Within six months the current parliament will be dissolved and, unless Labour makes a spectacular recovery over the next few months, the Toies will be preparing for power. James Ball explores how the shift in power will affect the grocery trade
This week, a warning from the FSA about new rules on vitamins and minerals landed on the desks of food and drink manufacturers nationwide. Astonishingly, it was the 287th to have been passed in the past decade.
Indeed, despite hopes the recession would lead to less red tape, the opposite seems to have been the case, which is why the food and drink industry is praying the Conservatives deliver on their pledge to cut the burden of regulation when, as now seems inevitable, they get into power. But will life really be any different under the Tories?
With a general election no more than six months away the industry is now starting to clamour for detail of what Tory food and drink policy will look like. So far, they've received little more than broadbrush promises. As well as slashing red tape, the Tories have pledged to do more to help British producers and processors and to pay more attention to the food and drink industry.
The statements have been welcomed, but with few specifics offered to date and action needed to pay down the UK's massive debt pile, there's reason for caution.
Ominously for supermarket suppliers, despite the Tories' claim to be "ready for change", they seem to share Labour's reluctance to appoint a dedicated ombudsman, even though the Competition Commission recommended it as a means of curbing supermarket power. "We should be in the business of reducing the number of quangos, not increasing them," says Nick Herbert, shadow secretary of state for the environment.
This doesn't mean that the Tories are going to be a soft touch as far as the supermarkets are concerned, he insists. They will just be looking for other ways of curbing their powers. "I don't accept or believe that the existence of the enhanced code would mean significantly higher prices," he says, commenting on the supermarkets' claims. "It's time the big four started talking sensibly about how this should operate and give up their resistance. There is an imbalance in power and a danger the supermarkets have become too powerful."
By the time the election comes around, Herbert promises to have firmed up his party's position, but he says the decision will be "only about the location of the enforcement" and not about whether there should be an enforceable code per se.
Fears the Conservatives will veto an ombudsman have spurred the latter's supporters to try and accelerate its introduction. Two weeks ago, Friends of the Earth teamed up with a group of suppliers and MPs to host a Westminster event aimed at fast-tracking its creation. At the time of writing, 205 MPs, including 15 Conservatives, had signed an Early Day Motion in support.
"We really do want a dedicated regulator," says one supplier. "We're worried that if it's absorbed by some other body, the regulator will only respond to formal complaints, rather than be proactive or act after informal conversations."
Whatever Cameron's party decides regarding the ombudsman, there are always going to be some parts of the industry that feel hard done by. One area where there has been more consensus is labelling. There has been strong industry support for the Tories' Honest Labelling campaign. Three of the big four have signed up to the initiative, which rallies against misleading country-of-origin labelling.
Current rules specify that products can claim to be made in Britain if the final stage of processing took place here. So imported pork turned into a sausage on UK soil can be counted as British, something the Conservatives are eager to change. "Let's face it, food has been passed off as British, and the consumer is entitled to proper information," says Herbert. "People who stand in the way of that argument are on the wrong side of transparency. Lots of arguments have been advanced as to why transparency isn't possible but they remind me of arguments by MPs who said there shouldn't be transparency on expenses: that it would be too expensive, and the costs would outweigh the benefits. All this is nonsense."
In September, Tesco joined Sainsbury's and Morrisons in pledging its support for the campaign and Tesco is currently relabelling 1,000 products. Herbert praises the retailers' approach and says if it is mirrored across the industry no legislation will be necessary but as manufacturers as well as retailers need to support the campaign, he hasn't ruled out the possibility.
The supermarkets will, like the manufacturers, no doubt still find themselves subject to fresh legislation. But at least they can take solace from one guaranteed reprieve. Zac Goldsmith, the influential Conservative candidate and green campaigner, is a vocal opponent of supermarkets and earlier this year called for a boycott of Sainsbury's. However, confirms Herbert, he will not, as was initially thought, have a role relating to the mults. Instead, he will be employing his "formidable talents" in encouraging government departments to procure more sustainable and local food.
