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UK unveils plans to cut costs of food regulation

By Ahmed ElAmin , 12-Dec-2006

Following the UK's food laws could be less costly and onerous under a plan to simplify the rules published yesterday by the country's regulator.

The Food Standards Agency (FSA) said the measures outlined in the plan would cut red tape in a number of areas by simplifying regulations such as those relating to hygiene, by using communications technology more effectively, by removing some requirements and by reducing unnecessary paperwork and administrative burdens.

Once implemented the measures are expected to save the public and private sectors an estimated £195m over the next year, of which £91.4m would accrue to the private sector, the FSA said.

"Although the focus may be on administrative burden reduction, the FSA also recognises the potential for regulatory simplification to be delivered in other ways – through codification of legislation, delivery of policy savings, and improved government efficiency," the regulator stated.

The total administrative cost of 53 food regulations is estimated to be £128.1m per year. This includes £42m ‘business as usual’ costs. These costs relate to information that businesses would provide as a normal part of their activities, even if the FSA did not require action.

The FSA estimates that about 97 per cent of its total administrative costs of the remaining £86m in costs relate to information obligations that result from EU legislation. In about half of these cases the UK has some discretion in how these obligations are implemented and in the other half there is no discretion.

About 3 per cent of the costs is attributed to information obligations of purely domestic origin, relate to 20 requirements contained within 12 of the FSA’s regulations.

The top ten most burdensome FSA regulations, based on information obligations are EU product traceability requirements, the Dairy Products (Hygiene) Regulations 1995, the Meat Products (England) Regulations 2003, the Fresh Meat (Hygiene and Inspection) Regulations, the Meat Products (Hygiene) Regulations, the Feeding Stuffs Regulations 2005, the Food Labelling Regulations 1996, the Food Safety (Fishery Products and Live Shellfish) (Hygiene) Regulations 1998, the Minced Meat and Meat Preparations (Hygiene) Regulations 1995, and the Poultry Meat, Farmed Game Bird Meat and Rabbit Meat (Hygiene and Inspection) Regulations 1995.

The top seven regulations account for about 91 per cent of the FSA’s total administrative costs, the regulator noted.

To tackle the costs associated with each of the regulations, the FSA measures included in the 2006/07 plan include the production of guidance notes on traceability requirements. The FSA's notes will take account of the European Commission's guidance but will be "clearer, simpler and more appropriate" for UK businesses, the regulator stated.

Replacing the deregulation associated with replacing a ban on cattle over thirty-months of age from entering the food chain, with a testing regime for BSE has also resulted in huge cost savings to the public purse and increased opportunities for the beef sector, the FSA stated. All cattle that test negative are now allowed to enter the food chain, thus ending public compensation for farmers that had to destroy their older cows.

In relation to the information obligations in the Meat Products (England) Regulations 2003, the FSA plans to amend the law to reflect changes to the current EU directive. The FSA expects to issue a formal public consultation package in March 2007 on the amendments, which it says will result in cost savings.

The current UK law requires requires meat products that look like a cut, joint, slice, portion or carcass of meat to be labelled correctly. The law targets such products as packaged marinated chicken portions and ham with added water.

This information obligation was estimated to cost industry £11.2m a year. In part, the information obligation stems from EU legislation, although other aspects are purely national. The relevant European legislation was, however, was revoked on 1 January 2006, as part of the introduction of the new EU food hygiene regulations.

"As well as taking into account these European changes, the FSA will review the nationally based aspects of the name of the food requirements," the regulator stated.

Other savings will come from helping businesses reduce the administrative costs of the new EU food hygiene legislation, which came into effect at the start of 2006.

The FSA estimated that the cost of the 58 information obligations contained in the new legislation is £90m, when business-as-usual costs are excluded.

The majority of the increased costs results from businesses having to document their food safety management systems. The FSA says it has developing procedures under its Safer Food Better Business programme that have "significantly reduced" the burden compared to what it would have been using procedures based upon classic Hazard Analysis and Critical Control Points (HACPP) systems.

"The FSA was instrumental in negotiating this flexible approach to implement and enforcement in to the original European regulations," the regulator stated.

The Safer Food Better Business programme, which consists of a package of advisory procedures, is so far available for small caterers and food retailers. The FSA is currently extending the programme to ethnic cuisine businesses and small care homes.

