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Brexit Upheaval Demands EU State Aid Exemptions For Ireland

Food and Drink Industry Ireland (FDII), the Ibec group, has said the increased likelihood of a hard and disruptive Brexit, and a fracture of the single market demands a series of exceptions from EU state aid rules for the Irish agri-food and drink sector. In a new report, which sets out the case for exceptional support, FDII calls on the Government and the European Commission to put in place a comprehensive package to protect viable businesses and jobs during a potentially fraught Brexit process.

FDII Director Paul Kelly says: “The Irish agri-food and drink sector is uniquely exposed. There is a compelling case for exceptional state aid support to minimise the economic fallout and job losses. Already the currency squeeze is putting intense strain on exporters. This pressure is likely to intensify as the challenges and economic costs of a hard Brexit crystalise. The hardening of EU and UK negotiating positions mean we must plan for a very difficult Brexit process and the high possibility of a divisive outcome.”

The report proposes that state aid support should be targeted across three distinct areas:

* Enterprise stabilisation: Short term measures to allow the Irish Government to introduce enterprise stabilisation measures, as happened in 2009 during the economic crisis;

* Investment in competitiveness: Medium term measures to allow the Irish Government to introduce investment aids to support Irish food and drink companies invest in enabling technology, plant renewal and expansion, refinancing, market development and innovation to regain competitiveness following single market fracture;

* Diversification: Trade related measures, include export financing and export credit guarantees, to support the continued development of international export markets.

Paul Kelly.

To justify the exemptions under existing European legislation, the report sets out the unique position and exposure of the food and drink industry. The report highlights:

* Irish food and drink exports are more exposed to the UK than any other European sector across a large number of categories; typically four to six times more exposed than the average EU country.

* The extensive regional footprint of the food and drink sector, including regions which are economically disadvantaged relative to the EU average, means it is directly linked to the performance of the whole economy.

* Food and drink manufacturing accounts for half of direct expenditure by the entire manufacturing sector in the Irish economy (payroll, Irish materials and Irish services).

* The sector provides the exclusive outlet for much of farmer/SME produce, providing extensive added value and is thus crucially important to farm incomes.

“The industry is deeply integrated into the wider economy and its broad geographic footprint means the regions are particularly exposed to any shock to the sector. In the short term, the objective must be to put in place mitigating measures to help companies manage their businesses through on-going currency shifts and during exit negotiations. The medium term focus must be on maintaining markets in the UK, developing other markets and ensuring that in the domestic market, companies remain competitive against imports and the threat of cross-border shopping,” concludes Paul Kelly.

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Tougher EU Food Inspections From Farm to Fork

Plans to tighten up official food inspections, from farm to fork, have been adopted by the European Parliament. The new rules, already informally agreed by MEPs and the Council, aims to improve food traceability, combat fraud and restore consumer trust in the integrity of the food chain.

The legislation will provide a comprehensive, integrated and more effective control system in the areas of food and feed safety rules, veterinary and plant health requirements, organic production and protected geographical indication rules.

“After the horse meat scandal, consumers had serious questions about the traceability of food, and the integrity of the meat supply chain. The European Parliament strove to address these concerns and to end up with a text that allows competent authorities to effectively combat fraudulent practices,” says rapporteur Karin Kadenbach (S&D, AT).

She adds: “I am also proud that Parliament managed to have the chapter on enforcement strengthened, in particular regarding the penalties to be applied in the event of intentional violations of the rules. I trust that really deterrent penalties will be a key tool to combat fraud in every area.”

The new rules provide for:

* a comprehensive scope, encompassing the whole agri-food chain: controls on food, feed, plant health, pesticides, animal welfare, geographical indications, organic farming,

* unannounced, risk-based controls in all sectors,

* better enforcement against fraudulent or deceptive practices,

* import conditions for animals and products imported from third countries, and

* European Commission controls in EU member states and in third countries.

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Simpler Food Safety Rules Proposed For Small Retailers

The European Food Safety Authority (EFSA) has proposed a simplified approach to food safety management in small retail businesses such as grocery shops, butchers, and bakeries. The approach includes guidelines on how to identify the most relevant biological, chemical and physical hazards at each stage of the food production process, the activities or practices that make hazards more likely to occur and appropriate control measures.

A combination of managerial, organisational and technical hurdles means that many small food retailers have difficulty complying with the requirements of existing food safety management systems (FSMS). In particular, applying often complex hazard analysis and critical control point (HACCP) plans can be beyond the capacity of establishments that may employ only a handful of staff.

To help overcome this problem, EFSA has developed simple FSMS for five types of small food business – a butcher’s shop, a grocery, a bakery, a fishmonger and an ice cream shop – that are easy to understand and implement.

The new approach uses flow diagrams to summarise the stages of production, an accompanying questionnaire, and simple tables to take retailers through the food safety management process from hazard identification to control measures.

Marta Hugas, head of EFSA’s Biological Hazards and Contaminants unit, says: “Some aspects of current food hygiene regulations can be challenging for small businesses, particularly where resources are tight or expertise is lacking. This simpler approach, which the European Commission asked us to develop, would make it easier for such operators to identify hazards and take action to counter them. It’s a practical response to a known problem that could benefit consumers and food businesses alike.”

The streamlined system means, for example, that retailers are not required to have detailed knowledge of specific hazards. They need only to be aware that biological, chemical and physical hazards or allergens may be present and that a failure to undertake key control activities – such as correct chilled storage or separation of raw from cooked products – could increase exposure of consumers to a hazard.

