Food Regulation in a post BREXIT world

This weekend's news has been a bit like watching a car crash, I found myself  drawn to watching even though I knew I might not like what I saw. The carnage of the Labour party, shell shocked politicians apparently without a plan trying to reassure the market while Scotland explores leaving the EU (possibly taking Gibraltar with it, the Welsh are talking independence, the EU is saying leave quickly and several of the political parties appearing on the verge of implosion. 

As I type this, both the markets (here and abroad) and the pound are again significantly down.  Perhaps however they are not as far down as some thought, and when one gets out the charts of FTSE performance we can see that it is still above the level for earlier this year, so I guess there is some positive here, albeit panic and uncertainty still appears to be the order of the day.

Anyone who has heard me speak on EU food law, will know that I like to talk about certainty and knowing exactly what is expected so that we can plan for it; set against a backdrop where pretty much every area of food law has changed in the last decade. The two images below are my visual cues for it.  We all want the one of the left, the knowing reality where we are aware that  a changing coming  seeing that bend in the road and planning for it.  In reality, the way in which some of the laws have operated and been interpreted - see the Nutrition and Health Claims for just one high profile example - is that it is bit more like the image on the right.  Maybe it is bleak imagery, but it rather feels like the image on the right is where we are now, albeit it feels like the lightening is far more generously distributed up the road to the horizon.

Having watched more political interviews over the weekend than is perhaps healthy, the one thing that I took away from those putting their head above the parapet is that we now need to get on with figuring this out and making it work, finding ways to avoid the lightening if you will. So, with than in mind what does this mean for food regulation?  What does the future hold?

What now for food regulation?

When talking about EU food law there is a truism that almost all of it comes from the EU. And, obviously to continue to trade with the EU business will need to continue to comply with it. The import rules in Regulation 178/2002 make this clear, though there is the scope for mutual recognition, of sorts, in due course. So, if we change our rules business will face this inevitable increase in cost.

Since Friday, I have taken a much closer look at which laws might be at risk to try and work out what the impact really might be.  The short answer is that the Government has a lot of work to do!

Over the last decade there has been a steady march toward the greater and greater use of Regulations by the EU rather than Directives.  As my last post discussed, this is likely to have a very, very, significant impact as Regulations have direct effect and do not require domestic law to implement them (usually all there is is an enforcement regime domestically) and as a result, once we finally leave those laws will no longer automatically apply.  The diagram below is my quick assessment of some of the arrears that will be impacted, they are areas regulated by EU Regulations.

To try and keep things simple (!), I won't consider the impact on the raft of Directives implemented in our domestic law, but it goes without saying that some of them will be impacted too, particularly those where the domestic law simply says comply with 'Article X of Directive Y'.  While the law need not be changed, it would be hugely 'unsatisfactory' to have to comply with standards that we have no control over. The same would also be true of taking the same approach with existing EU Regulations.

What is impacted? 

Assuming Article 50 is triggered in October, that will mean that the hard date for exiting the EU will be October 2018 and by that time the EU will have had to legislated in all of the areas to the left to fill that void or let food become de-regulated and just subject to the requirements of the Food Safety Act. Possible, but very unlikely. 

Equally unlikely is the UK continuing to reference and informally adopt EU Regulation so therefore something has to change. The Government has work to do and I doubt this is top of the agenda.

To consider a couple of examples, I am sure there will be few who'd be unhappy to see the back of the Nutrition and Health Claims Regulation and its very restrictive permitted list of claims and all of the challenges that have followed its application.  I am sure many marketing teams would love to hear that provided they held objective substantiation that they were permitted to advertise any claim they desired.  Certainly this could create more flexibility and allow for a more creative environment however it is very likely that the regulators, and I am mainly thinking of the ASA, will just look to the EU approved list for guidance as to what is and what is not misleading and enforce accordingly.  It is very likely that while on-pack claims might be able to take advantage that the ASA would just continue to regulate in broadly the same way. So, perhaps no win here after all?

Given the vast cost of food labelling changes in December 2014 it seems very unlikely that business (or consumers) would really want to change again - even if this means that we could have an allergen box again.  However, at least in this area we do have the law already drafted in the form of the repealed parts of the Food Labelling Regulations 1996 which broadly speaking were fit for purpose.  Bringing these regulations back from the dead would solve the immediate problem of having some law.  We'd go back to a world where a nutrition box will not be mandatory (as it will be from December) and the minimum legible font size is not defined - so potentially more space for those marketing claims?  In a number of ways however  the Food Labelling Regulations are actually more onerous, for example in the 'wholly or mainly' provisions in respect of fruit depictions that did not make the cut in the EU equivalent.  Clearly more change.  More cost. Everyone loses, to some extent.

And that doesn't event get me started on the core pillars of EU food law, the General Food Law of Regulation 178/2002 setting out all of the core definitions and concepts the underpin the system and the various food hygiene regulations which are not covered in any where near as much depth in any existing domestic legislation.   Without these the system would be lacking.

How to fix this mess

There is no quick easy fix.  I don't have the answers and I am sure the options are being thrashed out as I type.  But, to me there doesn't really seem any other option but to legislate domestically to fill the void.  I am sure a system could be conceived which allowed us to rely on the standards found in EU law but I am struggling to think of any other example where a  country is regulating its own affairs by reference to the laws of a third country over which it has no control.  Surely that would be mad. However, it is relatively easy.

In legislating there is the 'cut and paste' approach to replicate the EU requirements domestically or there is the more discerning and probably appropriate approach.  Given the scale of the task cut and paste must be appealing, but if we are serious about being a more attractive market then the only option is to look at each law critically and assess its value and legislate accordingly - a time consuming and expensive process!  But, one with opportunity for business.

What is troubling to me is that in order to make a more 'competitive' market of 65million and perhaps generate a few more sales we are losing out on a harmonised starting point and free movement within a market of 450million more which seems a poor balance. I am sure my comments section will correct me here though. Maybe there will be growth, maybe there will be opportunity from adjustments, my crystal ball doesn't have these answers. But, one thing I do know is that there is a vast amount work ahead, I don't envy the Government this task.  The chances of getting it wrong are vast. 2 years is not a long time.