. NFU President Minette Batters urged the UK government to set a target for the nation’s food security, with a statutory duty to report on domestic food levels.
NFU priority points:
- Defra to investigate whether an “exceptional market conditions” declaration should be made under the Agriculture Act 2020, given the severe disruption which egg producers and UK consumers are experiencing. These powers allow the Secretary of State to declare a period of exceptional market conditions and to give financial assistance to support farmers who have been affected. They also would enable the Secretary of State to use the additional public intervention and private storage aid powers in retained EU legislation.
- In early 2021 the government had stated it would regulate dairy contracts to ensure fairer terms – no action taken to date.
- Cap on seasonal worker scheme needs to be lifted for the fruit and veg industry - although Defra has recently published an increase for horticulture industry
- British food and farming needs to be a political priority. In particular: establishing a new food security target, including a statutory duty to monitor and report on domestic food production levels annually, to hold a UK-wide annual food security summit and introduce a new target for public sector organisations to buy 50% of their food locally.
- Agriculture and horticulture must be seen as a vulnerable sector in regard to energy security.
It is expected that these food security points will be highlighted into 2023.
Wishing you all a successful and prosperous 2023.