As first reported in our legal update of 7 February 2019, the Department for Environment, Food & Rural Affairs (DEFRA) launched a public consultation in January 2019 to elicit stakeholder feedback on the most appropriate methods to improve allergen labelling regulation (the DEFRA Consultation). The consultation was focused on labelling rules for foods which are prepacked for direct sale (PPDS). This category of food product is defined as foods that are packed on the same premises from which they are being sold, before they are offered for sale. For example, a packaged baguette from a sandwich shop made by staff earlier in the day or a salad made and packaged in the kitchen of a caf_ and then placed on a shelf for customers to purchase. Currently these foods are not required to display allergen information. The DEFRA Consultation closed on 29 March 2019 and included a range of possible policy options and proposed regulatory interventions.
Earlier this month, following its consideration of the options listed in the DEFRA Consultation, Food Standards Scotland (FSS) recommended moving towards full ingredient labelling of PPDS foods. This is consistent with the recommendation stated by its 'rest of UK' counterpart, the Food Standards Agency (FSA). In this short update, we consider the rationale behind these recommendations and the industry impact of mandatory full ingredient listings.
Recap of the DEFRA consulatation
The DEFRA Consultation outlined four options, ranging from policy reform to robust regulatory intervention. In ascending order, the DEFRA Consultation outlined the following options:
- Option One: no regulatory reform to the governing Food Information to Consumers Regulation (1169/2011/EC) but focus on policy intervention to shape best practices by supporting enhanced collaboration between industry and regulators;
- Option Two: Introduce mandatory 'Ask the staff' labels on all PPDS foods. This option mirrors the current law in that a uniform label would be affixed to packaging, advising those with allergies to speak to a member of staff for information;
- Option Three: introduce mandatory 'allergen-only labelling'. This approach would require PPDS foods to have on their packaging the name of the food and whether any of the 14 allergenic ingredients are intentionally present; without requiring disclosure of a full ingredient list; or
- Option Four: introduce mandatory 'full ingredient labelling' requiring PPDS foods to contain a full ingredients list, as well as the name of the food and a list of the 14 allergens. This would align PPDS foods with the requirements for pre-packed foods.
The regulatory landscape
As noted in our February legal update, food allergen labelling is regulated at both an EU and UK level, as well as being a devolved power of the Scottish Parliament. Under EU law, PPDS food is treated like non-prepacked food and therefore they are not required to exhibit a label. However, information on the mandatory 14 substances and products known to cause food allergy and intolerance listed in EU law must be available for food sold this way. As such, food businesses have flexibility in how this information may be supplied to consumers, for instance by signposting consumers to where information may be found.
Despite being a devolved matter, there was broad consensus on the need to collaborate at a UK level and on an inter-departmental basis to form a coherent regulatory response to improve the legal and policy framework on allergen labelling. For that reason, Defra, the FSA in England, Wales and Northern Ireland, FSS, and the Department for Health and Social Care committed to work together to review the current legal framework for allergen information for PPDS foods.
On 8 May 2019, the FSA Board agreed to advise Ministers in England, Wales and Northern Ireland that full ingredient labelling should be mandatory for all PPDS foods. The Board concluded that full ingredient listings on PPDS foods would "deliver a significant improvement and greater consistency by following the same labelling system that consumers are familiar with, as found on packaged food." Shortly thereafter, on 15 May 2019, the FSS Board took the same approach and decided in favour of moving towards full ingredient labelling of PPDS foods. The FSS'recommendations will now be submitted to Scottish Ministers.
At the outset, it is worth noting the demographic of the consultation responses. In Scotland, around 65% of responses came from individuals, 21% from businesses and the remainder from Non-Governmental Organisations and Public Sector Bodies. Overall, 52% of respondents were in favour of full ingredients labelling i.e. Option Four. However, given that only 21% of Scottish responses were submitted by industry, this feedback is not necessarily reflective of the industry position. Indeed, the industry response was even lower across the rest of the UK with the FSS noting a representative percentage of 7%. Of course, this does not mean that the food industry has not engaged in the consultation but simply that the volume of individual feedback far outstrips the number of food businesses that submitted a response. In arriving at their recommendations, the FSS and the FSA have placed greater emphasis on the views of individual consumers.
The rationale to move towards a framework of mandatory full ingredients listing for PPDS foods is that consumers with food allergies and intolerances beyond those mandatorily defined by the FIC may have more trust in the food they are eating if provided with the full breakdown of ingredients. There are around 2 million people in the UK with a food allergy and according to a recent FSS consumer survey, 15% of people in Scotland are living in households where at least one person is allergic to certain foods or ingredients. Both FSS and the FSA placed considerable emphasis on consumer protection and underlined its overriding objective to deliver outcomes that provide consumers with information that enables them to make informed decisions, and reduces the risk to consumers. Full labelling transparency is an essential component of enabling consumers to make informed decisions. However, the foundation of promoting consumer awareness begins with education and accurate information.
If the aim of the consultation was to decrease the risk of allergic reactions in PPDS, mandatory disclosure of all ingredients (as opposed to just allergens) could potentially be an excessive response, and in particular could place a disproportionate compliance burden on small businesses. It is not clear why the regulators appear to have skipped over the possibility of a more balanced reform such as Option Three, which would focus on the allergens.
FSS recognises that mandatory full ingredient listing will present a significant compliance burden to industry. Based on DEFRA's costs projections, adopting an Option Three or Option Four approach would entail 'familiarisation costs' of £180,000. DEFRA acknowledges additional compliance costs would be incurred to update systems and prepare consumer information in the form of labels or stickers, which will clearly vary depending on business and the size and scale of change required. DEFRA made no attempt to estimate these costs. Indeed, the FSS reported that businesses expressed significant concerns over the risks, costs and practicality of mandating full ingredients listing given the complexity of supply chains, frequency of recipe changes, and potential to unintentionally mislead consumers. Ultimately, imposing a regulatory obligation on food business operators (FBO) to introduce a full ingredients breakdown for all PPDS foods in order to tackle risks relating to allergens could be seen as the regulatory equivalent of cracking a nut with a sledgehammer.
There is a further consideration that small businesses, if faced with the prospect of heightened PPDS regulation and subsequent compliance costs, would look to adopt a different trading model. For instance, some businesses could abandon PPDS sales entirely and apply a 'made to order' model that would not require the same level of labelling disclosure. Adopting a 'made to order' approach would likely reduce production capacity and profitability for small businesses. It would not improve allergen protection and would also reduce consumer convenience. Looking ahead, it will be interesting to see if a more burdensome regulatory framework will drive small business retailing PPDS foods to apply a different marketing route.
The FSS recognised that further work should be undertaken to assess the benefits and all of the risks in more detail. It should also be noted that the introduction of mandatory full ingredient labelling for PPDS would involve extending the scope of the current offences in the Food Information (Scotland) Regulations 2014. Local Authorities in Scotland have responsibility for the enforcement of the food information requirements, including the provision of allergen information, and these new regulatory requirements will need to be rolled out to and understood by local authorities if they are to be enforced effectively.
However, that is somewhat jumping the gun given that the recommendations have only just landed on the desks of the Scottish Ministers, who will now consider the need for regulatory intervention and possible law reform. Likewise, the FSA has provided its recommendations to UK Ministers (and Ministers elsewhere in the UK who will undertake the same review assessment for other parts of the UK). Change will therefore not be immediate but, given the current political will on this issue and the robust recommendations outlined by FSS and the FSA, it is likely that regulatory intervention on PPDS allergen labelling will be next on the menu.