Official Report: Minutes of Evidence

The Chairperson (Ms Ferguson): I welcome from the Department Samantha Swann, head of poultry meat, eggs, dairy, wines and spirits, hops and hemp policy; and Samantha Stewart, head of food security, beef, pigs and sheep policy.

Samanthas, I invite you to brief the Committee.

Ms Samantha Swann (Department of Agriculture, Environment and Rural Affairs): Thank you, Chair and Committee members, for the opportunity to speak to you today on the proposal to amend regulation (EU) 1308/2013 establishing a common organisation of the markets. I hold policy responsibility in DAERA for EU marketing standards for a number of agricultural sectors, such as poultry meat, eggs and hemp marketing. I work alongside my colleague Samantha Stewart, whose remit includes responsibility for beef and pig meat policy and marketing.

The proposal under consideration today implements a range of changes that emanate from the European Commission's Vision for Agriculture and Food, which aims to ensure a competitive, resilient and sustainable EU agriculture sector. The regulation that is being amended, 1308/2013, is commonly referred to as the "common market organisation (CMO) regulation". It covers a wide range of agricultural policy areas.

Many of the proposed amendments do not fall under the Windsor framework, including those that relate to the EU school schemes for fruit and vegetables and milk, rules on sectoral interventions and the availability of supplies in times of emergencies and insecurities. However, there are three key proposals that fall under annex 2 of the Windsor framework: the addition of agricultural products to the list of products to which marketing standards may apply; broader hemp import rules; and restrictions on the use of some meat-related terms.

First, the CMO regulation is amended to add agricultural products to the list of products to which marketing standards may apply. "Marketing standards" is the collective term given by the European Union to a range of sector-specific rules that include establishing definitions; setting minimum product standards; production methods; sales descriptions; production categories; and labelling requirements. They can apply at all stages of the marketing chain and are intended to protect consumers and to facilitate the trade of applicable goods on the single market.

Products that are currently subject to marketing standards include fruit and vegetables; hops; eggs for eating; hatching eggs and chicks; olive oil; poultry meat; and spreadable fats. Some examples of a marketing standard are the criteria for grading class A and class B eggs on the basis of their quality and weight or the definition of a chicken breast fillet. The new products added by the proposal are protein crops, such as dried leguminous vegetables — such as peas, kidney beans and lentils — and soya beans, and beef, pig meat, sheep meat, goat meat and cheese.

The proposal does not create the new marketing standards, as those would be outlined in potential future implementing legislation, if the Commission chose to exercise the powers in the future. The EU's current marketing standards requirements vary widely from product to product. Therefore, the details on the specific marketing standards for each of the proposed new sectors or products are not known at this time.

The second key proposal that applies under the Windsor framework is to expand the range of hemp products — products derived from low tetrahydrocannabinol (THC) hemp — that can be imported into the EU. In addition to raw true hemp and hemp seeds for sowing or not for sowing, it will now include other parts of the hemp plant. That includes the flowers and leaves of the plant. The Commission is seeking to ensure that all parts of the hemp plant are considered to be agricultural products in the EU. The changes to the hemp import rules are to align with the addition of those same hemp products to EU production and marketing rules to ensure consistency.

Those production and marketing articles do not apply under the Windsor framework. The THC content of imported hemp, hemp seeds for sowing and other parts of the hemp product are limited at 0·3%. A derogation is also in place to include the importation of high-THC products for medical and scientific use. THC is the principal psychoactive constituent of cannabis.

We are advised by the Home Office that, under the current UK drug law, the importation of the other parts of the hemp plant, such as flowers and leaves, regardless of the THC content, would still be prohibited for anything other than scientific or medicinal purposes, which would require a licence from the Home Office.

The remaining key proposal made by the regulation is to provide a new legal definition of "meat" and "meat products" and to restrict the use of 30 meat-related terms to products derived exclusively from meat or composite products where no non-meat takes the place of any meat constituent. Those include terms such as "chicken", "brisket", "drumstick" and "bacon", but, notably, terms such as "steak", "burger" and "sausage" are not listed.

Dr Aiken: Sorry, just to get it right in my mind, does that mean that they are not allowed to use the terms "steak", "burger" and "sausage"?

