The government increasingly believes codes of practice can win it votes, but is failing in its basic duty to tell food and drinks firms how they can comply with imminent legislation. Liz Hamson reports
The industry is about to be hit by the biggest raft of environmental regulations it has ever had to contend with (see right). Industry and environmental experts are warning that there is a serious risk the huge combined costs involved could drive some suppliers and retailers close to the edge. Yet, the government has still to acknowledge these concerns or, in many cases, provide detailed guidance on compliance.
The onslaught begins in January with the EU Emissions Trading Scheme and the extension of the Integrated Pollution Prevention and Control regulations to processors of dairy and raw vegetable materials. In August comes the controversial Waste Electrical and Electronic Equipment Directive and on December 31, the end of the derogation period for former foodstuffs from the Animal By-Products Regulations.
Small manufacturers in particular are likely to be hit hard. Bill Wadsworth, deputy chairman of the technical and legislative committee of the British Frozen Food Federation, says: “The worst case scenario is that costs are so high that businesses become unviable. I wouldn’t be surprised if some small producers get out.”
But large or small, manufacturer or retailer, everyone is going to find life much tougher as they struggle to comply.
Take the WEEE Directive. Although it comes into force next August, there is still huge uncertainty as to whether the collection infrastructure will be ready in time and how much it will cost to upgrade it. Nigel Smith, CSR policy director at the British Retail Consortium, is blunt: “We are behind deadline because the government has been very slow taking things forward with the compliance scheme. The reason we’re missing the deadline is because of lack of leadership from the DTI and Defra. What we need is some certainty.”
There is even more uncertainty over the ABP Regulations. They came into force for everything except former foodstuffs last year. But, say experts, the regulations are so vague that they have been impossible to rigorously enforce - or adhere to. “The whole thing is a complicated muddle,” says Dr Ed Komorowski, technical director of Dairy UK.
The industry is still waiting for a decision on whether it covers products that are derived from animal foodstuffs, such as eggs and butter, for instance, he points out. “The impact for the dairy industry is still under consultation. At the end of next year the requirements change in terms of former foodstuffs, but before then there is going to be a change in dairy. We’re confused.”
To add to that confusion, the regulations suggest that waste will have to be handled in standalone facilities, which the industry is lobbying against. As a result, says Wadsworth: “Businesses are in a quandary. They don’t know whether to build a separate depot or wait to see whether the government will allow them to continue with existing facilities.” He says the regulations do not even properly define what waste is.
There is also mounting concern that the new processing facilities required will not be ready in time. Komorowski says: “We understand what is required for former foodstuffs but not the extent to which the facilities are being constructed.”
Much of the chaos could have been prevented, says Wadsworth. “Once again, the government, is trying to provide answers to questions that should have been dealt with a year ago. It is hard for trade bodies to put out guidance and the industry to second guess what it must do.
“The industry has been placed in a position where it can’t comply with the regulations as they stand now..”
The BFFF is advising its members that the decision that it is no longer intended for food, ie has become waste, is taken as late as possible. Meanwhile, the BRC has written to Ben Bradshaw, Defra parliamentary under-secretary, detailing retailers’ experiences of implementing the ABP regulations. Whether the industry wins concessions or not, the cost of compliance with the raft of regulations is likely to be steep.
That said, they are not all punitive. Beverley Parrish, consulting group director of environmental consultancy Enviros, says that businesses could slash their energy costs by up to 10% over 18 months if they take advice from organisations such as the Carbon Trust.
“With energy costs rising by up to 40% as well as the tough targets set by the Climate Change Levy, it is imperative that businesses address these issues as a matter of urgency. Failure to do this will not only be a lost opportunity to save money on energy costs. Targets are not met, the result will be the loss of the valuable CCL discount.”
There are likely to be precious few other perks when the regulations hit. Next year the environment is expected to be high on the government’s agenda and food and drink is seen as an easy target. “There’s going to be a lot of publicity about reducing retail waste,” says Smith. “We’re going to take a real battering and it’s being driven by politics.”
The Private Member’s Bill to introduce a plastic bag tax in Scotland is a sign of things to come, he warns. “When we spoke to Alun Michael, rural affairs minister, about waste he said he was getting lots of letters from his constituents about food packaging.
“It’s no surprise government sees it as an easy win.”
Are you ready for the...?
>>new rules you need to know about
The Waste Electrical and Electronic Equipment Directive
The WEEE directive, which comes into force in August next year, makes suppliers responsible for the recycling or safe disposal of worn out electrical goods. Retailers become responsible for collecting old products either through in-store take back or alternative facilities. Producers of own brand equipment will have a producer obligation. Rather than allowing retailers to assess gaps in local authority provision and cost alternatives, the government has set the industry an arbitrary charge of £10m. The BRC is expected to publish a report recommending a lower cost model in the next few days.
