Unrevised transcript of evidence taken before

The Select Committee on the European Union

Agriculture, Fisheries, Environment and Energy (Sub-Committee D)

Inquiry on

FOOD WASTE PREVENTION

Evidence Session No. 3 Heard in Public Questions 25 - 38

WEDNESDAY 30 OCTOBER 2013

10.30 am

Witnesses: Andrew Opie, David Bellamy and Andrew Kuyk

USE OF THE TRANSCRIPT

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Members present

Baroness Scott of Needham Market (Chairman) Lord Bowness Lord Cameron of Dillington Baroness Howarth of Breckland Baroness Parminter Lord Plumb Lord Renton of Mount Harry Lord Whitty Lord Williams of Elvel ________________

Examination of Witnesses

Andrew Opie, Director of Food and Sustainability, British Retail Consortium, David

Bellamy, Environment Policy Manager, Sustainability Division, Food and Drink Federation,

and Andrew Kuyk, Director, Sustainability Division, Food and Drink Federation

The Chairman: Good morning, and thank you very much indeed for coming to talk to us

this morning. Indeed, thank you for the written evidence. I think it is because we found that

so interesting that we are really quite keen to talk to you today. You have a list of interests

that have been declared by the Committee Members. If Committee Members do have an

interest in the topic covered by this inquiry, they will declare it the first time that they speak.

This is a formal evidence session of the Committee, so a full shorthand note will be taken

and put on the public record. We will send a copy of the transcript over to you for the

correction of any minor errors. Of course it is on the record, so we are being webcast live

and it will subsequently be accessible via the parliamentary website. Again, you are very

welcome.

Perhaps we could start with a few short introductory statements, just to set the context of

the British Retail Consortium and the Food and Drink Federation: who you are, how you

are organised and who your members are. I think that would be very helpful to the

Committee. Thank you.

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Andrew Opie: Shall I start? I am Andrew Opie, Director of Food and Sustainability Policy at

the British Retail Consortium. We are the trade association for retailers in the UK and, as

we are talking specifically about food waste today, it is probably worth noting that we have

all of the major retailers as part of our membership. Our smallest food member would be

SPAR, right up to Tesco as our largest member and everybody in between—if that makes

sense—and we account for about 93% of the grocery market. Obviously, we take a huge

interest, as our members do, in food waste, both in terms of the sustainable issues in terms

of ensuring that we reduce food waste through the supply chain but also the part that we

play directly in our relationship with consumers to help them manage their food waste. That

has never been more important than it has been in the past few years where we have seen

rising food prices.

The Chairman: Very helpful, thank you.

Andrew Kuyk: Thank you. My name is Andrew Kuyk. I am Director of Sustainability at the

Food and Drink Federation. We are a trade association representing food and drink

manufacturers in the United Kingdom. I should add that the drink in our title is the non-

alcoholic variety. Food and drink manufacturing is the country’s largest manufacturing sector.

We directly employ 400,000 people but are part of a food chain that employs some 3 million

people. We contribute something like 15% or 16% of the total manufacturing output and we

also have a very strong export performance. Our members are mainly the larger branded

manufacturers, but we have a number of smaller manufacturers as well.

Some of our members do what in the jargon is “own label” or “private label”—that is to say

they manufacture directly for Andrew’s members—but it is a combination of those two

types. I should add that we do not represent the catering and hospitality sector. There is a

different organisation that represents them; we are the manufacturing bit of the food chain.

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The Chairman: Lovely. That is very helpful. Thank you. Did you want to say anything, Mr

Bellamy?

David Bellamy: Nothing to add to that, thanks.

Q25 The Chairman: All right. That is very helpful. Thank you very much. Perhaps I could

kick off by asking you about the question of targets because, as we know, the EU is thinking

about a 50% reduction in edible food waste. I am interested in hearing your thoughts about

the impact of targets, and the issues around how, in effect, you would impose them across

the food chain, whether they should be imposed at all, and whether they should be binding

or aspirational.

