25 May Food for thought – would Brexit mean fewer rules for private brand retailers?
As we get closer to the EU referendum on 23rd June, here at S4RB thoughts naturally turn to look at the consequences of new and pending EU legislation for our UK-based retail customers.
In the UK, we are increasingly used to European-driven legislation. When we look for examples in the retail sector, many of these laws end up having a big impact on the workload of private brand retailers and the suppliers responsible for the products that bear their name.
Food labelling gets an overhaul
2014’s Food Information Regulation No 1169/2011 – or FIR for short – was one of the biggest changes in food labelling in a generation.
In December 2016, FIR moves to the next stage which requires mandatory nutrition declaration on most pre-packed food. Retailers will be working towards updating their own brand packaging now – if they haven’t already – so that the labelling complies with the regulation by the deadline. This will be a challenge and is something that my colleague David will be writing about in due course (keep an eye on our blogs for more on this).
Substances must be weighed and registered
Another significant piece of EU regulation that is likely to have a similar impact to FIR is REACH: Registration, Evaluation, Authorisation & restriction of CHemicals. REACH came into force in June 2007 and applies to substances manufactured or imported into the EU in quantities of greater than 1 tonne or are listed as a Substance of Very High Concern (SVHC). The deadline for compliance for the next phase of REACH is 31st May 2018. The challenge is, to ensure compliance in 2018, retailers need to be acting now to risk assess the impact. This is a complicated topic to get to grips with and one which we will also be writing about in more detail in due course.
What’s in the packaging?
Yet another thing on the EU’s hit list is BPAs in food packaging. It’s likely that as a result of the European Food Safety Authority’s review into BPAs, the amounts allowed within food packaging will be significantly decreased, making the use of BPA in these products highly impractical.
To find out what the impact of this would be, retailers need to understand if the packaging of the products they sell contains BPAs. This includes items like coatings or varnishes inside tins or bottle caps. If BPAs are used, suppliers will need to source new BPA-free packaging items.
Even dried fruit doesn’t escape notice
In January 2016, the European Commission passed legislation that will significantly reduce the amount of Chlorpyrifos – a pesticide used most commonly on corn, almonds and fruit trees – due to its toxicity.
The new maximum residue levels that come into force in August 2016 are so low that any measurable trace of this pesticide within products will be against the law.
Retailers need to understand if their suppliers use any ingredients or raw materials that contain traces of Chlorpyrifos. If so, these products will need to source new raw ingredients.
It could also see many long-life products, such as fruit cake (are we on the verge of a Christmas pudding shortage??), produced before the deadline containing fruit treated with this pesticide unsellable and could cause some suppliers significant financial difficulties as a result. A motion has been raised to delay the legislation’s implementation for this very reason, but it could go either way.
The change in limits for the presence of Chlorpyrifos is predicted to be the first of many pesticides where the minimum threshold is revised down. Whether you feel this EU influence is a bad thing or a good thing (although I would imagine most consumers would prefer not to east pesticides) there is no doubt that EU legislation has had a major impact on industry, and few more so than the food industry.
Increased transparency for consumers
What’s clear is that from a consumer’s perspective, through changes to labelling we are gaining increasing transparency about the contents and the manufacturing processes of the items that we buy. Concerns about chemicals such as BPAs are also being addressed. These changes are certainly pushed forward by EU legislation.
What we don’t know is whether Brexit would lead to less legislation of this kind or a more complex landscape with less homogenous UK and EU legislation both existing alongside one another. Either way, in the spirit of giving consumers what they want, we champion the movement for retailers to be proactive and listen to customers’ concerns, wants and needs and address them.
There’s a competitive edge to be had in acting on the changing demands of the customer.
Suppliers hold the key to compliance
What we do know is that retailers need to work together with their suppliers to get a handle on the legislation that comes their way. It’s the suppliers that can provide the necessary information to assess the level of impact that these changes will have on the wide variety of private brand products that they produce. Without collaboration with their supply base, retailers will find it nigh on impossible to find out what they need to know in the time they need to know it by. And for much of the above legislation, non-compliance is not a situation that retailers want to be in.