Food and drink is big business in both the EU and UK. In the UK alone, the sector employs more than 400,000 people and generates more than £12 billion’s worth of products for export to the rest of the world – without including alcohol. More than 72% of UK food and non-alcoholic drink is exported to the EU, while over 70% of UK food and farming imports come from the EU, making the industry a substantial contributor to the economy and important to include in any trade deals agreed with the EU and beyond as part of the Brexit process.
Regulation – a quick introduction
Almost all the rules governing how food and drink products are grown, manufactured, labelled and sold across the EU emanate from Brussels. EU legislation in this area aims to guarantee fair practices as regards trade in food and feed and ensure protection of consumers’ interests by also regulating official controls and how these should be carried out at all stages of the food chain. The EU also provides a framework for the harmonisation of rules on animal and plant health.
The EU also plays an enormous role in agriculture, with almost 40% of its total budget related to development through the Common Agricultural Policy (CAP), which provides, among others: regulation for direct payments to farmers, market support measures and rural development programmes.
The European Food Safety Authority (EFSA) is an important body when it comes to regulating food safety in the EU. Funded by the European Commission, this European agency was created in 2002 and works independently from the EU’s legislative bodies. It was set up to provide scientific advice on everything related to the food chain. EFSA conducts safety assessments in the fields of food and feed safety, nutrition, animal health and welfare, plant protection and plant health. Its activities, findings and opinions, therefore are of the utmost importance to the industry.
- EU regulations could be adopted wholesale by the UK government, denying producers / manufacturers the opportunity to take advantage of more liberal individual laws
- Manufacturers and producers will have to continue complying with EU law if they wish to trade in Europe – but may have less ability to influence the regulatory framework
- Potential labour shortages in the food and drink sector if rights of EU workers are not recognised – with a consequent rise in food prices
- After leaving the single market and customs union, UK exports to the EU will become subject to tariffs and custom checks, impacting on the food and drink companies’ competitiveness
- Regarding trade with countries outside the EU, the UK will lose its preferential trading terms, making the import of raw materials for manufactures of processes foods more expensive
- While the UK government is likely to adopt EU regulations wholesale, there will be opportunities for companies to press for some loosening of individual laws – creating a more advantageous trading environment
- Companies will welcome the loosening particularly of labelling requirements to give more flexibility on how products should be explained and presented
- The UK government will also be able to take advantage of differing labelling requirements, enabling it to better indicate the health benefits or risks of a particular product – as it is planning to do with the labelling of teaspoons of sugar in a food or drink, something currently banned under EU food labelling law