The classical approach of ranking and prioritising hazards, which is usually required before decisions on control measures can be taken, has been removed.

Experts from EFSA’s Panel on Biological Hazards, who developed the Scientific Opinion, recommend that butcher, grocery, bakery, fish and ice cream shops apply the simplified approach. They add that it would also overcome many of the issues encountered by other small food businesses when attempting to implement effective food safety management systems and should therefore be considered for wider application within the food industry.

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UK Food Industry Welcomes New Rules on Advertising

The Food and Drink Federation – the voice of UK manufacturers – has welcomed the release of new Committee of Advertising Practice (CAP) rules banning the advertising of high fat, salt or sugar (HFSS) food or drink products in children’s media.

Ian Wright CBE, Director General of Food and Drink Federation, comments: “We fully support this landmark move in UK advertising which will end the advertising of foods and drinks high in fat, sugar or salt (HFSS) in media targeted at children, including online. Last year, FDF announced its backing for major changes to the way food and drink is advertised, based on our belief that non-broadcasting advertising rules should be in line with the strict rules already in place for TV.”

He continues: “HFSS food and drink ads have long been banned on children’s TV, with under-16s today seeing far fewer of these ads than in recent years. As young people move away from traditional media towards new and social media, we feel it’s important that ad rules keep up with this change.

“UK food and drink companies have a high compliance rate with advertising rules. FDF’s job now is to work with the ASA, AA and other partners to make sure advertisers understand how to meet these new requirements which represent a major shift in the UK advertising regime.”

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European Milk Package Strengthens Dairy Producers’ Position in the Supply Chain

The European Commission has published the second report on the operation of the so-called Milk Package, a series of measures launched in 2012 to strengthen the position of European dairy producers in the supply chain. The report shows that after three years of implementation, European farmers are increasingly using the tools provided by the Milk Package, such as collective negotiation of contract terms via producer organisations, or the use of written contracts. The measure allowing collective negotiation is designed to reinforce the bargaining power of milk producers, whilst written contracts offer better transparency and traceability to farmers.

The report was initially due to be delivered in 2018, but in light of the continuing difficulties in the dairy sector, EU Commissioner for Agriculture, Phil Hogan decided to fast-track the report to the end of 2016. This commitment was part of the series of solidarity packages for the dairy sector announced and implemented during the past year.

Phil Hogan says: “The report shows that there are measures that we can take at EU level to secure a better position for dairy farmers in the supply chain. Following on from the Agricultural Markets Task Force report last week, I see this report as further evidence for policy action, in the context of the 2017 Commission Work Programme.”

The report also examines further possibilities for dairy farmers. For example, it highlights the potential of two key instruments of the Milk Package – Producer Organisations (POs) and collective negotiations – which are not yet fully exploited by Member States, producers’ and farmers’ organisations, and outlines various ways of making these more effective both at EU and Member State level.

Member States are, in particular, encouraged to take the necessary steps to foster the creation of producer organisations with collective actions that go beyond collective bargaining, thus enhancing producers’ weight in the milk supply chain. In addition to these recommendations, consideration should be given to expand the role of Inter-Branch Organisations (IBOs).

For the full potential of the Milk Package’s possibilities to materialise, the report concludes that an extension of its application beyond 2020 should be considered.

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End to Time-at-sea Limits For North Sea Cod Fisheries

North Sea cod fishermen will be able to land every catch – not just cod – more easily following the European Parliament’s recent decision. The updated regulation will remove limits on the number of days a vessel can spend in a fishing area and thus remove all obstacles to complying with the landing obligation in full.

The update will amend the 2008 Regulation establishing a long-term-plan for cod stocks in the Kattegat, the North Sea, the Skagerrak and the eastern Channel, the west of Scotland and the Irish Sea, and fisheries exploiting those stocks. This will make it fully compatible with the new Common Fisheries Policy (CFP), by applying the obligation to land all catches in full.

MEPs removed the rule for calculating fishing effort – i.e. power of each vessel in kW plus the number of days it is present within a given area – as this led fishermen to discard unwanted catches by hampering further adaptation of fishing patterns, such as the choice of area and gear.

Under the new rule, fishermen will face no obstacles to landing all their catches as they will no longer be subject to time limits. The landing obligation and the discard ban are key elements of the new CFP.

The long-term cod plan aims to “maintain the cod stocks above levels which can produce maximum sustainable yield” (MSY).

The new regulation will enter into force on the fourth day following its publication in the EU Official Journal of the EU and will apply from 1 January 2017.

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British Frozen Food Federation Calls For Swift Action on Export Strategy

British Frozen Food Federation, the voice of the UK’s £8 billion frozen food industry, has called for the Government to deliver on its food export strategy as quickly as possible. The call follows a survey of the BFFF’s 300 plus members, which reveals that 55% of the respondents currently export, but only 45% see Brexit as an opportunity to increase overseas trade.

The survey also highlights concerns about the availability of labour, with several companies saying that the vote has already made it harder to recruit staff.

John Hyman, BFFF chief executive, says: “I am encouraged by the Government’s announcement of the new International Action Plan for Food and Drink which is designed to boost the sector’s exports by £2.9 billion. Our survey reveals there is already an appetite to export, with 31% of the respondents calling for a new globally focused trade policy. However, an overwhelming 64% want either no change to our current EU trading arrangements or free access without free movement of people post Brexit.”

John Hyman, BFFF chief executive.

John Hyman, BFFF chief executive.

He also highlights concerns about skilled labour, saying that the industry, which currently employs roughly 150,000 people, depends on a reliable supply of skilled people. “Many BFFF members are worried that they will not be able to recruit the right people at a time when they are facing tougher competition and looking to increase exports,” he says.

