Rash regulations threaten competitiveness, say executives

By Laura Crowley

- Last updated on GMT

Collaboration between industry and government is crucial to the
competitiveness of the food industry, according to the research
published by UK Food and Drink Federation (FDF).

The report, carried out by Professor Bruce Traill from the University of Reading, contained information and opinions gathered from FDF's membership, including manufacturers of all sizes in key product categories. It showed that while UK food industry shows higher levels of R&D than in the rest of Europe, it is half that in Japan. Additionally, productivity remains considerably lower than US levels. Although these sectors compare favourably with other UK industries, they are both good indicators of competitiveness, an area food executives consider to suffer under "hurried and non evidence-based regulation designed to satisfy public opinion",​ according to the report. Waning trust ​ Reputation is extremely important to the food industry, as consumers become increasingly concerned about what they put in their mouths, opting more and more for locally sourced, organic, natural and healthy products. The report, Working for theUK: our contribution to the economy​ said that various recent incidents have undermined the industry's reputation. Problems such as salmonella, BSE, foot and mouth disease, Sudan 1 and avian flu have caused the public's trust in food information to wane. In a 2004 UK survey of consumers on trust in the food chain, manufacturers were trusted less than all but one of the 22 groups asked about (which included retailers, the media, scientists and doctors). Only political lobby groups were trusted less. Additionally, food and drink companies reportedly feel they have taken much of the blame for the persisting obesity crisis. They consider they have been made scapegoats somewhat by the government, which fails to recognise the importance of the industry as the UK's largest and fastest growing manufacturing sector. A lot of focus has been placed recently on the food industry to reformulate their products, provide clear labelling and reduce advertising to children. Regulations ​Executives said that the industry needs better regulation, and that those laws that have been introduced are often lacking in sufficient consultation because the government is eager to "satisfy public opinion".​. Regarding health for example, the report said they believe the promotion of the "unproven"​ traffic light front-of-pack nutrition labelling scheme by the Food Standards Agency was immature. When it comes to the environment, executives feel it is important that government, with industry support, takes sufficient evidence to make science-based decisions on issues such as carbon labelling and packaging. The industry needs regulation to be timely and evidence-based, said the report. The need for a single standard for the measurement of a product's carbon footprint was considered urgent and. Study participants said firms were already introducing labelling schemes that are perceived as contradictory, confusing and meaningless. Furthermore, industry members felt the UK enforces EU legislation much more energetically than some other member states. They thought the answer lay not in relaxing enforcement in the UK, but to press other member states to apply rules with the same rigour and for the European Commission to ensure they prevent unfair competition. Competition from abroad is expected to intensify, but executives believe the industry is able to succeed and the continuing reform of the Common Agricultural Policy and a successful conclusion to the Doha Round trade negotiations are considered important. Although there will be continued pressure from middle income and transition economies (such as Brazil and Poland), global growth also gives opportunities for expansion abroad.

Related topics: Market Trends, Food labelling

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