Food & Agri Update – Friday 23 June

Government taken to court over National Food Strategy climate impact

Environmental activists have been granted permission to judicially review government decisions over over its alleged failure to tackle carbon emissions from the meat and dairy sector.  This was the third time lucky for the activists whereby the UK’s Court of Appeal upheld public interest argument in the position taken by campaigners that ministers broke the law by failing to set out measures to reduce consumption of meat and dairy in England as part of the National Food Strategy published last year.

The activists will challenge the legality of Government strategy, and whether it was in line with the Climate Change Act 2008 – which compels ministers to put in place policies to ensure carbon targets are met.

“We have decided to grant permission to apply for judicial review, having in mind that the case does raise questions of considerable general importance,” said Lord Justice Lindblom, who led the panel of judges.  He said the full judicial review hearing would allow both sides to argue their cases.

The government has previously said Defra was not bound by the obligations set out in the Climate Change Act 2008 when devising its food strategy.

If the campaigners’ legal challenge proves successful, it could force the government to redraft the food strategy to include some of Henry Dimbleby and the Food Strategy’s more controversial policy proposals, including a 30% reduction in meat consumption over the next decade.

The case follows another successful judicial review application, in which a judge ruled in July that the government’s plan to reach net zero emissions was unlawful because it provided insufficient detail for how the target would be met.

The government has three weeks to submit a summary of its response to the judicial review claim.

Defra update to Sustainable Farming Incentive (SFI)

The new and improved Sustainable Farming Incentive (SFI) 2023 will start accepting applications in a controlled rollout from August, the government has confirmed this week, offering farmers additional actions and more flexibility to choose the actions they want to get paid for.

Farmers will get paid for taking actions that support food production and improve farm productivity and resilience, while also protecting and improving the environment. Additional actions under SFI 2023 will help ensure there is an offer that is attractive and workable for all types of farms.

The 23 actions on offer cover existing themes including soil health and moorland, as well as new actions on hedgerows, integrated pest management, nutrient management, farmland wildlife, buffer strips, and low input grassland.

Sustainable Farming Incentive 2023: Expanded offer to roll out from August - GOV.UK (www.gov.uk) 

The range of actions mean farmers could be paid from £10 per 100m for managing one side of a hedgerow (plus a further £10 per 100m to maintain or establish hedgerow trees); £129 per hectare for multi-species cover crops; or £589 for a nutrient management review.

The government has also confirmed the SFI management payment will be applied to all land-based SFI actions, including moorland, and has updated the payment rate for low input grassland action to make the rates the same for upland and lowland areas.

For tenant farmers, along with other improvements made in response to Baroness Rock’s review, there are shorter agreement lengths that do not require landlord consent. The SFI 2023 offer makes a range of actions and payments more accessible to those on short-term agreements, and includes a range of new actions not previously available in schemes.

The National Farmers union welcomed the update to the SFI, with its vice president David Exwood encouraged by its “improved, broader and more flexible”.

BOGOF postponed to 2025

The Food (Promotion and Placement) (England) Regulations 2021 restriction of certain HFSS products by location came into force on 1 October 2022. The restriction of certain HFSS products by volume price ie ‘BOGOF’ Buy One Get One Free Deals was postponed and was scheduled to come into force in October this year.

The speculation reported last week this may be postponed again was found to be well founded this week as the government delayed the introduction again. It is now confirmed this will be delayed for another two years until October 2025. PM backs public's right to choose with delay to BOGOF restrictions - GOV.UK (www.gov.uk)

Opponents to the ban point to the Department for Health’s own assessment, which says banning the promotional deals will only reduce daily intake by a maximum of four calories – the equivalent of a single grape – while households could miss out on an annual £634 saving (as estimated by Public Health England in 2015, they concluded it could cost households £634 a year and that consumers use these offers as a ‘coping mechanism’ during periods of high inflation.)

2023 FSA Board Meeting

The June 2023 FSA Board meeting took place on 21 June, chaired by the FSA’s chair, Professor Susan Jebb.

The agenda for the meeting included:

  • Import Controls and the Target Operating Model (TOM)
  • Annual Chief Scientific Adviser's (CSA) Report
  • Foresight Function and Horizon Scanning
  • Update on Veterinary Supply, Modernisation and Support for the Small Abattoir Sector
  • Retained EU Law (REUL)

New System for Regulated Food & Feed Products

The Food Standards Agency (FSA) and Food Standards Scotland (FSS) launched a new system this week for businesses to make applications for Regulated Products Apply for a regulated product authorisation - Food Standards Agency. These are certain types of food and feed ingredients that require authorisation before they can be sold in the UK Regulated Products | Food Standards Agency.

The new, more efficient system will help businesses follow the correct procedure when it comes to securing the necessary authorisation to sell regulated food and feed products. It is designed to make it easier for applicants to understand what information is required to submit a good-quality, complete application for their product and will be particularly helpful for new businesses and those that don’t traditionally recognise themselves as food or feed businesses, like start-ups. 

Applicants will be provided with a checklist of what is required, will be allowed more time for the application and supporting material to be uploaded and completed, and will be able to see the progress of their application. Applicants will also receive regular updates, which they can respond to. Additionally, the system will support renewals but will not affect applications already in progress on the previous system.