He also encourages the Government to think beyond traditional food and drink exports, saying: “There are many more opportunities beyond the products we have traditionally exported such as whisky, beef and shortbread. There needs to be a long-term commitment to a trade policy that enables and supports new and existing exporters.”

The BFFF study also reveals that 68% say the Brexit vote has had a negative impact on their business, with 51% of the respondents reporting increased input or ingredients costs since the June 23 vote. In addition, 30% of the members polled said the result of the referendum has had a negative effect on their investment decisions.

John Hyman is calling on the food industry to speak with one voice. “Food is the UK’s largest manufacturing sector, given the challenges the whole food industry faces, it’s essential we speak to government with one voice. That’s why BFFF is working with the Food and Drink Federation to make our case to the Government,” he remarks.

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Deep-sea Fishing Quotas Agreed For Next Two Years

The EU fisheries ministers have agreed on fishing limits (or Total Allowable Catches) for 19 deep-sea stocks for 2017 and 2018. It is the first time in six years that a unanimous agreement was reached on deep sea quotas.

One of the TACs agreed, the roundnose grenadier in Northern areas, will be fished for the very first time in accordance with Maximum Sustainable Yield levels, i.e. levels that allow the fishing industry to take the highest amount of fish from the sea, while keeping fish stocks healthy.

Deep sea fish are by nature special and vulnerable species. They grow slowly and can reproduce only as of 20 or 30 years of age. Therefore long-term sustainable management is necessary for these stocks. Furthermore, a new element in the agreement is the addition 3 small, scientific TACs for deep-sea sharks.

Commissioner for Maritime Affairs and Fisheries, Karmenu Vella comments: “For the first time we will have one deep-sea stock fished at MSY in 2017, which is good progress. For those stocks for which scientists are unable to give us MSY advice, our comprise recognises that we need to manage these sensitive stocks with caution, as we know little about them and as they recover very slowly. Combined with all this, the new element on sharks makes me feel confident that we have taken another important step for both our stocks and our fishermen.”

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Minimum Pricing to Impact Over Half of Alcohol Sales in Scotland

At least 50% of alcohol sold in Scotland does not meet the impending minimum price legislation. Spirits will be the most impacted as 69% of volume currently sold is below the 50p per unit threshold, according to measurement company Nielsen who analysed till sales (EPOS data) in nearly 1,200 stores in Scotland. Beer is the next most impacted (67% of volume is below the threshold) followed by cider (51%), while only 3.5% of wine sales would be impacted.

When looking at the top 50 selling products in each category, instead of total volume sales, 76% of the most popular spirits don’t meet minimum pricing compared to 74% in beer, 54% in cider and 12% in wine.

nielsennovember2016

“Wine is, by far, the least impacted and so has the most to gain from minimum pricing,” says Marika Praticó, senior client manager at Nielsen.“Overall, wine will need to raise prices by the least amount, thus, it becomes more affordable relative to other alcohol.”

Blended scotch and vodka are the two categories impacted most by minimum pricing legislation. Blended scotch, overall, will require prices to rise 20% to meet the threshold, whilst vodka requires a 16.3% rise.

Praticó notes that enforced price rises aren’t necessarily bad for the spirits industry; in fact it could result in increased revenue, as long as demand doesn’t fall beyond a certain “tipping point.” She explains,“This break-even figure is 12.5%, as long as any potential decline in demand doesn’t exceed this the industry will benefit thanks to the higher price point. Should demand fall by more than 12.5%, that’s when their revenues will decline.”

Implications

Nielsen’s analysis also raised four potential implications of minimum pricing legislation on retail behaviour.

As with wine, premium brands, particularly in spirits, are likely to benefit as the price differential between them and cheaper brands diminishes so, “it’s a good time for people to “trade-up” to the more expensive brands, which is likely to have a negative impact on supermarkets’ own-label offerings,” says Praticó.

She also expects a “near extinction” of major price-saving deals offered by retailers in spirits, beer and cider, as the likes of two-for-one deals would mean the effective price paid for each unit of alcohol would fall below the threshold.

In terms of shopper behaviour, there could well be an increase in cross-border alcohol shopping among the Scottish to England and Ireland, where prices would be cheaper, “mirroring what many Britons already do with the annual Calais run.”

Another implication Praticó notes is that there’ll also be the “inevitable stockpiling” of alcohol before the legislation comes into force which could well mean “a bumper Christmas for alcohol retailers.”

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Fishing Opportunities in the Atlantic and North Sea For 2017

In preparation for the December Fisheries Council, where EU Member States will negotiate fishing quotas in the Atlantic and North Sea for 2017, the European Commission is presenting its proposal on fishing quotas for next year in the Atlantic and the North Sea. This is the annual scheme for the amount of fish which can be caught by European Union fishermen from the main commercial fish stocks next year, also referred to as Total Allowable Catches (TACs). On the basis of the scientific advice received, the Commission proposes to maintain or increase the current fishing quotas for 42 stocks which are in good health, and reduce catches for 28 stocks which are faring poorly.

Karmenu Vella, Commissioner for Environment, Maritime Affairs and Fisheries, comments: “Our goal is clear: we need to bring all stocks to healthy and sustainable levels as soon as possible so that our fishing industry can remain viable. This is not up to the Commission alone: stakeholders are fundamental enablers in this process. We are proposing an ambitious programme for 2017 and the only way forward will be to work with fishermen, scientists and national authorities to develop real solutions that lead to fisheries that are both economically profitable and sustainable.”

