Workers’ rights activists have urged the government to include all food manufacturers and packers under the remit of the Gangmasters Licensing Act.
Currently the legislation covers only those providing temporary labour for agriculture, on-farm processing and shellfishing. Anyone supplying workers to these sectors will have to be licensed from April 1.
The government is considering responses to a consultation on how much further up the supply chain the rules should extend.
The Ethical Trading Initiative fears that when Defra announces its verdict, expected this month, it will shy away from clamping down on further processors of produce.
It is worried that the government’s drive to reduce the burden of red tape borne by businesses will make it reluctant to impose yet more regulations on manufacturers.
Dan Rees, director of the ETI’s Temporary Labour Working Group, said: “We face a real danger that the largest and fastest growing sector - secondary food processing - will be excluded from the Act. This will create huge loopholes that will allow unscrupulous operators to continue to exploit vulnerable workers.
“The government should crack down on the illegal activity that led to the Morecambe Bay tragedy and support responsible employers by creating a level playing field. It should implement this Act in full across the entire sector.”
A Defra spokeswoman insisted the ETI’s fears were unfounded.
“The government is taking a genuinely open approach to considering the range of options in the consultation,” she said.

US chain Whole Foods Market has become the first major US company to convert all of its energy to renewable sources. The company said it would use wind power as its preferred source of renewable energy.
Wal-Mart created more than 125,000 new jobs in the US last year, with average full-time hourly wages increasing from $9.68 in 2004 to $10.11. It said that in some urban areas it increased further.

US spice company McCormick & Company is closing its manufacturing facility in Salinas, California, as part of its restructuring plan. It said this would result in the loss of 400 jobs and production would be moved to existing US manufacturing facilities.
Richard Clarke
Russian grocery chain Pyaterochka has revealed a 23% increase in 2005 net sales to $1,359m. Gross banner sales for 2005 increased by 31% to $2,084m, although like-for-like group sales were down 1%.
Dutch retailer Ahold disclosed fourth quarter consolidated net sales of E10.8bn. It said the figure was a 0.6% increase from the same period of 2004.
German retailer Metro Group has revealed a 4.2% increase in 2005 sales from E53.5bn in 2004 to E55.7bn. It said global sales had increased 10.5% and for the first time contributed to more than 50% of total sales.
Atkins Nutritionals has emerged from bankruptcy just five months after filing for protection. The company, which fell into financial difficulties after its Atkins low-carb diet lost popularity, said it would focus on products that control carbohydrate intake.
n sales Increase
n AHold up slightly
n Metro sales rise
n Atkins comeback
n Whole energy
n Wal-maRt wages
n US Job losses