Andrew Opie: For us, the starting point would be the commitment all of our major

members have to the Courtauld agreement in the UK, where targets are set and have been

set. We are in the third phase of that commitment now and it covers both. Andrew can talk

about food manufacturers who are members of that as well. At the UK level, we find nothing

wrong with targets being set. You will be aware that those are set in conversation with all

the four UK Governments. They are challenging. They tackle both household food waste and

waste in the supply chain and they give our members a focus within their businesses that

they can work to. The credibility of having the independence of WRAP to oversee and

monitor those figures also lends importance of the Courtauld target. Targets in themselves

are not a bad thing, but that is very much at a UK level. The reason I say that is the work

that the UK has done has been pretty advanced in terms of assessing food waste, looking at

what would be food waste, where it is created within the supply chain, and then setting, as I

said, reasonable targets with both the Governments here and industry to meet those

targets. Our feel is that Europe is not in the same place as that, in terms of awareness of

food waste, definition of food waste or even what the baseline would be to then set targets

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from. We would be more sceptical about that, but that does not stop our activity here in

the UK not having those targets in the EU.

Andrew Kuyk: Yes, I would broadly follow that. I will add a word about voluntary targets. I

think there is a difference between a mandatory target and a voluntary target. We certainly

think that, through WRAP’s Courtauld commitment, the United Kingdom has already

achieved quite a lot in terms of preventing and reducing waste.

I would again echo what has been said about Europe. We perhaps do not take sufficient

account of the diversity throughout Europe, not just in terms of the cultural attitudes to

food, the different diets, even to some extent the differences in patterns of retailing and so

on. I think we have a more concentrated retail sector here than in some parts of Europe.

Certainly numerically, food manufacturing businesses in most of Europe are much more

dominated by small and medium-sized businesses than they are in the UK. There is a rather

different profile, so I think the idea that there could be a top-down mandatory target that

would suit everybody would be quite difficult. Also it would not take account of the fact that

some Member States, like the UK, are already some way down this journey, so a one-size-

fits-all target would bear differently on people at different stages.

Having said that, on the aspirational target of halving edible food waste, we think by that they

mean avoidable food waste. We may come on to that in the conversation because there are

different types of food waste occurring at different points in the chain. Again, that is a reason

why, with a single figure target, it is quite difficult to assess what would be the right level for

it, how it would be monitored and so on.

A final point I will make by way of introduction is that, if the approach that we are adopting

works and works effectively, what we would not want to do is have a layer of regulation or a

binding target that would add cost and complexity to that. I think we are all very aware of

questions of affordability of food at the moment. Of course that is one of the drivers to help

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reduce food waste, because food waste is a cost both for households and for businesses, so

there are very clear economic drivers as to why we would want to do this anyway. I think

we are slightly nervous of the idea of a binding target set at European level. We are not sure

that it would drive the improvements that are necessary and there is a risk that it could add

cost and complexity.

Q26 The Chairman: Thank you. It occurs to me that, if I was a decision-maker at

European level, I might look at the UK and say, “Fantastic. They are doing great things”. On

the other hand, you might look at other countries and say, “Well, we are going to have to

regulate because they are not doing anything”. You were talking about the economic benefits

of this sort of behaviour both to business and to householders. To what extent are you able

to share that information? Clearly, if it makes economic sense to take these actions, that

ought to be the incentive for businesses elsewhere in Europe, rather than regulation.

Presumably, you all do represent people who work outside this country and operate in

Europe, so I guess some of your members have that broader perspective, too.

Andrew Kuyk: Certainly, some of our members are companies that have manufacturing sites

across Europe and have corporate policies. WRAP has done some good work in quantifying

the cost to the average household, whatever that means. The figures range somewhere

between £500 and £700, depending whether you are talking about a household or a family.

In business terms, again there are some figures there. I think for individual businesses there

may well be some commercial confidentiality issues around disclosing exactly what it is or is

not doing, but I think the drivers are absolutely clear. One is resource efficiency. If you are a

business and you are spending money buying raw materials—buying things to add value to

turn into safe, affordable, nutritious products for consumers—why would you want to waste

something that you had spent money buying? You would want to optimise the value of

everything across your process.

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The Chairman: Why is that not being done elsewhere then, in your estimation?