Later this autumn the Commission will also propose some additional quotas, the so-called ‘quota top-ups’, for the fisheries that fall under the landing obligation in 2017. These extra quotas are granted on account of the fact that fishermen can no longer discard the fish caught unintentionally but have to land it. The allowed quota is therefore increased to facilitate the transition to the new system of no discards. The exact top-ups per fishery will be determined on the basis of scientific advice expected in mid-November and of the quantities that need to be landed according to the regional discard plans.

The proposal covers stocks managed by the EU alone and stocks managed with third countries, such as Norway, or through Regional Fisheries Management Organisations (RFMOs) across the world’s oceans. International negotiations for many of the stocks concerned are still ongoing and some stocks are awaiting scientific advice. For these, the figures will be included at a later stage, once the negotiations with third countries and within RFMOs have taken place.

The current proposal will be submitted for discussion and adoption by the Ministers of the Member States at the Fisheries Council in December, to be applied as from 1 January 2017.

ECFishDetails of the Proposal

The Commission’s objective, under the reformed Common Fisheries Policy, is to have all stocks fished sustainably by respecting the Maximum Sustainable Yield of a fishery. Fishing at Maximum Sustainable Yield (MSY) levels allows the fishing industry to take the highest amount of fish from the sea while keeping fish stocks healthy. The Commission proposes maximum fishing levels on the basis of scientific advice received from the International Council for the Exploration of the Sea (ICES). This year, ICES advice was given for 34 stocks.

* Stocks at sustainable levels

For some EU stocks already at MSY, such as anglerfish in Southern Waters, common sole in the Skagerrak/Kattegat and sole in the Western Channel, the Commission proposes to raise the TACs. Increases are also proposed for Norway lobster in the Kattegat/Skagerrak, horse mackerel in Atlantic Iberian waters and haddock in the Irish Sea and Celtic Sea. The continued growth of the Northern hake stock also justifies a new substantial increase in the TAC.

ECFisheries* Stocks fished unsustainably

At the same time, some stocks still give reasons for concern – for example cod stocks continue to decline in West of Ireland, in the Celtic Sea, in the Bay of Biscay and in Atlantic Iberian Waters. Sole in the Irish Sea is very vulnerable. The advice for whiting in the West of Scotland is for zero catches and decreases are proposed for megrims and pollack in the Celtic and Irish seas. In the Kattegat a reduction for plaice is proposed.

* The scientific advice for sea bass is also very alarming. The Commission has included in its proposal actions for managing sea bass in 2017. These management measures would allow some fishing possibilities to the small-scale fishermen that depend on this stock, but take into account that ICES advises to cut the overall landings of sea bass.

* Stocks for which scientific data are lacking

For cases where data are not sufficient to properly estimate the stock’s size, the Commission proposal follows the advice of ICES, i.e. cuts or increases of a maximum of 20%. Following a common statement in 2012, 26 data-limited stocks were set at a lower TAC but maintained for 5 years. For 2 of these stocks, updated scientific advice demonstrates that the stocks have declined further and an additional TAC reduction is now needed. This concerns sprat in the Channel and plaice in the Celtic sea and South-West of Ireland.

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Portugal to bring in sugar tax

Portugal has become the latest country to introduce a tax on sugary soft drinks, as its Government unveiled plans to bring in the levy next year.

While plans for a sugar tax were announced in last week’s Budget here in Ireland, it will be several years before it takes effect.

The Portuguese sugar tax will see the price of a 330ml can of soft drink rise by around 5.5 cents. The move is expected to raise around €80 million a year, most of which will be invested in public health.

The Iberian state follows the example of countries like France, Mexico and Hungary. They will soon be followed by the likes of the UK and South Africa, although there has been heavy opposition to their plans from the drinks industry.

The move comes just a few days after the World Health Organisation urged a tax on sugary drinks after a new report suggested raising prices by 20% or more results in lower consumption and “improved nutrition”.

The Portuguese Association of Soft Drinks opposes the proposed new tax, and says developments in food standards and reformulations to reduce sugar in soft drinks would be a better option.

They said: “We are committed to reduce the calorie content of soft drinks between 2013 and 2020, at least 25 percent. By the end of 2015 we have reduced 10.7 percent. This is an effective contribution to the reduction of calories in the diet of the Portuguese, but it should be noted that the consumption of soft drinks is only 2 percent of calories ingested by the Portuguese.

“The establishment of a special tax on soft drinks will lead to the transfer of consumption to cheaper brands which will have adverse effects for the national productive sector, since 85 percent of the volume of the manufacturer brands is produced in Portugal, while only 25 percent of the volume of private labels (cheaper) is of domestic origin.”

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Health Risks of Materials in Contact With Food – Tighter EU Safety Rules Needed

EU-wide safety rules are needed for more materials in contact with food, such as those used in packaging, kitchen utensils and tableware, say MEPs in a recent non-binding resolution. They note that only some of these materials, such as plastics and ceramics, have been fully tested for safety for human health. Others, including varnishes and coatings, inks and adhesives, have yet to be fully tested.

“This is how we ensure that the materials that are in direct contact with our food are safe. The current regulation allows for arrangements concerning 17 substances, but only four of these, at the moment, are harmonised at EU level. The rest are up to the member states to work out,” says rapporteur Christel Schaldemose (S&D, DK). Her report was approved by 559 votes to 31, with 26 abstentions.

