Regulatory challenges of getting product to market: roundtable discussion

Items and actions

Introduction and welcome

The Chair Ross Finnie, Chair of Food Standards Scotland, opened the meeting and welcomed attendees from across food and drink business and representative bodies. He stated that 96% of the regulations Food Standards Scotland have an interest in are derived from EU law so this discussion was timely and important. The Chair outlined that the discussion would be under Chatham House rules and all comments from participants would be unattributable to enable open and honest discussion.

Presentations

Michael Russell, Minister for UK Negotiations on Scotland’s Place in Europe commented on the recent decision by the Scottish Parliament to withhold consent to the UK Government’s Withdrawal Bill. He stated that while the relationship with the UK Government was challenging it was also right to work closely and respectfully to prepare for the technicalities of Brexit. On this there was a clear need for any continuing law to reflect the importance of the principle of subsidiary and respect the devolution settlement. Any UK frameworks required must be agreed not imposed, and the Scottish Government was working with UKG to find way forward. Brexit issues boiled down to three key issues - people, money, and regulation and, although Brexit would be damaging in every way, continuing single market and customs union membership was the best way to protect Scotland’s interests.

Professor Russel Griggs, Chair of the Regulatory Review Group, outlined proposals for three product journeys to better understand regulatory consequences of Brexit. He set out the background to RRG, to advise the Scottish Government on regulation, and had agreed to focus on food regulation as it cuts across many sectors. Professor Griggs discussed his initial findings on the regulatory journeys – eg around the sale of beef to France, salmon to north America and the import of materials for shortbread. He compared the current situation with future regulatory scenarios, and highlighted a number of challenges such as logistics, documentation, labelling, organisational structures, competent authorities, certification. On future trade deal negotiations, he stressed the importance of having Scottish representatives around table to ensure an understanding Scottish circumstances, and highlighted the need to prepare for a no deal scenario considering the length of time taken to negotiate trade deals. Professor Griggs also used case studies of practice around the world to explore issues around different levels of standards and regulatory frameworks.

Discussion

The Chair opened up discussion around two topics: Brexit impacts on regulatory practicalities of the current export supply chain; and priorities for the negotiation and future policy.

The following points were made in discussion:

Importance of preparing and planning for technicalities of Brexit. Timing was key – there is a need to know now what happens at the end of the transition period. We know EU import/health certificate and border inspection requirements, which should help industry plan ahead but of course risk any final trade deal requiring something different. Exporting into EU provides lessons on what to expect in future FTA – e.g. in terms of plant health, animal health. Industry needed more of a steer on how to do this, to enable it to do what it can now to prepare. The group discussed the need to share information on food/product journeys between sectors.

Explore issues around regulatory capacity - e.g. impacts on workforce capacity re. vets and environmental health officers to enable free flow of trade can happen. Capacity issues were as important as technicalities. And related issues around and capacity to prepare within industry - only a small base size of practical experience of customs arrangements, tariff regimes and the economics of trade e.g. paperwork required to export into the EU and balance between tariffs and non-Tariff barriers to identify which markets profitable.

Workforce – the importance of EU and non-EU workers for the sector, but freedom of movement alone not sufficient to meet needs.

Discussion around the need to consider impacts in a rural context, and engage with partners on practical preparations, the importance of protecting Scottish producer organisations and geographical indications.

The importance of food supply and export/import routes needs to be explored more fully. Practicalities of shipping distance whether from Dover/Calais; Cairnryan/Belfast or other routes should be looked at. Most imports/exports were on a Just In Time basis so there was a real risk of empty shelves in terms of perishable products. Practical lessons could be learned from recent experience – Beast from the East, Icelandic volcano examples.

The group shared frustrations around the continuing uncertainty, and challenges of planning without knowing final draft of EU Withdrawal Bill and other changes, e.g. replacements for EU programmes. Engagement to influence outcomes should be a responsibility of industry as much as intergovernmental or engagement through UK regulators. There were other influential players such as the World Organisation for Animal Health (OIE) through which to influence. And lessons could be learned from existing EU and non-EU trade deals.

There was discussion around the issues of regulatory alignment and equivalence. Regulatory challenges related to the environment and the impact that has on getting product to market needed to be part of this wider discussion. The group discussed the attraction of staying closely aligned to EU regulatory frameworks and the challenges of moving to equivalence straight away.

The group also discussed the scope for efficiencies and standardising processes between the public bodies doing similar tasks such in Scotland such as certification for exports.

Conclusions

James Withers, Chief Executive of Scotland Food and Drink offered closing remarks on behalf of industry. There were significant challenges working around the current paralysis. Planning around Customs Union was worth considering. Industry needed to do more to prepare regardless of the Brexit context, think for itself, and use mature exporting businesses to help better assess and understand vulnerabilities. He stated that there was a hierarchy to decision making, and need for early decisions to be made focussed on practical outcomes to enable industry to plan. The devolution of policy to Scotland has been important and generally successful for the agri-food sector, and there was a real need to find way around the current constitutional challenges. James also suggested that stage 2 of product journey would could look at practical next steps in terms of resources required, border inspections, freight capacity, policy around financial support for the sector, and used as a step to help unlock some of the current blockages.

The Chair closed the meeting highlighting the need for attention to be focussed as much on domestic as well as wider international negotiations.