Ms Swann: "Steak", "burger" and "sausage" will continue to be allowed, but things such as "chicken", "brisket" and "bacon" will not be.

Dr Aiken: "Bacon"? OK.

Ms Swann: Our assessment of each of the three proposals is that it is unlikely that they would have a significant impact in Northern Ireland. In particular, the main impact of many future marketing standards or restrictions on the use of the meat terms is that the requirements would apply to all such products produced and sold in Northern Ireland. Northern Irish producers of applicable products intended for sale here or in the EU would have to comply with the new requirements.

The local agri-food sector is heavily weighted towards beef and milk production, which, combined, make up over half of the agriculture sector's gross output. It is estimated that cheese production accounts for between one fifth and one quarter of the milk produced. Pig meat represents around one tenth of output, and sheep represents around one twentieth. It would mainly be our local beef, pig meat, sheep meat and cheese sectors that would potentially have to comply with any new marketing standards. What those standards are and whether they would require changes to current production and marketing practices is not known at this stage.

The Department does not collect data on Northern Ireland food producers that produce or sell meat alternative, vegan and vegetarian products, as those are not agricultural products. Anecdotally, we are aware of some producers, but we are not currently aware of any products being sold that would not comply with the meat-related proposals.

The requirements would not apply to products moving from GB to Northern Ireland under the Northern Ireland retail movement scheme (NIRMS) or to Northern Irish products heading for sale in GB. However, the requirements would still apply to products moving outside of the scheme. The largest number of consignments of the new marketing standards products that move from GB to Northern Ireland outside of NIRMS are of cheese and curd, representing nearly three quarters of the total, with beef and pig meat making up the bulk of the remaining quarter. There are only a handful of sheep meat, goat meat and protein consignments. When it comes to the meat-related terms, no specific commodity code is linked to meat alternative, vegan or vegetarian products, as their composition and ingredients can vary. However, we expect that the majority of such products could continue to be moved under NIRMS.

Of the local agriculture sector's output, sales of milk and milk products, which includes cheese, are split evenly between UK and EU sales. UK sales of beef and sheep meat represent over four fifths, and EU sales under a fifth. EU sales of pig meat represent around a tenth, with the rest heading mostly to GB. As with imports, the Department does not collect data on Northern Ireland food producers that produce and sell meat alternative, vegan or vegetarian products. If the regulation did not apply, Northern Ireland producers of applicable products intended for sale in the EU would still have to ensure that their products complied with EU requirements but not if those products were to be sold here or in GB.

For marketing standards in general, having standardised production or accepted definitions for certain agricultural products can facilitate trade and be helpful for consumers and purchasers, especially in the case of distance selling or where the purchaser is unsighted of the goods themselves. However, the Department is aware of no consumer body or industry representative calling for greater regulation of the agricultural products to which the new marketing standards may apply.

Similarly, the use of certain terms, such as in the proposal for meat-related terms, could help to ensure that consumers are well informed on food products and are not misled. The Food Standards Agency in Northern Ireland, which is responsible for general food labelling and food information for consumers, states that information, including that in relation to a product's properties or composition, shall not be misleading. Therefore, it could be argued that the proposal on meat-related terms merely solidifies that requirement. As with the new marketing standards sectors, the Department is not aware of any consumer body or industry representative requests for greater regulation on the meat-related terms, nor has the Department received any complaints that consumers have been misled by the marketing of non-meat products.

I hope that you found the overview of the proposal useful. Thank you for your time. We are happy to take questions.

The Chairperson (Ms Ferguson): Thank you, Samantha. Do members have any questions?

Mr Martin: Thank you to the Samanthas. I will take you to the questions that you replied to. I will walk you through a couple of them, if that is OK, in order to help me to get some clarity on some of the issues.

Question 3 asked about the impact of labelling changes and how many businesses may be affected. The answer notes:

It goes on to mention other local processors and cites 178 businesses, although those might process more than one product, I assume, which adds up to about 250 businesses. Are you saying that that is the quantum of businesses to which the new labelling regime may apply?

Ms Swann: That is our best estimate on the basis of the data that the Department holds. It is worth noting that we do not know what the labelling requirements will be at this time. Those will come about through more specific legislation, probably sector by sector. It may be that no changes are required and that what producers are already producing will be in line with the requirements. Potentially, however, according to our data, those are our best estimates.