“The lack of harmonised rules causes problems for consumers, for companies, and for the authorities. In reality, it means that the single market is not a single market: some countries have high standards, other low standards. We know from various studies that it is what is in the packaging that is causing health problems. The EU should therefore revise the current legislation. Food safety should mean the same thing across the EU,” she adds.

Chemicals leaching from food contact materials (FCMs) into food could endanger human health or change the composition of the foodstuffs, say MEPs.

Only four out of 17 EU-listed FCMs are currently covered by specific safety measures foreseen in existing EU legislation: plastics, ceramics, regenerated cellulose and ‘active and intelligent’ materials.

Given the prevalence of FCMs on the EU market and the risk that they could pose to human health, the EU Commission should prioritise the drawing up of specific EU measures for paper and board, varnishes and coatings, metals and alloys, printing inks and adhesives, MEPs say.

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EU Requests WTO Panel Over Colombia’s Discrimination Against Imported Spirits

The EU has requested the establishment of a WTO panel to rule on a dispute concerning Colombia’s discriminatory treatment of imported spirits. The EU and Colombia held consultations earlier in the year (8-9 March 2016), however consultations failed to reach a solution to the dispute. While the EU recognizes Colombia’s efforts to bring about reform in the spirits’ regime since the initiation of the dispute, EU spirits continue to be discriminated in the Colombian market.

The EU’s concerns about discrimination of EU spirits in the Colombian market are longstanding. EU spirits are subject to higher taxes and local charges than those applied to local brands. In addition, market restrictions apply in the departments or local subdivisions of Colombia. The departments impose market-access restrictions that distort the competitive conditions in the market to the detriment of EU spirits. This is in contravention of Colombia’s non-discrimination obligations under WTO rules.

Under the bilateral Trade Agreement with the European Union, Colombia committed itself to ending the discrimination by 1 August last year. The EU has raised the issue with Colombia on numerous occasions, including in bilateral meetings, WTO meetings and OECD membership discussions. The European Union continues to support Colombia’s efforts to bring about reform in this sector.

The EU is the number one exporter of spirits to the Colombian market and, as a result, the trading partner most affected by these measures (followed by Mexico, Costa Rica and the United States). In 2014, EU exports of spirits to Colombia – valued at €43 million – represented approximately 14% of total agricultural exports to Colombia and 77% of total Colombian imports of spirits. Within the different spirits exported by the EU to Colombia, whiskies represent the highest shared (€36 million) followed by liqueurs and cordials (€4 million). Colombia produces mainly rums and aguardientes, which account for 83% of spirits consumption in Colombia in 2013 figures, in comparison with 2.3 million cases of imported spirits).

The EU’s request for the establishment of a WTO panel will be discussed at the meeting of the WTO Dispute Settlement Body (DSB) of 2 September. If Colombia does not agree to the establishment of a panel at that meeting, the EU may table a second request at the following DSB meeting which, according to WTO rules, Colombia cannot block.

At any stage of dispute settlement procedures, Colombia can reform the spirits’ regime in Colombia and eliminate the discrimination of imported spirits, thereby prompting that a solution is found without necessarily waiting for adjudication by a WTO panel.

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Irish Beverage Council Highlights Costs of Proposed Sugar Tax

The Irish Beverage Council (IBC), the Ibec group that represents companies that produce, distribute and market soft drinks, juices, bottled waters and sports and energy drinks in Ireland, has published a new analysis of the impact of a possible sugar tax, which sets out the economic damage to consumers, business and the Irish economy that would result. It also examines the international evidence, which points to no resulting health benefits.

In ‘Sugar Tax: all cost, no benefit’, a detailed report for the Finance Minister in advance of Budget 2017, IBC points out that despite being introduced in a number of countries, sugar taxes have never achieved public health objectives of reducing the consumption of sugar or decreasing levels of obesity, overweight and related diseases.

However, the consequences of such additional discriminatory charges have instead increased grocery bills for families, spurred cross-border trade and smuggling, increased costs on businesses and threatened jobs.

IBC Director, Kevin McPartlan says: “Industry has a crucial role to play in tackling the serious obesity problem in Ireland. However, it is vital that the focus is on interventions that make a genuine and sustained positive impact. A sugar tax may be populist, but it is simply not supported by evidence. International experience proves beyond any doubt that sugar tax is singularly ineffective.

The report finds that a 10c sugar tax on a can of soft drink would result in:

* The average Irish household’s annual grocery bill will increase by €60

* Irish soft drinks companies will lose sales worth approximately €60 million per year

* The Irish exchequer will lose revenue of €35 million per year.

According to the report, if a soft drinks tax is introduced in the Republic then manufacturers, importers and distributors of soft drinks will not be alone in losing significant income due to cross border trade. The VAT which would otherwise be payable on those sales will be lost to the Irish Exchequer. This would have the effect of replacing a stable form of tax income with an extremely unstable one.

Based on the same industry modelling which revealed the level of loss to industry, it has been calculated that tax returns are likely to be reduced by €35 million. IBC urges the Minister for Finance to protect the level of VAT raised in Ireland by discouraging illicit cross border trade in soft drinks.

Kevin McPartlan continues: “Some say a sugar tax should be introduced even if it does nothing to reduce levels of obesity as it would create revenue to fund public health initiatives. Even if we ignore the fact that Department of Finance officials have ruled out such an approach, the revenue lost to cross border trade and the potential cost of lost jobs in the Irish soft drinks sector would greatly reduce and possibly even eliminate the net gain to the exchequer.”

