Collaboration & Conflict in the Food Supply Chain

The Westminster Food and Nutrition Forum policy conference this week looked at the entirety of the food supply chain from producers through to processors and suppliers, to retailers and restaurants and finally consumers, with expert speakers from every section of the supply chain.

In this time of rapid flux within the business and unprecedented demand in specific vectors there were key catchwords that ran throughout the seminar.

Grocery Code Adjudicator, Christine Tacon, emphasised the power of 'collaboration over conflict' in acting proactively to improve trading relationships.

This has again been emphasised with the GCA stressing this month the necessity for effective communication within the supply chain, prioritising the most pressing objectives and a review of what might be considered ‘reasonable’ for notice periods. Also a letter to retailers’ Chief Compliance Officers, published this week, referenced the need to potentially shorten payment term periods to support suppliers.

The future regulatory landscape was then considered; underlying this for consumers, regulators and the market/commercial relationships as a whole was the theme of ‘trustworthiness’.  Dr Anna Macready, lecturer of consumer behaviours and marketing at the University of Reading, said this 'trust' is what helps underpin consumer demands and the value added element to food. The issue of potential regulatory alignment versus regulatory divergence was then examined by Jessica Burt, specialist food lawyer at Mills & Reeve; the transition period for Brexit continues until 31 December. If there were to be any delay to this date a decision would need to be made by 1^st July, the same date by which the EU has stated a decision on the fisheries policy needs to be decided.  Regulatory alignment ‘without representation’ would not be acceptable to the UK and equally, for the EU, regulatory divergence and free trade so close to the EU market would arguably undermine EU principles. A time of uncertainty but an opportunity for regulators to build trust by acting in the interests of consumers and producers.  Duncan Swift, partner and head at Moore UK, showed the ‘hourglass’ profile with the ‘pinch-point’ being where over 90% of food retail is controlled by a small amount of retailers. The current environment has shown the importance for retailers and regulators to restore the trust of consumers in their actions within the supply chain.

The tension between potential global Free Trade Agreements (FTAs) and the consumer and primary producer emphasis on standards was then examined by Katrina Walsh from the International Meat Trade Association and Sue Davies, strategic policy adviser at Which?.  Whilst economic objectives would support FTAs and the structure is in place for EU FTAs to be replicated for the UK the need to ensure a level playing field for producers and clear information for consumers is essential.  

The environmental targets for zero-net emissions by 2050 remain and these were examined by Professor David Barling, food policy and security at the University of Hertfordshire, James Elliott, Green Alliance and Dr Liz Goodwin, director at World Resources Institute and London Waste and Recycling Board. The issues of fairness and sustainability, country specific vs global targets, use of agricultural land and changing consumer preferences. However, also the enormous economic savings that were possible in reducing every £1 of waste within the supply chain

Finally, Anthea McIntyre, former MEP, shadow rapporteur, unfair trading practices in the food supply chain and member committee on agriculture and rural development, looked at the EU directive on Unfair Trading Practices; initially based on the UK’s Groceries Supply Code of Practice (GSCOP) it however applies to business to business transactions across the range of food supplies (in a graded way, up to businesses of a level Euro 350 million turnover). The directive contains new rules that ban for the first tie certain unfair trading practices imposed unilaterally by 1 trading partner on another.  Despite the UK’s decision to leave the EU this directive will still have a positive impact for UK producers, as the rules will apply to any 3^rd country exporting products into the EU. The directive was implemented 30 April 2019 there is then 24 months to implement within national EU regulations and a further 6 months for businesses to comply, therefore properly taking effect 1^st November 2021.

Whether or not these EU protections will need to be equally introduced throughout the UK food supply chain will depend on our current environment of trust and collaboration within the ongoing coronavirus crisis.

If assistance is needed in resolving negotiations within your own food supply chain specialists at Mills & Reeve can help; please contact Craig Hodgson, joint head of our food and agri team, on email: [email protected], Greg Gibson on [email protected], Richard Dawson-Gerrard on [email protected] or Jessica Burt on [email protected].