Animal By-Products Regulations 2003
The EU Animal By-Products Regulations relate to the collection, transport, storage, handling, processing and use or disposal of animal by-products. Introduced in 2003, debate continues to rage about whether businesses must have separate depots to handle waste, whether it covers animal-derived products, such as eggs and butter, and when food actually becomes waste.
EU Emissions Trading Scheme
The ETS, which aims to reduce CO2 emissions, comes into effect in January next year. Around 120 food and drink manufacturers will be affected by the scheme, which covers everyone with combustion plant over the 20mw capacity threshold. The scheme will be introduced in two phases. Phase one will run from 2005 to 2007 and companies with a CCA will be allowed to opt out of this phase. Phase 2 will run from 2008 to 2012.
The Integrated Pollution Prevention and Control Regulations
Introduced in 2000 in mainland UK and 2003 in Northern Ireland, these apply to many large food and drink processing facilities. In England, Wales and Scotland, the deadline for businesses processing meat and animal raw materials to submit their applications passed this year. The deadline for those handling dairy and vegetable raw materials is early next year. In Northern Ireland, the whole industry will be brought in line with the IPPC regulations during the course of 2005. Applications must take into consideration every impact of their business on the environment. They also need to ensure an environmental management system is in place, preferably accredited to ISO 14001.
Water Framework Directive
Embodied in legislation in December 2003 and expected to come into force next year, this is aimed at the water companies and will increase the cost of water. But it will also have an impact on businesses with discharge consents and abstraction licences that are large water users, including many food and drink industry manufacturers. The implications for the food and drink industry are not clear as the implementation, which is being coordinated by the Environment Agency, is still at the consultation and development stage.
Registration, Evaluation and Authorisation of Chemicals
Still in draft form but expected to be agreed next year, the idea of REACH is to create a European database of chemicals that businesses must register to be able to use. The costs associated with registration are expected to hit manufacturers hard but REACH could also influence product ingredients and ultimately NPD. It is also expected to have a knock-on effect on retailers through changes required to their own label ranges, possible changes to the labelling regime, and the need to absorb higher manufacturing costs upstream.
Climate Change Agreements
The Climate Change Levy, a tax on industrial energy use, came into force in 2001. Many food and drink manufacturers can obtain an 80% discount by entering into a Climate Change Agreement. But not everyone eligible for a rebate currently gets it. Targets were originally set at an average of 10% against 1999 levels by 2010 but are currently under review and expected to be raised by 3% next year.
The industry is about to be hit by the biggest raft of environmental regulations it has ever had to contend with (see right). Industry and environmental experts are warning that there is a serious risk the huge combined costs involved could drive some suppliers and retailers close to the edge. Yet, the government has still to acknowledge these concerns or, in many cases, provide detailed guidance on compliance.
The onslaught begins in January with the EU Emissions Trading Scheme and the extension of the Integrated Pollution Prevention and Control regulations to processors of dairy and raw vegetable materials. In August comes the controversial Waste Electrical and Electronic Equipment Directive and on December 31, the end of the derogation period for former foodstuffs from the Animal By-Products Regulations.
Small manufacturers in particular are likely to be hit hard. Bill Wadsworth, deputy chairman of the technical and legislative committee of the British Frozen Food Federation, says: “The worst case scenario is that costs are so high that businesses become unviable. I wouldn’t be surprised if some small producers get out.”
But large or small, manufacturer or retailer, everyone is going to find life much tougher as they struggle to comply.
Take the WEEE Directive. Although it comes into force next August, there is still huge uncertainty as to whether the collection infrastructure will be ready in time and how much it will cost to upgrade it. Nigel Smith, CSR policy director at the British Retail Consortium, is blunt: “We are behind deadline because the government has been very slow taking things forward with the compliance scheme. The reason we’re missing the deadline is because of lack of leadership from the DTI and Defra. What we need is some certainty.”
There is even more uncertainty over the ABP Regulations. They came into force for everything except former foodstuffs last year. But, say experts, the regulations are so vague that they have been impossible to rigorously enforce - or adhere to. “The whole thing is a complicated muddle,” says Dr Ed Komorowski, technical director of Dairy UK.
The industry is still waiting for a decision on whether it covers products that are derived from animal foodstuffs, such as eggs and butter, for instance, he points out. “The impact for the dairy industry is still under consultation. At the end of next year the requirements change in terms of former foodstuffs, but before then there is going to be a change in dairy. We’re confused.”
To add to that confusion, the regulations suggest that waste will have to be handled in standalone facilities, which the industry is lobbying against. As a result, says Wadsworth: “Businesses are in a quandary. They don’t know whether to build a separate depot or wait to see whether the government will allow them to continue with existing facilities.” He says the regulations do not even properly define what waste is.