Relief though that may be, there is a more pressing issue as far as retailers are concerned. Whichever party takes office, one of its top priorities must be to cut red tape, says Tesco corporate and legal affairs director Lucy Neville-Rolfe. "Over the next few years, everything will be dominated by the response to the legacy of the recession," she says. "Spending will be tight, which makes it more important to do things that help business but don't cost money, like cutting red tape. We need a new forest of red tape like a hole in the head."
Neville-Rolfe is keen to see the burden of paperwork cut on apprenticeships, of which she says Tesco is an enthusiastic proponent. She's also eager to ensure climate change regulation is handled in a way that minimises the bureaucratic burden.
She says 1,000 buyers have been retrained in the enhanced code of practice over the past six weeks, and emphasises the independence of the arbitration process relating to the ombudsman proposal. If an ombudsman were introduced, it "could have a momentum of its own", she warns. The OFT, she says, could act as the regulator to oversee the arbitration process an approach that sounds very similar to Conservative proposals.
Retailers and suppliers seem confident the Conservatives are serious about reducing, or at least controlling, the amount of regulation. The FDF is optimistic a Tory administration would be more willing to work alongside industry.
"Having met shadow ministers on several occasions, we'd hope a Conservative government would give greater recognition to food and drink as a major player," says FDF public affairs manager Barbara Gallani. "It's positive that to date the Conservatives have made efforts to work in partnership with industry and look at what consumers are demanding. We think the focus of talks will remain on voluntary regulation."
The industry expects Conservative policy to be more consumer-led and less interventionist. For the organic lobby, this shift might not be so helpful. Shadow ministers have signalled they are largely happy to leave the organic sector to its own devices, rather than support it with any government-funded research or awareness campaigns. In contrast, organic's big rival local will be the focus of Goldsmith's efforts to green-up public sector food purchases, even if steps to force supermarkets to stock more local are all but ruled out.
This laissez-faire approach is echoed in the Tories' nascent health policy. Recommendations by the Public Health Commission set up by shadow health secretary Andrew Lansley could spell the end of the controversial Nutrient Profiling Model and form the basis of a longer-term public information strategy. More stringent targets for reformulation and advertising to children are expected, however, even if they are likely to be trialled voluntarily at first.
Another popular aspect of the Conservative health strategy is the recent apparent commitment by shadow health minister Mike Penning to revisit the tobacco display ban, which the Association of Convenience Stores estimates will cost each c-store £1,800 to £5,000. Penning has told parliament the regulations will be looked at before they take effect in 2011.
Broadly, the industry has liked what it has heard from the Conservatives so far. Drinks manufacturers are pleased shadow minister for communities and local government Justine Greening has apparently ruled out minimum pricing, for instance, telling a delegation in April "we think you have to be careful about over-legislating on things like loss-leading".
However, the devil is in the detail and shadow home secretary Chris Grayling's tough talk on problem drinking at the party conference included a proposal for much higher duty rates on certain drinks which the Wine and Spirit Trade Association warns would be ineffective. "The evidence suggests that when some drinks are taxed more than others, consumers just switch," says a spokesman. "The risk in targeting certain products is that you inadvertently catch others in the classification and damage their business. We need a clearer idea of how this would work."
Conservatives promise all will be revealed on their health, labelling and competition proposals before the general election. The industry will be watching closely, but one last consideration outweighs all tax.
Shadow chancellor George Osborne has a structural budget deficit of 6% of GDP, about £78bn a year, to plug. Cuts announced at the party conference will make up 0.5% of GDP, meaning much more is to come. Proposals to fill the gap include both spending cuts and tax hikes.
Independent think tanks have suggested increasing business rates, increasing VAT and even scrapping food's zero rating. None of these measures would be well-received by a sector already hit hard by cost inflation and recession.
A quick straw poll of The Grocer's online readers four weeks ago found more than half of respondents plan to vote Tory. But the industry will still need to hear much more concrete detail before it decides whether it can trust a Tory government.