Having officially left the EU in January this year, the UK is currently in a transition period until 31 December 2020. By this time, food manufacturers exporting across Channel - whether EU to UK, or UK to EU - may have had to update their food labels.
In Brexit and food labelling part 1, FoodNavigator detailed a number of short-term label changes food manufacturers should be aware of. The article covered the mandatory inclusion of names and addresses of food business operators (FBO), the use of EU logos, and country of origin labelling.
Now, we’re asking whether operators have enough time to apply these changes. What are the main challenges facing businesses wanting to comply, and what potential future divergences could be predicted for UK food labelling?
Doubts over businesses meeting deadline
No material changes in the EU or UK will manifest until after the end of the transition period, which is scheduled for 31 December 2020.
Yet given the current coronavirus pandemic, food manufacturers may well be wondering whether this deadline will be extended.
“There have been numerous suggestions by commentators that the transition period could, or should, be extended because of the delays in negotiating which have resulted,” regulatory compliance expert Nicola Smith, from global law firm Squire Patton Boggs, told FoodNavigator.
While the UK Government has repeatedly confirmed it will not look to extend, it is technically possible - under the terms of the Withdrawal Agreement – to extend the transition period once by up to two years by joint consent (although the UK legislation will also need to be amended to allow this).
“Any such extension would need to be agreed by a decision of the UK-EU Joint Committee before 1 July 2020,” Squire Patton Boggs’ Director, Environmental, Safety & Health, explained. It is therefore expected industry will have have certainty over the timeframe within the next few weeks.
If, as is currently planned, transition ends on 31 December 2020, the changes required will have to be made on labels for products placed on the UK or the EU market from 1 January 2021 onwards.
“In real terms, that is not a long timeframe for the changes to be made,” Smith told this publication, “as the wording and artwork will need to be agreed and implemented between now and then, as well as arrangements being made for the newly-formatted labels to be attached to products which may already have been produced and labelled already, but will not actually be shipped to the relevant market before 1 January”.
Indeed, if the transition remains as 31 December 2020, Smith revealed she ‘has doubts’ over whether changes will be able to be implemented to labels in time for new products placed on the market after that. This is because, as Smith explained, business continuity planning and arrangements to make workplaces ‘COVID-secure’ will surely take priority over coming weeks for manufacturers in both markets.
A welcome reprieve
However, one ‘real relief’ for manufacturers on both sides lies in a provision within the Withdrawal Agreement.
“Goods lawfully placed on the market in the EU or the United Kingdom before the end of the transition period [will] be able to continue to freely circulate in and between these two markets, until they reach their end-users, without any need for product modifications or re-labelling,” Smith told this publication.
EU food law defines ‘placing on the market’ as: “the holding of food or feed for the purposes of sale, including offering for sale or any form of transfer, whether free of charge or not, and the sale, distribution, and other forms of transfer themselves.”
Therefore, products that have already been shipped before 1 January 2021, should not need to be relabelled, for the most part.
“However, it should be noted, by way of exception, the movement of live animals and animal products between the Union market and the UK market will, as from the end of the transition period, be subject to the applicable rules of the Parties on imports and sanitary controls at the border, regardless of whether they were placed on the market before the end of the transition period, so those products ‘in transit’ at the end of transition may need to be relabelled, subject to any contrary agreement which may be reached during negotiations.”
So what are the main challenges facing businesses wanting to comply with post-Brexit labelling standards?
According to the regulatory compliance expert, the uncertainty of timing and the potential short timescales are a concern for many businesses.
“Although the required changes to the labels are relatively simple in terms of the label itself, deciding what name and address should be given is not always as simple – in my experience, many UK operators are still at the stage of considering whether they can use a service or subsidiary address in the EU, or otherwise which party will be their ‘importer’, and these matters need to be decided before the label itself can be amended.”
Producers will also need to consider existing stock levels. In particular, they should determine when those stocks will be deemed to be ‘placed on the market’ before the end of transition, to determine whether relabelling will be required and, if so, how many products will need to be relabelled.
The other main challenge, according to Smith, is that industry does not yet have clarity over the extent to which border checks will be undertaken on food and drink products – specifically, whether labels will be checked on arrival at the country or, more likely, whether compliance with sanitary and phytosanitary (SPS) requirements will be monitored.
“This will almost certainly depend on the outcome of negotiations over a trade deal, but will be very important for manufacturers and distributors on both sides, as delays in the supply of food and drink with a limited shelf life can be critical.
“The UK government has published its approach to the future relationship with the EU in recent weeks and it recognises the need to address regulatory barriers to trade and also stresses that any agreement should ensure parties’ SPS measures do not create unjustified barriers for agri-food goods between the UK and EU, but it will ultimately only be that agreement which will outline the level of checks and fees to which agrifood commodities will be subject at the border of the importing party, so there is currently no clarity over this.”
Predicting potential future divergencies for UK labelling
Over the longer term, Smith told FoodNavigator much may depend on negotiations between the EU and the UK on a trade deal.
“Such a deal might include a requirement for regulatory alignment,” she explained. “However, subject to the outcome of those negotiations, it is possible that there may be wider regulatory divergence between the EU and the UK in future after the end of transition.”
Areas of EU law which have sometimes attracted criticism as being too complex, or not sufficiently flexible in the UK, include nutrition and health claims – where the wording of authorised claims can be ‘so technical as to be almost meaningless for the average consumer’ – and nutrition labelling – with the UK government preferring a traffic light system which is not part of EU law, said Smith.
Further, there are also some areas where there has been speculation that EU laws could be adopted to be more specific to the UK, such as the list of allergens which have to be declared, currently based on the most common allergens in the EU, but which could conceivably be adopted to reflect the most common UK allergies.
“It is also conceivable that there could be political will to change current EU laws where there are particular public health concerns in the UK, for example measures aimed at addressing the obesity crisis, such as making calorie content on alcoholic drinks mandatory – something which has been on the horizon for change at EU level in any event, but which could perhaps be implemented more quickly in the UK after exit.”
However, all of that said, Smith predicts it to be ‘some time’ before any substantive changes are made, not least because there will be other priorities for the government in coming months and years in the immediate aftermath of Brexit and, of course, in the aftermath of COVID-19.
“In any event, the UK has helped to shape and lead the development of much EU food law, so there is unlikely to be a significant appetite to change the majority of these laws.”