The champions of Brexit argue that businesses, including Food Business Operators (FBOs), will benefit from reduced regulation and the opportunity to expand into non-EU markets. The Food and Drink Exporters Association (FDEA) have recently reported that the non-EU export market has already seen significant growth – up 19.2% to £1bn in Q3 of this year, compared to 2015.

It is widely speculated that Australia and the US will be among the first countries with which the UK will seek to agree trading terms. However, regardless of any trade deal, if FBO’s want to sell UK packaged food in Australia and/or the US, they will need to comply with both the UK and the trading partner’s regulations on food packaging. In preparing to trade it is worth considering both the challenges and opportunities of the different regulatory regimes.

An FBO selling in the UK will first need to ensure that its packaging is UK/EU compliant, and also that it complies with any new post-Brexit domestic regulation. Food packaging and claims are highly regulated, with most UK regulation emanating from the EU. The current proposal for a Great British Repeal Act would mean that the existing legislation on food labelling and claims would become part of UK legislation until the government decided to amend or repeal it. Therefore, at least initially, UK Regulations are likely to continue unchanged. However, the government has already said in its 2016 childhood obesity plan that “The UK’s decision to leave the EU will give us greater flexibility to determine what information should be presented on packaged food”. Food labelling is a potential opportunity for divergence.

The current government focus on childhood obesity suggests it is unlikely that the government would relax existing labelling requirements such as those on health and nutrition claims. Indeed, the report commends the UK FBOs adoption of the Traffic light labelling scheme which was introduced as a voluntary scheme in 2013 and is a form of nutrient profiling. The EU is yet to adopt nutrient profiling. Rather, the plan suggests that, far from deregulating, the so called “Sugar Tax” on soft drinks is still on the cards and the government may welcome imposing new requirements such as revisiting the Sugar in Food and Drinks Bill which is due for second reading in January 2017. This would require FBOs to display sugar content on pack with illustrated teaspoons.

Those FBOs looking to export as well as sell domestically will need to consider whether their British packaging will be acceptable abroad. The hope would be that if most of the EU regulation on packaging and health claims remains the same, it is likely that British packaging would still be suitable for export to the EU.

The situation is more complicated for new opportunities such as Australia and the US. For example, the Australian approach to health claims is rather different to that in the EU. As with the EU, FBOs can only use approved health claims on packaging, but they also use their own “nutrient profiling” which works quite differently to the UK’s traffic light labelling scheme . This means that only food which meets a minimum nutritional profile can use any health or nutrition claim. Research published in Nature, the leading scientific journal, suggests that around a third of EU products using health claims could not use these claims in Australia. Therefore FBOs considering exporting to Australia will not be helped by the UK’s nutrient profiling regime and will likely need to create a certain amount of Australian-specific packaging.

As well as considering compliance with Regulations, FBOs should also be aware that consumer protection bodies are actively pursuing FBOs for misleading packaging. For example, the Australian Competition and Consumer Commission (ACCC) has recently announced that it has begun proceedings against Heinz for misleading advertising. The ACCC allege that the wording “99% fruit and veg” and “nutritious options for your toddler” erroneously suggest a health benefit, and therefore misleads consumers. The case has not yet been decided but regardless of the outcome FBOs looking to export to Australia should review their packaging to ensure it is not misleading by Australian or British standards.

In contrast, some markets such as the US are relatively deregulated. For example, in the US structure and function health claims do not need approval. Instead, the FBO must simply hold substantiation of the claim, ensure it is not misleading and publish a disclaimer. In practice this means that FBOs operating in the US can sometimes use claims very similar to EU approved claims without approval. In the US, for example, “calcium builds strong bones” does not need approval, but in the EU “calcium is needed for the normal growth and development of bones in children” can only be used if compliant with conditions of use.

It goes without saying that there is not always a neat match between the two regulatory regimes. This gap may get wider if the rumours around a deregulatory president elect prove accurate, meaning that any FBO wishing to export to the US will need to regularly review their EU and UK packaging for US compliance. FBOs may even find that the US regime presents opportunities to make new claims not currently allowed under British regulation. However, the benefits of creating US-specific packaging may also carry a burden if this means that the start-up investment needed to export to the US becomes too great.