More savings will accrue from a simplification of the EU's food labelling laws, the FSA stated. The European Commission initially announced a review of the labelling requirements in 2004. A Commission proposal for the legislation is expected in 2007, along with an impact assessment.

The policy areas in the consultative document which fall within the FSA’s responsibilities include the strategic goals of labelling, the structure of future EU legislation, the scope, the use of logos and symbols, label clarity, the provision of voluntary information, ingredient listing on alcoholic drinks, origin labelling, and nutrition labelling.

"Whilst it is too early in the review to quantify accurately the benefits to stakeholders, we would expect there to be substantial savings on the £31m per annum estimated administrative cost of the current labelling regime," the FSA stated.

The plan also lists a number of changes the FSA has already implemented to cut the cost and administrative burdens. The main overall savings comes from the FSA’s existing Safer Food Better Business programme, which the regulator says has already generated cost savings for business of £137m.

Another big chunk of savings come from the switch to a cattle testing regime for BSE. Before the current system was introduced, cattle aged over 30 months were banned from entering the food chain.

Now any animal can enter the food chain, regardless of age, as long as they test negative for the disease. The new testing system eases the administration burden on farmers and provides them with greater revenue from the sale of older cattle than they received under a compensation scheme, previously available.

The FSA has also removed a requirement for butchers to be licensed, saving the industry an estimated £1.3m a year in fees, the regulator estimates.

Other savings come from the consolidation of 17 existing pieces of sector-specific legislation into three main EU food hygiene regulations, which came into effect at the start of this year.

The consultation document also outlines the UK's government programme to develop electronic systems to replace existing paperwork-based ones. The programme includes the development of a central database (GRAIL) to store legislative information and guidance on food imports, initially for port health authorities.

The GRAIL database enables Port Health Officers to search for legislation and guidance about food import controls through a computer database. Previously each port had to install its own individual reference system and many had to rely on hard copies of legislation.

The FSA estimates port health authorities currently spend a total of £90,000 per year in collating and managing records and looking up information and guidance about food import controls.

Businesses that import food will benefit by having queries resolved more quickly and efficiently. The time that food is held at ports awaiting clearance will be reduced, the FSA stated.

The FSA is also developing a database for food surveillance to hold information for the microbiological and chemical analysis of samples.

Under the system local authority officers would take samples for analysis and submit the data in encrypted format to a laboratory. After sample analysis, the results would be added by the laboratory and then securely downloaded to the local authority and to a centralised food database.

This database system would allow local authorities to hold food, animal feed and non-food sample results in a national database and share the information.

The system would allow local authorities to target their efforts based on risk-based enforcement policies. Issues posing a greater health risk would receive a priority under the system. The proposal could reduce the frequency of food plant inspections, by using policies based on risk.

A five-year contract to develop the system throughout the UK was signed on 1 December last year.

"The FSA is aware of the beliefs held by many businesses that the UK Government consistently over implements EU legislation," the regulator stated. "With around 90 per cent of food legislation originating from Europe we need to be constantly alert to the need to avoid over-implementation, unless there are demonstrable benefits that justify any additional costs."

The FSA noted that an independent report on its policies commented that food businesses generally felt that regulatory creep and over-zealous enforcement were big issues for the industry.

For the meat segment of the industry the FSA says it is developing a range of measures to make sure the responsibility for producing hygienic food is placed on business.

A key part of the plan is a move away from the requirement that cutting plants have a veterinarian present during operations. The change would require veterinarians to be in attendance when a risk-based audit says their presence is necessary.

The FSA is also working to reducing the frequency of inspections at plants by rating the risk of specific operations. The frequency of inspection will be based upon different risk-rating categories.

Since 2005, the FSA has introduced alternative enforcement strategies for the lowest risk-rated categories of plants, resulting in significantly fewer inspections.

Local authority statistics show that the number of scheduled food hygiene inspections made to premises in the low-risk categories fell from to 15,525 in 2005/06 from 24,674 in 2003/04, a decrease of 37 per cent during the period.

In relation to food standards inspections, regulatory visits have fallen to 17,192 in 2005/06, from 21,618 in 2003/04, a decline of 20 per cent.

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