Andrew Kuyk: I could not answer authoritatively on why that is not being done. I think

there are probably differences in the profile of businesses, perhaps smaller businesses. As I

said, in some parts of Europe the profile of the manufacturing sector is rather different.

There are rather more small businesses. They may be slightly less cost conscious in the way

that they approach these things from a bigger, more sophisticated business. There may also

be different expectations around what people would expect to spend on food, how they

would value food as part of household budgets and so on, but I do not think I am really in a

position to say. I think those drivers will be there for any business anywhere in Europe. Why

the issue has not had quite the leverage that it seems to be having in the UK, I really do not

know. Andrew, do you have anything to add?

Andrew Opie: I do not have anything to add to that. Just one point I would add is that, yes,

we do operate in Europe, so some retailers do have stores there. Of course, our supply

chain extends through Europe and, therefore, the focus we have—although most of our

food is sourced here in the UK—is global, in terms of sustainable production right through

the chain, whether the food is produced in Europe or not. Much of the work that we do

with suppliers here is also transferable to European countries or even beyond.

Q27 Baroness Parminter: Andrew mentioned the issue of definition and I am going to

ask some questions on definition and monitoring. You were quite clear in your submissions

on your positions on the definition of food waste, and I note that the FDF, in the absence of

what it says is a clear definition, supports the FAO position and also the FUSIONS project. If

you would like to make any further comments on your views on the definition of food

waste, I am sure we would welcome that.

Andrew Opie: I might pass the floor to my colleague David on that.

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David Bellamy: Yes. You are quite right in pointing out that we are currently supporting the

FAO definition. It is the only agreed definition that is available. It underpins the European

food waste declaration, which our European association, FoodDrinkEurope, produced in the

summer of this year. You are also right to point out we support the moves within Europe

within the FUSIONS project to agree an EU definition for food waste.

The FAO approach is that any food intended for human consumption that does not get

consumed is deemed to be food wastage. Wastage comprises food losses at the agricultural

and processing end of the food chains, and food waste is primarily generated at the retail and

consumer ends of the food chain. The advantage of that approach is it enables you to look at

more prevention and reduction of food waste across the whole of the agri-food supply

chain. Under the Waste Framework Directive it is a rather narrower approach in terms of

how food waste is defined. The focus is much more on the management of wastes as they

occur. In that respect, under the Waste Framework Directive, as I understand it, some of

the wastes that arise on farms do not count as waste and, therefore, are not included as part

of an overall approach to try to prevent food losses from occurring. We think it is a good

approach to try to look right across the chain at where food losses are potentially occurring,

whether they are regarded as waste or not in a definitional sense, because obviously that is

an indicator of the efficiency of the whole supply chain.

That is why, through our European association, we are supporting the FAO approach to

defining food wastage as opposed to food waste. The advantage of that approach is that it

does take into account what is avoidable and non-avoidable through the edible concept. It

recognises that parts of animals and such that are not normally eaten do not count as food

wastage, which is right.

Lord Renton of Mount Harry: Perhaps I misheard you. Did you say that waste on farms

was not in your calculations? If so, why not?

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David Bellamy: I think it is the approach under the Waste Framework Directive that

where, for example, a farmer has a cancelled order for a field of lettuce, something of that

sort, he can plough it back into the field and that does not necessarily get counted as food

waste under the definition in the Waste Framework Directive.

Lord Renton of Mount Harry: Yes, but ploughing something back into a field—I see what

you are saying, it is ploughed back but not used—does affect you anyway.

David Bellamy: If you are looking at a broader approach, and trying to work out the

efficiency of the whole agri-food supply chain in providing food for human consumption, that

is a relevant issue to consider. It may be that there is a more effective way of managing that

part of the supply chain to save that particular crop from being ploughed back and obviously

not being used for its intended purpose. It is not necessarily to label things as “waste” or

“non-waste” but to take a much broader view of the whole supply chain and where

efficiencies and inefficiencies are occurring.

The Chairman: We ran out of time in our evidence session with the department last

week, but we have asked them to just give us some extra information on this relationship

between the Waste Framework Directive and the definitions contained in that and the

extent to which they interact. I think it goes to the heart of that.