Beyond the continuous improvement plans for the current system, the FSA is also actively pursuing a much wider programme of reform in line with UK Government priorities. This includes exploring ways in which they can streamline the regulatory process and the FSA is developing a new regulatory framework for Precision Bred food and feed. This dovetails with the Deloitte report published last week on the review of the novel foods regulatory framework.

Competition and Collaboration – New EU Guidance published with look at sustainability

To what extent can competitors collaborate without falling foul of the competition rules? The European Commission has recently published updated (and welcome) guidance which aims to give clarity on a variety of business practices, ranging from bidding consortia to joint purchasing. The guidelines also contain an updated chapter on the thorny issue of information exchange between competitors, a topic that can be difficult for businesses to navigate in practice.

The new guidelines provide guidance in the following key areas, including:

  • Information exchange
  • Joint purchasing agreements
  • Bidding consortia
  • Agreements between parent companies and their joint ventures (“JVs”)

The guidelines will formally apply once published in the Official Journal of the EU.

An initial review of the guidance is provided here Latest legal publications | Mills & Reeve | Mills & Reeve (mills-reeve.com).

The revised guidelines on horizontal cooperation (Guidelines) also include a specific chapter on sustainability agreements, helping businesses to better assess the compatibility of their cooperation agreements with EU competition rules, where such agreements genuinely pursue (broadly defined) sustainability initiatives. The sustainability chapter remains largely unchanged from the draft revised guidelines published on 1 March 2022. 

In the UK there have been similar advice from the Competition and Markets Authority (CMA) with the publication of its draft guidance on the application of UK competition law to sustainability agreements. 

Grocery Code Adjudicator Survey Results Published - 91% of suppliers asked for a cost price increase

The survey results, published by the GCA highlight the impact that inflation has had on suppliers and their relationships with Retailers.

91% of suppliers asked for a cost price increase (CPI) in the past 12 months

It is the most raised issue in the last 6 years.

The GCA Mark White has stated he believes ‘prices will continue to rise for some time.’

It is also stated by GCA Mark White ‘As prices start to fall in some limited areas, I will also be looking at Retailers’ requests for cost price decreases and want to hear from suppliers who have concerns about the fairness of Retailer processes.’

Other key issues raised by the survey: 

  • One quarter (up by 7% on 2022) of suppliers experienced inadequate processes and procedures in place to enable invoice discrepancies to be resolved quickly.
  • 16% of suppliers said they had experienced data input errors including price errors not resolved promptly (within 7 days), increasing from 10% in 2022.

Other issues were also raised including delays in payment, obligations to contribute to marketing costs and issues related to forecasting all of which saw an increase in the number of suppliers impacted. The results pack includes a breakdown of all the issues raised.

M&S was the retailer who came top of the rankings this year with 99% Code compliance; the highest score ever received; with Iceland the most improved Retailer with a 6% increase in their score.

The first time entry into the survey and Amazon reportedly scored 59%.

The annual GCA conference will take place on 28 September 2023.

ASA Rulings – use of appropriate substantiation for claims

John Mills Ltd t/a JML Direct   Upheld  Television  21 June 2023

A TV ad for a draught seal misleadingly exaggerated the efficacy of the product.

Two complainants challenged whether the ad misleadingly exaggerated the efficacy of Navy Seal Draught Shield Tape.

Although several studies were provided by JML Direct that showed draught exclusion, waterproof and adhesive nature it was found they did not substantiate the prevention of heat loss. The tape was described as an “insulating tape” and that it could “insulate your home and save money on your heating bills”.

Thermal imagery in testing used related to conditions that were significantly hotter than the average UK home, the ASA therefore found any resulting “after” imagery would not reflect the likely effect of the product as it was intended to be used by UK consumers.  Also test result thermal imagery used was different was different between the test results and the ads with no reference to cold spaces and an altered colour palette that may have appeared more dramatic than the reality of the temperature difference due to colour changes.

Finally, neither the methodology nor the temperature at which the tests took place were referenced within the study. Because of that, the ASA were unable to sufficiently analyse the conditions under which the test took place.

The ASA considered that test result thermal imagery did not match the imagery used it the ad, nor did it sufficiently substantiate that the tape prevented heat loss across the whole doorframe as indicated by the ad. The second set of images was reflective of the way in which the tape was used in the United States, where the ASA understood that the tape was used to keep homes cooler, rather than warmer. As such, the “before” image radiated a red colour and the “after” image radiated a blue and green colour. The ASA noted that the second set of before and after images matched those used in the ad but that the “before” and “after” images had been swapped to reflect the U.K. consumer’s use of the tape.

The ASA considered that it was misleading to use that imagery within the ad to portray the tape’s ability to prevent heat loss because the temperature demonstrated by the image had not been achieved by application of the tape. The ASA further considered that, because the image was taken at a high temperature, and subsequently used to depict the ability of the tape to retain heat, that it misleadingly exaggerated the level of heat that could feasibly be retained by using the product.

This underlines the importance that any substantiation accurately reflects the likely conditions of use of the product and the claims being made about it.

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