Food for thought – Safeguarding your business from food fraud
25 April 2017
New EU rules aimed at tackling ‘food fraud’
Last month, the European Parliament adopted the new Regulation on Official Controls which will strengthen the ability of Ireland and other Member States to deal with potential health risks to humans, animals and plants and to restore consumer trust in food chains.
The new regulation introduces a range of different measures, all aimed at raising health and safety standards across the whole agri-food chain. The rules will be phased in with the majority being applicable from December 2019.
What are official controls and who do they apply to?
Official controls are checks performed by Member States to ensure that businesses comply with agri-food chain rules. These rules concern the quality and safety of food and feed, plant health, animal health and welfare. These rules also apply to products entering the EU from third countries.
Operators at all stages of food production, processing and distribution that handle animals, plants, food, feed, goods, substances, materials or equipment will be subject to the new rules. The new rules also require Competent Authorities to set up and keep an up-to-date register of operators subject to official controls. For the purposes of this list, operators will need to provide certain details to the Competent Authority.
Key changes introduced by the new regulation
- The new regulations provide that a risk based approach will be taken to enforcement. What this risk based approach means in practice is that, when planning the frequency and performance of official controls, Competent Authorities (the Food Safety Authority in Ireland) must take into account the operator’s past record of compliance, the reliability of the operator’s own checks and the likelihood that consumers might be misled about the product. Effectively, this should mean that those operators with strong internal controls can reduce the inconvenience and cost associated with official controls.
- The new regulations specifically target food fraud by requiring that, during official controls, checks are carried out to ensure compliance with marketing standards for agricultural products.
- The new rules clarify that Competent Authorities have the power to carry out official controls on all operators at all stages of production, processing, distribution and use.
- Online shopping will be regulated by mystery shopping techniques with officials ordering products without identifying themselves and using the purchased products as samples.
- The new regulations introduce a common framework for carrying out border controls on animals and goods entering the EU. Again, the import control system will be risk based and the list of animals and goods subject to systematic controls at borders will be based on current rules.
- Official controls will be performed without prior notice, therefore, operators will need to ensure they maintain high standards all year round.
- There are a number of options open to Competent Authorities in terms of the fees to be levied on individual operators. New transparency provisions will require
Member States to make public details of how they have calculated and collected their fees. This should avoid excessive fees being charged on individual operators.
- The new regulations will introduce strong financial penalties designed to have a deterrent effect. Fines will be calculated in accordance with the expected economic gain of the deception/fraud or a percentage of the turnover of the operator.
- In order to improve transparency, Competent Authorities will have the option to make information regarding the outcome of official controls on individual operators publicly available. However, in such cases, the individual operator must be afforded the opportunity to comment on the information and these comments must be reflected in the information published.
What does this mean for operators in practice?
During official controls, operators will be required to assist and cooperate with the staff of the Competent Authority. To the extent that it is necessary to perform the official controls, operators must give Competent Authority staff access to their equipment, means of transport, premises, computers, documents and any other relevant information and any animals and goods under their controls.
Due to the risk based approach to enforcement and the lack of prior notice for official controls, it will become even more important for operators to put in place strong internal controls. This will avoid operators being caught out by random checks and subsequently being flagged as a high risk operator.
The consequences of falling foul of the regulations make it even more important for operators to ensure compliance. Heavy financial penalties and the possibility that any negative outcome may become public knowledge, mean that the consequences of non-compliance could be hugely detrimental to an operator’s reputation and bottom line.
Operators will however benefit from reduced administrative burdens, more efficient processes and a more consistent approach across the EU.
How can we help?
We will be watching closely to see how the Food Safety Authority of Ireland reacts to the new rules and to see how the food industry will adapt to the changes. As populations become more health conscious, it is even more important for the food industry to take measures to safeguard their business by ensuring that the new rules are complied with. Consumers are becoming more interested than ever in nutritional content, animal welfare and organic ranges. Food manufacturers, distributors and retailers are feeling the pressure to meet both consumer and regulatory demands whilst securing the future success of their business.
Being aware of the burning issues and providing reliable and timely advice is something that we pride ourselves on. Our Health & Safety Group at Eversheds Sutherland focuses on pro-actively managing all aspects of health and safety, including food safety. We have experience in regulatory compliance, performance of health and safety audits, due diligence on health and safety matters, product safety and liability issues, nuisance claims and environmental breaches.