Q28 Baroness Parminter: The second half of my question is around monitoring. Once

you have a definition, if you are going to drive waste down you then have to be able to

monitor it. Is there anything more that you think needs to be done in terms of assisting

companies to monitor their food waste? Of course, you will be aware that the European

Commission is looking to amend the directive on non-financial reporting for companies. Will

that help in any way? You may also be aware that in Norway the Government are leading a

voluntary initiative with all the major retailers to report volume of food wastage, which is a

good way of sharing best practice. Again, you will be aware in the UK that for the first time

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Tesco—with what appears to be limited effect on its share price—is revealing the volume of

food waste, which I think is a very positive step. I would welcome all of your comments on

that important area.

David Bellamy: You are quite right to point that out. A very important part of the food

waste debate is to have a sound evidence base on which you can judge future policy.

Through our own five-fold environmental ambition, which is the FDF flagship brand for

action on the environment, we do encourage all our members to monitor their waste

arisings and we do periodic waste surveys to record what waste does arise at their

operational factories. Obviously, through the WRAP Courtauld commitment, again there is a

lot of evidence collected by way of data, and WRAP verifies and publishes that information

on a regular basis. That has provided us with quite a sound body of evidence in terms of

what has been achieved, both individually by manufacturers and retailers and then

collectively by industry and consumers, in terms of saving food waste over the life of

Courtauld.

Andrew Opie: I would echo David’s comments around the benefits of the Courtauld

commitment, which has been running for a number of years now. It is all around monitoring

and publishing those figures. The figures that are submitted by our companies are based both

on their own operation—in other words, at the retail end and the distribution end—and

through the chain. That is one of the targets in Courtauld. They are able to give those

figures. Those figures are verified independently by WRAP and will be published. In fact, I

think the final figures for Courtauld 2 will be published very shortly. We feel that is a very

transparent way to demonstrate how the companies collectively are meeting their

obligations.

Q29 Lord Bowness: Good morning. This question follows on the issue raised by Lord

Renton. Certain reports on food waste have cited UK research suggesting that retailer

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standards relating to the size, shape and blemish criteria of fruit and vegetables can reject up

to 40% of edible produce, which then do not reach the marketplace. We have heard from

other people that contractual arrangements on levels of production can lead to food waste

early in the chain. Perhaps you could comment on that generally. How would you respond

to suggestions that retailer standards and contracts result in waste on the farm? Added to

that, are they more stringent than the EU regulations themselves?

Andrew Opie: I would definitely welcome the opportunity to talk about the work that we

are doing to reduce waste at the farm level—I can talk about that in a moment—but

probably the starting point for this is that, while it is talked about as retailer standards, of

course, we need to remember that the consumer has a role in this as well. For example,

some of the marketing standards were relaxed in 2009. We as an organisation and our

members had lobbied in Europe for a complete relaxation of the standards to allow us to

sell more of the crop. You will be aware that if a retailer does not meet one of the standards

they will be fined for that, so there are EU marketing standards that underpin lots of those.

The problem in some ways is that, even if you were to say, “Right, I am going to take the

entire crop. Whatever it looks like, I am going to put it on the shelves”, what would

probably happen is you would just transfer the waste further up the supply chain. If you have

ever observed consumers in a store, for example, going through loose produce, you will

note the way that they select produce for themselves. Growing awareness of food will

definitely help. We are seeing that, and the way that retailers promoted what might be

termed “ugly fruit” when that relaxation happened has definitely helped in the value ranges.

You will have seen much of the promotion was on “great value for money”, “might not look

as good”, and that is a growing market—but it still has to grow a long way. One of the

concerns for consumers would be that their perception of food is in some ways based on a

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cosmetic view of it. What they do not want to do is create waste in their home. They want

value for money as well. So it is a case of working with consumers to increase that.

