UK internal market: initial assessment of UK Government proposals

ANNEX B: Case Study – Food and Drink

The Scottish Government takes a holistic approach to this key sector of the Scottish economy, underpinned by a commitment to the high environmental, social and regulatory standards provided by EU law.  The Continuity Bill, currently before the Scottish Parliament, will allow for Scotland to keep pace with these EU standards in areas of devolved competence, from food safety and animal welfare to environmental standards and biodiversity to procurement. 

National food and drink policy encompasses the impact of food and drink on health, the environment, social justice, education and the economy in Scotland and aims to build a 'Good Food Nation' where people benefit from and take pride and pleasure in the food they produce, buy, serve and eat.

The UK Internal Market proposals potentially undermine these policy choices in individual areas and across the whole “joined up” approach to the interactions between them, threatening the progress made on this approach as well as jobs and businesses: 

• food safety and animal welfare standards would be undermined by the requirement to accept lower standards set elsewhere
• Scotland’s distinctive procurement system that requires public bodies to consider social and environmental benefits and not just take the lowest bid on offer could be challenged under non-discrimination rules. 
• the quality guarantee that underpins our world-class meat and seafood industries – and the many thousands of jobs they support – would be at risk from lower food and drink standards on Scotland effectively imposed in Scotland, either by regulatory decisions elsewhere in the UK or by the requirements of Free Trade Agreements.  In July, UK Ministers again rejected proposals to write requirements to maintain high food and animal welfare standards into law as part of future trade deals. 

Background

The food and drink industry is a major contributor to Scotland’s economy. It is worth around £15 billion each year and accounts for one in five manufacturing jobs. Scotland has 18,850 food and drink businesses, which employ around 115,400 people, many in remote and economically fragile rural and island communities.  It is identified as a growth sector in the Scottish Government’s Economic Strategy.

The Quality Meat Scotland Cattle & Sheep Assurance Scheme is the longest established scheme of its kind in the World and celebrated a milestone 25th anniversary in 2015.  This internationally recognised assurance scheme covers more than 90% of livestock farmed for red meat in Scotland.

After whisky, Seafood is Scotland’s second largest export, sold to over 100 countries. From farmed seafood, shellfish to whitefish, over 60 species are landed in Scotland. The export value for Scottish Seafood in 2017 was a record £944 million, an increase of 23% from the previous year; and has doubled over the past decade.

Scottish salmon is both Scotland’s and the UK’s top food export.  The USA remains the largest market for Scottish salmon with sales worth £193 million, followed by France (£188 million), China (£69 million) and the Republic of Ireland (£34 million).

The Scottish soft fruit sector is worth an estimated £115 million, contributing some 5% of total Scottish crop output by value.

Promoting sustainable production and procurement

Producing food and drink sustainably means farming and manufacturing it in a way that helps to preserve and protect the environment for future generations.

Procuring it sustainably means buying it from producers who minimise their impact on the environment, for example, by reducing their carbon emissions, and support the longevity of the industry.  The Scottish Government is committed to sustainable production and procurement to ensure a long and prosperous future for Scotland's food and drink industry, and the environment it depends on.

Organic farming

Organic farming supports the rural economy, encourages biodiversity, improves soils, protects water sources and helps minimise climate change.  In January 2016 the Scottish Government worked with industry-led body the Scottish Organic Forum to develop an Organic Action Plan outlining actions for growing the organic food and drink supply chain.

The Action Plan includes delivering the Organic Ambitions Fund 2016-2017 that will award funding to one or more applicants capable of developing existing relationships within the organic supply chain, identifying and addressing critical gaps, and demonstrating a proven track record of successfully developing co-ordinating and delivering projects.

Sustainable public sector food

The Procurement Reform (Scotland) Act 2014 includes a sustainable procurement duty requiring public bodies to consider and act on opportunities to improve economic, social and environmental wellbeing through their procurement activity.  Public bodies are required to demonstrate through procurement strategies and annual procurement reports how they comply with the sustainable procurement duty. They are also specifically required to set out in their procurement strategy how they intend their approach to regulated procurements involving the provision of food to improve the health, wellbeing and education of communities in their area.

Catering for Change: Buying Food Sustainably in the Public Sector explains how working within procurement legislation can help public sector bodies support the sustainable procurement of food.

The Schools (Health Promotion and Nutrition) Act 2007 outlines mandatory food and nutrition standards and advocates the procurement of sustainable food.