The Food Standards Agency has published its plans to reform the regulation of the food industry in England, Wales and Northern Ireland. We examine what the proposals might mean for businesses.
On 19 July 2017, the Food Standards Agency published its long-awaited plans to reform the regulation of the food industry in England, Wales and Northern Ireland.
The FSA’s “new regulatory model” for food is set out in a paper called 'Regulating our Future – Why food regulation needs to change and how we are going to do it'. The report is the product of a long period of consultation with key stakeholders in the industry, including food businesses, consumers and government bodies. We summarise the key changes below.
Why does food regulation need to change?
There has not been a similar "wholesale" reform of food industry regulation for over 30 years. In this time, and with the advent of technology, the landscape of the food industry and the way we produce, sell and consume food has changed. The industry now includes a number of new stakeholders, including online retailers and food delivery services, which bring with them a different set of risks and opportunities. The current "one size fits all" approach is outdated, and the FSA currently has no visibility over how many food businesses exist and who is running them.
A further catalyst for change is the UK’s impending exit from the EU – it is now even more important that the FSA’s regulatory model is seen to place robust controls on imports, exports and feed and food chains.
The above factors, together with the financial pressures faced by local authorities, mean that the current regulatory model is not as effective as it could be.
Five key principles
The future regulatory model will be built on five key principles, which can be summarised as follows:
- Safety and transparency: It is the responsibility of businesses to produce food that is safe and what it says it is, and to be transparent with consumers in the food information they provide.
- Tailored and proportionate: Decision-making by regulatory authorities should be tailored, proportionate and based on accurate information regarding the food industry.
- Informed: The regulator should take into account all available information sources.
- Targeted: Recognition should be given to businesses doing the right thing and action will be taken against those that don't.
- Financing the future: Food businesses should meet the costs of regulation.
Key features of the new model
While many of the proposed changes seek to build on or enhance the current regulatory approach, some of the suggested reforms represent a significant departure from the current model. These are:
- Introducing a "Permit to Trade" for all food businesses. The paper does not go into detail on how this will work in practice, but it indicates that businesses would need to obtain a permit before they can produce or sell food. This represents a significant departure from the current registration system, under which many businesses do not register before they begin trading. The FSA recognises that implementing a “Permit to Trade” regime will require new legislation, which will not be a quick process. Therefore as a transitional step, the FSA plans to enhance the current registration system, including through better use of technology.
- Shifting to a risk-based approach, under which the frequency and nature of regulatory intervention will depend on a business' ‘risk-rating’. For example, businesses with poor historic compliance may face more inspections than 'low risk' businesses, who the FSA says may not merit inspection at all. To assist with establishing a business’ ‘risk-rating’, the FSA is exploring the possibility of taking into account regulatory compliance in other areas beyond food. While an approach based on proportionality is to be welcomed, the success of this system will rely on a regular flow of information between food businesses and the FSA, as this will determine the FSA's ability to effectively carry out on-going monitoring. Without this, there is a risk that some businesses could fall through the cracks.
- Under the new system, businesses' internal processes for managing food safety and risks will be the starting point for the FSA's intervention model. Businesses will be pushed to share information with the FSA on their internal assurance systems and that information will drive the type and number of interventions (such as checks and inspections). In this context, the FSA envisages a wider application for private assurance schemes and potential for using Certified Regulatory Auditors.
- Implementing a new funding model, under which businesses demanding the most intervention will bear the most costs. Alongside this, all of the above changes mark a clear shift towards the cost of compliance being borne by food businesses rather than the FSA or local authorities.
The other changes set out in the report are less ground-breaking, but will still have significant implications for food businesses. The FSA proposes to set new standards which will provide welcome clarity to food businesses (and particularly SMEs) in helping them comply with the complex food regulatory framework. In addition, for businesses that operate in multiple locations, the FSA plans to focus on the business as a whole rather than on individual outlets. This will be achieved by developing the current Primary Authority scheme and National Inspection Strategy.
Finally, the report suggests that the FSA is considering introducing additional sanctions for non-compliance, including civil sanctions such as fixed penalty notices (which impose a fine for non-compliance).
What do the changes mean for you?
The report is fairly high level and as such it is difficult to predict what the changes will mean in practice. It is clear, however, that a key theme of the reforms is to encourage businesses to share more information with the FSA, which businesses will need to be prepared for.
The reforms will be carried out in two stages over several years, with the aim that the new model is ‘delivered’ by 2020. Phase 1 will focus on changes required in preparation for Brexit, to include enhanced registration and the development of National Inspection Strategies, whereas Phase 2 is likely to include more fundamental changes such as the "Permit to Trade" requirement, expanding the role of private assurance and reforming the funding model.
We will continue to monitor developments regarding the reforms and will keep you updated.