A comprehensive recent report conducted by Food Drink Industry Ireland found that through reformulating existing drinks and introducing new products, IBC members removed over 2500 tonnes of sugar and 10 billion calories from the Irish diet in the seven years to 2012. This was at no cost to consumers. Imposition of a sugar tax would threaten soft drinks companies’ capacity to continue investment in such initiatives.

As Budget 2017 approaches, IBC urges the Minister for Finance not to introduce an additional charge on soft drinks that would achieve no public health benefit but will cost consumers, business and the Irish economy.

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Brexit – What Now For Scotch Whisky?

Since UK voters decided that the UK should leave the European Union, the Scotch Whisky Association has been busy consulting members on what that means for one of the country’s most significant industries and exporters. More than 90% of Scotch Whisky produced is sold outside the UK. Indeed, Scotch Whisky is the biggest single net contributor to the UK’s balance of trade in goods, and without this contribution the UK’s trade deficit would be over 10% larger.  Moreover, of the £3.8 billion worth of Scotch exported last year, £1.2 billion – almost a third of the total – was shipped to the EU.

So, as global traders, the industry is taking a very close interest in the arrangements for trade after Brexit.  The Scotch Whisky Association (SWA) has a wealth of knowledge and experience of EU and global trade and legal issues, built up over many years. It is ideally placed to advise on the post-Brexit options that will be best for the UK economy and its position on the world stage.Here the SWA sets out the potential consequences of Brexit for Scotch – including challenges and opportunities – and what action the industry wants to see from governments.1.  Certain things will not change, whatever the future arrangements:

  • Scotch Whisky will not face a tariff on exports to the EU.  0% is the current EU tariff and World Trade Organisation (WTO) rules mean it won’t change.
  • In many markets Scotch will also continue to benefit from existing zero tariffs, for example in the US, Canada, and Mexico, as these are offered to all countries already.  In many other markets that already demand high tariffs, for example India, Brexit will not make the situation any worse.
  • We will be able to protect Scotch Whisky across the EU and globally to the extent we can now, although the precise mechanisms for some markets will have to change, and we will have to put other measures in place to ensure continuity.

2.  Other things will definitely change:

  • As for other UK goods, there will be new administrative requirements (rules of origin) for exports to the EU.
  • The UK will eventually lose access to the EU’s Free Trade Agreements (FTAs). Unless there are transitional arrangements, Scotch will lose significant tariff reductions in certain markets, notably Korea, South Africa, and Colombia and Peru. The UK will eventually need to negotiate its own FTAs or rely, as the EU largely does with most countries, on WTO rules.  This will take a major upgrade of capacity within the UK Government and can’t be done quickly.
  • We will no longer be subject to EU rules on excise duty or VAT.

3.  There are some major uncertainties:

  • The Government has not yet been clear whether it is looking for the UK to have EEA status, like Norway, or a more distant relationship based on a Free Trade Agreement with the EU, like Canada or Switzerland.  The key difference is that EEA status keeps most EU single market laws in force in the UK, at the price of accepting free movement and a budget contribution.   An FTA relationship means Britain would need its own rules in these areas.
  • The difference is crucial because many laws setting out the rules for Scotch and the food and drink sector generally are made at European level – for example rules on the definition of whisky, food labelling, bottle sizes, and so on.  If these laws are to be rewritten it will make Brexit more complicated and the industry will need to start planning now.
David Frost, chief executive of SWA.

David Frost, chief executive of SWA.

4.  So the Scotch Whisky industry priorities are as follows:

  • a UK trade policy that is as open and free trading as possible;
  • Broad clarity on the nature of the future arrangement that is sought with the EU, so we know how much new legislation to expect;
  • agreement with the EU on practical arrangements enabling us to export Scotch Whisky to and across Europe as simply as possible.  We will also need new UK legislation for customs enforcement and interception of counterfeit goods;
  • Existing FTAs’ provisions to be subject to transitional arrangements, or to be ‘grandfathered’ (ie continue application to the UK after Brexit). This will need an understanding with the EU and with the third countries concerned;
  • Over the medium term, UK development of its own network of trade agreements with non-EU countries;
  • reflection on a new excise duty regime that is fairer to Scotch Whisky and taxes alcohol more rationally across categories; and
  • No further burdens on business at such a sensitive time.

David Frost, Scotch Whisky Association chief executive, says: “Scotch Whisky is one of the UK’s most successful exports. We are calling on the UK Government to bring clarity to the transition to Brexit as soon as possible, and to negotiate to ensure that the current open trading environment is not affected.  Finding practical ways forward on export practicalities and on free trade agreements should be high on the agenda as negotiations begin in the coming months. We plan to play an active role in influencing this whole process to ensure that Scotch remains a product enjoyed across the globe.”

Posted in Industry, News, RegulationsComments Off on Brexit – What Now For Scotch Whisky?

Groceries Code Adjudicator Achieving Significant Progress For Suppliers

The UK’s top ten supermarkets have all acted on issues raised by the Groceries Code Adjudicator (GCA) and suppliers are seeing the benefit. Adjudicator Christine Tacon (pictured) says that she is achieving significant progress as a sector-wide survey showed a further fall in the number of suppliers experiencing Groceries Code-related issues.

According to the YouGov survey carried out on behalf of the GCA 62% of direct suppliers said they had experienced an issue in the past year – compared to 70% in 2015 and 79% in 2014.

Suppliers rated Aldi, Sainsbury’s and Lidl as the top three supermarkets in terms of complying ‘consistently well’ and ‘mostly’ with the Code during the previous 12 months.

Direct suppliers also told YouGov that most retailers have improved their behaviour in the past year with the highest performer identified as Tesco – 65% of those supplying the retailer saying its practices had improved and only 5% reporting they had worsened.