Mr Martin: Yes. That takes me to the next paragraph, which you have just covered off. I take your point that we do not know, but, from the Committee's perspective, we have to look after the best interests of producers in Northern Ireland. We have to consider, at least in this case, the worst-case scenario, which is that the labelling requirements come in and apply across the board. From our perspective, it is about getting an idea of how widespread that is and how deep an issue that would be for the people whom it affects.

I turn to your answer to question 7, where you state:

Are you saying that no one has approached you to say that they would really like the new standards? Is that what that means?

Ms Swann: Yes, that is what it means. Nobody has approached us.

Mr Martin: OK. No one has come to you saying that they would really like that change.

Ms Swann: No.

Mr Martin: OK. I want to stay on that one. In the next paragraph, you state:

You mentioned that earlier. Are you suggesting that consumers are currently being misled? Surely the Food Standards Agency would ensure that that is not the case. It was a curious way of framing that statement.

Ms Swann: That is the reason behind the proposal. It is to stop people being misled. The Food Standards Agency is responsible for the food information in consumers legislation. It already ensures that consumers are not misled by labelling. The proposal would reinforce that.

Mr Martin: Yes. Do we need the regulations in order to make sure that people are not being misled? Does that make sense?

Ms Samantha Stewart (Department of Agriculture, Environment and Rural Affairs): I understand where you are coming from. That is the policy intent, and the argument behind the policy is whether those terms mislead by their nature. I do not think that many people are confused.

Mr Martin: I get that. I think that you have grasped the tenor of my argument. I would say that, currently, people are not being misled, because the Food Standards Agency would make sure of that and would take action. I am not really sure how, if people are currently not being misled, relabelling stuff will suddenly mean that they will not be misled in future. That is my perspective.

Ms Stewart: Creating additional protections for those terms is about strengthening the position of the farmer. That is the policy driver behind that.

Mr Martin: OK.

Dr Aiken: Thank you to both Samanthas for coming in. I want to focus on some of the questions.

First, the UK Government produced an explanatory memorandum (EM) that said that there would be only a limited impact. I tend to get nervous when the British Government talk about a "limited impact": impact on whom? That concerns me.

We have had some of the answers, and thank you for those. We are talking about 250 businesses, which accounts for a lot of the agribusiness sector. A significant number of businesses will be affected by this. When you talk about "consignments" —1,176 consignments a month — what volume and value does that represent? A consignment could be anything from a container full to one parcel.

Ms Swann: It is not recorded as a volume. It is just about consignments, and we do not hold that data.

Dr Aiken: I am thinking about the cheese business. They send container loads of stuff to places such as Street, in England, to be turned into cheese and all the rest of it.

One consignment could be 20 containers.

Ms Swann: Potentially.

Dr Aiken: OK. So, even though there may be 1,176 consignments, we could be talking about an awful lot of stuff.

Ms Swann: Potentially. We do not know.

Dr Aiken: I do not want to put words in your mouth. I just wanted to know whether you had that data. It might be useful for the Committee. I would at least like to get an indication of the rough value of those consignments and what volume we are talking about, because that is important.

Basically, anything that is produced to go to the EU has to have a change of labelling. If it goes to GB, it has to have GB labelling on it, because the EU labelling will not be compatible with the GB labelling, will it?

Ms Swann: Under the UK Internal Market Act 2020, what is produced in Northern Ireland to EU standards will be allowed to be sold in GB under EU rules.

Dr Aiken: It will still have to have GB labelling, because there is no way that Tesco — other supermarket chains are available — will take something that has "EU" plunked on it but does not have a similar GB designation on it as well.

Ms Stewart: My understanding is that, if something is produced here, it will be accepted in GB with the current EU labelling that NI producers use.

Dr Aiken: OK. I wonder how the markets in England, Scotland and Wales will take to stuff that comes through, considering that there have already been questions about products from Northern Ireland that are not deemed to be British. That has been a problem. I have a concern about that and would not mind having some information about it.

Where does the "Not for EU" labelling bit come into it? If people produce something solely for GB and Northern Ireland, they have to stick a "Not for EU" label on it, do they not?

Ms Swann: Yes. If a product is produced and labelled with a UK label, it is allowed to be sold in Northern Ireland with that label, but it has to have the "Not for EU" label on it as well.