There is also mounting concern that the new processing facilities required will not be ready in time. Komorowski says: “We understand what is required for former foodstuffs but not the extent to which the facilities are being constructed.”
Much of the chaos could have been prevented, says Wadsworth. “Once again, the government, is trying to provide answers to questions that should have been dealt with a year ago. It is hard for trade bodies to put out guidance and the industry to second guess what it must do.
“The industry has been placed in a position where it can’t comply with the regulations as they stand now..”
The BFFF is advising its members that the decision that it is no longer intended for food, ie has become waste, is taken as late as possible. Meanwhile, the BRC has written to Ben Bradshaw, Defra parliamentary under-secretary, detailing retailers’ experiences of implementing the ABP regulations. Whether the industry wins concessions or not, the cost of compliance with the raft of regulations is likely to be steep.
That said, they are not all punitive. Beverley Parrish, consulting group director of environmental consultancy Enviros, says that businesses could slash their energy costs by up to 10% over 18 months if they take advice from organisations such as the Carbon Trust.
“With energy costs rising by up to 40% as well as the tough targets set by the Climate Change Levy, it is imperative that businesses address these issues as a matter of urgency. Failure to do this will not only be a lost opportunity to save money on energy costs. Targets are not met, the result will be the loss of the valuable CCL discount.”
There are likely to be precious few other perks when the regulations hit. Next year the environment is expected to be high on the government’s agenda and food and drink is seen as an easy target. “There’s going to be a lot of publicity about reducing retail waste,” says Smith. “We’re going to take a real battering and it’s being driven by politics.”
The Private Member’s Bill to introduce a plastic bag tax in Scotland is a sign of things to come, he warns. “When we spoke to Alun Michael, rural affairs minister, about waste he said he was getting lots of letters from his constituents about food packaging.
“It’s no surprise government sees it as an easy win.”
Are you ready for the...?
>>new rules you need to know about
The Waste Electrical and Electronic Equipment Directive
The WEEE directive, which comes into force in August next year, makes suppliers responsible for the recycling or safe disposal of worn out electrical goods. Retailers become responsible for collecting old products either through in-store take back or alternative facilities. Producers of own brand equipment will have a producer obligation. Rather than allowing retailers to assess gaps in local authority provision and cost alternatives, the government has set the industry an arbitrary charge of £10m. The BRC is expected to publish a report recommending a lower cost model in the next few days.
Animal By-Products Regulations 2003
The EU Animal By-Products Regulations relate to the collection, transport, storage, handling, processing and use or disposal of animal by-products. Introduced in 2003, debate continues to rage about whether businesses must have separate depots to handle waste, whether it covers animal-derived products, such as eggs and butter, and when food actually becomes waste.
EU Emissions Trading Scheme
The ETS, which aims to reduce CO2 emissions, comes into effect in January next year. Around 120 food and drink manufacturers will be affected by the scheme, which covers everyone with combustion plant over the 20mw capacity threshold. The scheme will be introduced in two phases. Phase one will run from 2005 to 2007 and companies with a CCA will be allowed to opt out of this phase. Phase 2 will run from 2008 to 2012.
The Integrated Pollution Prevention and Control Regulations
Introduced in 2000 in mainland UK and 2003 in Northern Ireland, these apply to many large food and drink processing facilities. In England, Wales and Scotland, the deadline for businesses processing meat and animal raw materials to submit their applications passed this year. The deadline for those handling dairy and vegetable raw materials is early next year. In Northern Ireland, the whole industry will be brought in line with the IPPC regulations during the course of 2005. Applications must take into consideration every impact of their business on the environment. They also need to ensure an environmental management system is in place, preferably accredited to ISO 14001.
Water Framework Directive
Embodied in legislation in December 2003 and expected to come into force next year, this is aimed at the water companies and will increase the cost of water. But it will also have an impact on businesses with discharge consents and abstraction licences that are large water users, including many food and drink industry manufacturers. The implications for the food and drink industry are not clear as the implementation, which is being coordinated by the Environment Agency, is still at the consultation and development stage.
Registration, Evaluation and Authorisation of Chemicals
Still in draft form but expected to be agreed next year, the idea of REACH is to create a European database of chemicals that businesses must register to be able to use. The costs associated with registration are expected to hit manufacturers hard but REACH could also influence product ingredients and ultimately NPD. It is also expected to have a knock-on effect on retailers through changes required to their own label ranges, possible changes to the labelling regime, and the need to absorb higher manufacturing costs upstream.
Climate Change Agreements
The Climate Change Levy, a tax on industrial energy use, came into force in 2001. Many food and drink manufacturers can obtain an 80% discount by entering into a Climate Change Agreement. But not everyone eligible for a rebate currently gets it. Targets were originally set at an average of 10% against 1999 levels by 2010 but are currently under review and expected to be raised by 3% next year.
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