“All the regulated retailers have acted on the issues I have raised over the past year and there have been some excellent examples of changes in retailer practice,” says Christine Tacon. “I am delighted that direct suppliers are seeing the impact of real change for their businesses. For the second year running the number of suppliers reporting Code-related issues has fallen.”

The YouGov survey identified the top issues experienced by suppliers: incorrect deductions from invoices with or without notice topped the list on 30% followed by excessive retailer charges for artwork/design (28%) and no compensation/incurring penalty charges for inaccurate forecasting (22%).

Christine Tacon has used the survey findings and other information received as well as her learnings from the Tesco investigation to develop a new list of Top 5 issues that will be the focus of her work in the coming year. She has also launched a formal consultation into payments for better positioning of goods – one of the five issues.

“During my investigation into Tesco I found areas of concern about the issue of payments for better positioning or increased share of shelf space,” she says. “I came across instances where a Tesco request for investment resulted in the supplier asking for share of shelf space commitments, product placement near competitors and exclusivity.”

She continues: “I also saw examples of significant payments for category captaincy and range reviews where suppliers felt that if they didn’t pay they would be adversely affected in terms of positioning on shelf. Such arrangements appear to have the potential to have an adverse effect on competition through retailer acceptance of large sums of money from suppliers in exchange for better positioning or increased shelf space.”

The consultation is open for 12 weeks until 19 September and the responses will help the Adjudicator clarify how paragraph 12 of the Code relating to payments for better positioning should be interpreted.

GroceriesCodeAdjudicatorOther topics covered by the survey:

* A rise in the number of direct suppliers undertaking training in the Code (29% to 35%) – following a GCA campaign urging suppliers to ‘get trained’;

* A strong preference among suppliers for online training tutorials; *Increases in supplier knowledge across all retailers about where to find the Code Compliance Officers;

* A fall in the number of direct suppliers saying they have raised an issue with a retailer in the past 12 months (17% to 13%);

* Jump in both good understanding of the Code and good understanding of the GCA’s role and responsibilities (up 7%).

One area of disappointment for the Adjudicator was no change in the proportion of suppliers prepared to bring information to the GCA.

Christine Tacon comments: “I am disappointed that the number of suppliers saying they would bring an issue to me remains stubbornly on 47% – with more than half giving the reason as fear of their relations with a retailer being damaged. This is despite the publicity around the Tesco investigation and a clear demonstration that I can carry out a complex investigation with significant findings and benefits for suppliers with no identities revealed.”

She adds: “In the coming year I will be redoubling my efforts to overcome this fear factor and also to reach suppliers overseas where knowledge of the GCA remains low.”

Posted in News, RegulationsComments Off on Groceries Code Adjudicator Achieving Significant Progress For Suppliers

Baltic Plan – First Long-term Fishing Plan Under New Common Fisheries Policy

The EU multiannual plan for managing Baltic Sea cod, sprat and herring stocks has been approved by the European Parliament. This is the first new Common Fisheries Policy (CFP) regional plan that takes account of interactions between species. It aims to ensure the sustainability of fisheries and offer fishermen better economic conditions in the long run. Parliament and Council negotiators reached an informal agreement on it in March.

The multispecies management approach is much more effective than managing a single species. It takes account of inter-species interactions, such as cod eating herring and sprats and sprats eating cod roe. The new plan – approved by 480 votes to 68 with 39 abstentions – aims to ensure balanced and sustainable exploitation of these stocks and guarantee stable fishing opportunities and livelihoods for fishermen.

“After ten months of difficult negotiations with the Council and the European Commission we have a plan that upholds and respects the objectives of the basic regulations. In the end this plan will ensure that the fishing activities in the Baltic are conducted in a sustainable, reasonable and economically viable way which will not put unnecessary strain on the environment,” says rapporteur Jarosław Wałęsa (EPP, PL). “The European Parliament showed its commitment to sustainable fishing in the EU and the future for the industry and I must ask the Commission and the Council to do the same.”

Fishing Ranges and Safeguards

The key point of the new multi-species management plan are the ranges within which the Council can set the Total Allowable Catches (TACs) and quotas. These ranges are set so as to ensure the sustainability of fisheries and the plan allows enough flexibility to address all issues for the fishing sector from year to year.

Parliament ensured that the plan includes strong safeguard measures which aim to maintain stocks at sustainable levels. When scientific advice indicates that the spawning stock biomass of any of the stocks concerned is below the minimum spawning stock biomass reference point as set out in an annex to the regulation, all appropriate remedial measures will be taken to ensure rapid return of the stock concerned to levels above the level capable of producing maximum sustainable yield (MSY).

Landing Obligation, Technical Measures and Regionalisation

The plan includes several provisions for enforcing key parts the new CFP, such as the landing obligation (“discard” ban), and regional management. These measures will build on the joint recommendations from the member states. Regional advisory councils will be consulted during this procedure.

Three years after the Baltic plan regulation enters into force and every five years thereafter, the EU Commission will report to Parliament and the Council on the impact of the plan on the stocks and on the fisheries sector.

This Regulation will enter into force on the fifth day after its publication in the EU Official Journal.

Posted in News, Regulations, SustainabilityComments Off on Baltic Plan – First Long-term Fishing Plan Under New Common Fisheries Policy

Navigating Complex Global Rules For Soft Drinks

Leatherhead Food Research is addressing uncertainty over challenging global regulations for soft drinks and fruit juices with a bespoke industry guide. The aim of the Global Regulatory Guide on Soft Drinks and Fruit Juices is to help manufacturers and retailers make sense of the complex regulatory environment and enhance their response to it.