Dr Aiken: So, even though it is the same stuff, it will have the "Not for EU" label on it, and the only difference will be that they will take the "Not for EU" label off it and keep the same label on it and send it to the EU.

Ms Swann: Sorry, can you say that again?

Dr Aiken: At the moment, if something is produced for Northern Ireland and GB, but particularly for Northern Ireland, it has to have a "Not for EU" label on it, does it not?

Ms Swann: Yes.

Dr Aiken: Therefore, if it is going to the EU, even though it is the same lump of cheese, you will take the "Not for EU" label off it, and it will then be fully acceptable in the EU, because it is made to the same standards.

Ms Stewart: It is GB to EU.

Ms Swann: For some commodities, the labelling differs. Some of it has to be specified on the product, but some of it is just shelf labelling or pallet labelling, as opposed to labelling on the specific product. How that works will depend on the product.

Dr Aiken: Have we had any indications from industry of the likely cost of that?

Ms Stewart: There is no specific detail in the proposals. There is nothing to ascertain cost. Beef has marketing standards in place. Sheep meat and pig meat do not have those at this point. Until we see the proposals from the EU — if there will even be proposals from the EU — on how it will apply the marketing standards, it will be difficult to quantify.

Dr Aiken: When we talked about designations, you mentioned that the word "bacon" would not be allowed to be used, but "bacon" is written on the list, thankfully.

Ms Stewart: You will not be able to have "vegan bacon".

Dr Aiken: Right. It has to be meat. You could not have a vegetable sausage roll.

Ms Stewart: Sausage is not covered under the proposals.

Dr Aiken: So you could have a vegetable sausage roll.

Ms Stewart: Yes, under these proposals.

Mr Brooks: Steve has clarified the issue that I was going to ask about. There was some commentary in the media around vegan and vegetable sausage rolls and burgers. You have clarified that they will not be affected as some may have envisaged.

Ms Stewart: It is probably helpful to say that there are two proposals to deal with those terms. There is the one that is in front of you now and one that you previously considered —2024/577 — which is on strengthening the position of farmers in the food supply chain. That is the one that deals with the sausage terms. That is still in there. It is with the EU.

Mr Brooks: Thanks for that clarity; I appreciate it. Steve has dealt with that issue, but it is another case of handing over control of marketing issues to the EU before we know what secondary legislation will bring. It is unsatisfactory, but there we go.

Mr Tennyson: Thank you for your evidence. It has been really clear and helpful.

Is this likely to intersect with the sanitary and phytosanitary veterinary agreement that is coming forward? Is any harmonisation in that space likely as a result of whatever is negotiated?

Ms Swann: Obviously, negotiations are ongoing, but I think that it has been in the public domain that marketing standards are in the scope of those negotiations. Should they be included, there will be dynamic alignment with those marketing standards across the UK.

Mr Tennyson: That is helpful, Samantha. Thank you very much.

That is me, Chair.

Mr Martin: That assumes that alignment is possible.

I just want to be sure about this: if the standards come in, we can still have vegan sausages but not vegan bacon: is that right? OK. At some point in the future, however, we may not have vegan sausages either.

Ms Stewart: It depends on the sequencing and what is in the proposals.

Mr Martin: There is stuff coming down the tracks. OK.

I am stunned. It is nothing to do with you. I am just stunned by the fact that that is happening — that you can have that level of dichotomy between two products that are both meat-based. I am not a vegetarian, but I assume that vegetarians want to eat something that is kind of like bacon. They will be able to eat one product but not the other — or they can eat both, but they will be called different things.

I will leave it there, Chair. Thank you.

The Chairperson (Ms Ferguson): Are there any other questions, members?

Mr Brooks: Can I get clarity that one is about a cut of meat rather than a processed product? They are basically talking about something — you mentioned brisket — that is seen to be a specific cut of meat. Bacon might be seen to be a specific cut of meat, whereas the processed product might not; it is produced from the meat. Is that right?

Ms Stewart: Potentially. We are trying to ascertain that.

Mr Brooks: Fair enough. I will not add to the confusion.

Mr Martin: I know the feeling.

The Chairperson (Ms Ferguson): No other members have questions, so I thank Samantha Swann and Samantha Stewart for your written response and your responses to members this morning.