Requirements can vary significantly between countries and much of the legislative information is held in multiple documents issued by various authorities in native language only. Leatherhead’s multilingual Regulatory Services Department has extracted and translated pertinent details to compile the single source guide.

“Many soft drinks manufacturers and retailers that we speak to are looking to expand quickly into new geographies,” says Tony Hines (pictured), VP Global Regulatory Services at Leatherhead. “In order to achieve this, it is vital that they have a good grasp of relevant local legislation and regulation. The sector is under immense pressure and this has been exacerbated by the responses of some governments to issues surrounding health and added sugar. Our new guide spotlights issues that they need to be aware of to help ensure compliance.”

The publication covers regulations that govern soft drink and fruit juice production and marketing in more than 50 countries. It encompasses composition and labelling requirements as well as rules surrounding additives and flavourings. The guide can be used to highlight discrepancies between territories. For instance, since April 2015 fruit juices sold in the EU cannot contain added sugars, yet safe and suitable dry nutritive carbohydrate sweeteners are allowable in the US. The guide answers the needs of a broad spectrum of food industry professionals; from food technologists and product development specialists to regulatory affairs experts and exporters.

Access the report here: https://www.leatherheadfood.com/global-regulatory-guide-soft-drinks-and-fruit-juices

Posted in News, RegulationsComments Off on Navigating Complex Global Rules For Soft Drinks

MEPs Call For Strong Traceability System to Tackle Mislabelled Fish

A strong traceability system for all fishery products sold in EU restaurants and shops would help to prevent cases of mislabelling, said MEPs in a recent approved resolution. A sound EU fish labelling policy would in turn boost consumer confidence and the economic development of the EU fishing industry.

MEPs have voiced concern about various studies showing significant levels of mislabelling of fish products sold on the EU market and are calling on EU member states to step up national checks, including on non-processed fish supplied to restaurants and the catering sector, in order to tackle fraud and to identify the stage in the supply chain at which fish is mislabelled.

The non-legislative resolution was approved by a show of hands.

The European Parliament advocates creating a strong traceability system, from landing to consumption, which would give consumers confidence and strengthen the EU market. MEPs are calling on the European Commission to exploit the potential of DNA barcoding to help identify species.

Parliament is asking the Commission to assess the benefits of setting up an EU-wide labelling system which would need to ensure transparency and credibility of the certification process and provide understandable, verifiable and accurate information.

A sound European labelling policy in the fisheries sector would be a key factor in boosting the economic development of coastal communities, recognizing the best practices of fishermen and underlining the quality of their products supplied to consumers, says the text.

Parliament is calling on the Commission to remedy the confusion caused by the current EU labelling requirements, based on UN Food and Agriculture Organisation (FAO) areas and sub-areas, whereby fish caught off Galicia and the in Gulf of Cádiz are labelled as being from ‘Portuguese Waters’ those caught off Wales as from the ‘Irish Sea’ and those caught off Brittany as ‘Bay of Biscay’.

The Commission’s 2015 EU control plan assessing the prevalence on the market of mislabelled white fish with regard to its declared species found that the declared species was confirmed in 94% of the samples taken. However, for certain species, non-compliance levels were very high. The rate of 6% is considered relatively low compared to the findings of other more limited studies in member states.

Posted in Quality Assurance, RegulationsComments Off on MEPs Call For Strong Traceability System to Tackle Mislabelled Fish

New Grocery Regulations For Ireland

The Competition and Consumer Protection Commission has begun its role as enforcer of the new Grocery Regulations, following the publication of the Consumer Protection Act 2007 (Grocery Goods Undertakings) Regulations 2016. The regulations apply to retailers and wholesalers of food and drink in Ireland who have a worldwide turnover in excess of €50 million. Grocery businesses are now obliged to assess whether the regulations apply to them.

One of the key requirements of the Grocery Regulations is that all new or renewed contracts between retailers or wholesalers and suppliers will have to be put in writing. These regulations come into effect from 30 April 2016.

Isolde Goggin, Chairperson of the Commission, comments: “Our mission is to make markets work better for businesses and consumers alike. The Commission will use its powers to ensure compliance with the legislation, which brings predictability and certainty into the relationships between suppliers and grocery businesses in Ireland. This will be achieved through the requirement to have written contracts and the prohibiting of certain supplier payments unless they are provided for in a contract. The regulations also require suppliers to be paid within 30 days unless otherwise agreed during contract negotiations. Retailers and wholesalers will be obliged to demonstrate their compliance with the regulations in an annual compliance report to the Commission and to maintain records of their dealings with suppliers.”

A period of three months has been allowed to enable businesses to familiarise themselves with the requirements placed on them. During this time the Commission will engage with retailers and wholesalers to advise them of their obligations and to provide guidance to them in making the necessary changes, to ensure their compliance with the regulations. The Commission’s website provides guidance for retailers, wholesalers and suppliers and will be updated on an ongoing basis. {http://www.ccpc.ie/compliance-business/grocery-sector-regulations}

Isolde Goggin concludes: “We have a significant engagement programme planned, which will provide affected grocery businesses with the necessary knowledge they need to put in place the required compliance structures. The new Grocery Regulations are an important addition to the enforcement tools we have at our disposal and we are committed to using all of our powers to create a culture of compliance in the grocery sector to benefit consumers and businesses.”

Posted in RegulationsComments Off on New Grocery Regulations For Ireland




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