I think the interesting part that retailers can play in the mean time, which is what we are

doing, is to look at how we can take the whole of the crop even if it does not all necessarily

end up in bags on the shelves. I will give you the example of carrots. Many retailers will be

doing the same practice. They will buy virtually the whole crop of carrots. They will look to

grade. The best carrots will be graded in the bags that we would buy for our carrots that we

prepare at home. The next level down you can look at things like carrot batons, which

increasingly has been a trend in UK retailing—prepared vegetables, basically. So you take

those that might not have met the specification, you chop them up into batons and you sell

them as batons: added value for the farmer and a good use of waste. You then may be able

to use some of the bits that are left over for things like soups and purées, so that is your

third way. Or you might be able to use them in ready meals. Then finally, you might be left

with the carrot tops, which you might not be able to find some use for but that might have

to go back into animal feed, so you find a use for it that way, or perhaps by anaerobic

digestion or composting.

What retailers are doing is realising, okay, we need to work with the market with an

understanding that realistically 100% of consumers will not buy everything that you put on

the shelves because that is just the way it works. So how do you find a use increasingly for

the whole of the crop or the whole of the animal? You will have seen some of the

statements around perhaps popularising some of the cuts or using cuts in processed

products as well. That is where the trends will go and that is how we are going to work with

farmers to make the most of their crops.

Q30 Lord Bowness: Can I just follow up on that? I note you say the consumer has a role

and, of course, the consumer has a role, but does the retailer not have a larger role?

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Because it is a huge marketing exercise. You can present the ugly fruit chucked in a bin and

the rest of it is presented highly packaged, very glitzy, so much so that I suspect the

consumer pays more attention to the presentation than to the price. If you were pushing the

price as the advantage and displaying it at least as favourably, would you not go a long way

towards securing public acceptability of what you now say the consumer is going to reject?

Andrew Opie: I think that is what we have done, particularly since 2009 after the relaxation.

If you look at the retailers, you will see a sub-brand has been created exactly around this,

around the packaging.

Lord Bowness: I obviously go to the wrong supermarkets. All I am saying is that it is not

particularly obvious and it is not particularly pressed.

Andrew Opie: I would disagree with that. But what I would agree with you on is that it is a

market that needs to grow, and that consumers need to get a better understanding of how

food is produced, what it looks like and what its nutritional value is. That is something that

retailers will continue to do in a dialogue working with farmers to promote the benefits of

that to consumers. In the mean time, until that grows, what you need to do is find out how

you can work with farmers to use as much of the crop as is possible. The last thing we will

want to hear about—because our consumers are very interested in sustainable production;

they want to know that retailers are acting responsibly in the chain—are stories around

lettuces being ploughed back in. That is not what we are aiming for. What we are aiming for

is to use as much of the crop as possible. It might not all appear on the shelves, but in the

background, if you talk to the farmers that are supplying us, they will tell you these different

streams that are being used to make use of those. It would not necessarily be sensible to put

all of that on the shelves because it would end up as waste at the retail stage, and that is

worse for the environment because by that stage it has probably been packaged and

transported as well.

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The Chairman: The sort of example you just gave sounds awfully sensible, but when you

start to think about it, this is very complex because you will have different companies making

ready meals and different companies producing carrot batons, and people sorting out the

vegetables to go in the vegetable section, and then the anaerobic digestion companies. There

would be myriad companies based right across the country that are dealing with it. In

practicality, how easy is it to organise sending bits of the same carrot to a number of

different places? How does this really work?

Andrew Opie: It is feasible if you go to the level of where co-operatives operate in the UK.

The marketing companies would take the individual farmers into the pack houses and then

on from there. Those are substantial businesses. There are not that many carrot co-

operatives and marketing groups in the UK to work with, and many of the supermarkets will

be dealing with the same companies to do that. It is feasible and if you speak to all of the

major retailers this has been one of their major drivers. They absolutely pick up your point

that we need to maximise the crop but also understand that it is unrealistic, necessarily, to

assume that consumers will buy it if we put it on the shelves. So it is feasible, yes.

The Chairman: That is very helpful. Thank you.

Q31 Lord Bowness: Do you think the EU retail action plan has a role in this? Perhaps

you could also pick up my question about whether the EU standards are more stringent or

less stringent than the retailers’ own standards.

Andrew Opie: There are only 10 EU standards left for products, so I will deal with that first.

In some ways retailers would have kept their own standards, because they know their

consumers and they know what their consumers expect, possibly for what would be

considered the highest grade of produce, whatever that looks like. The first thing you see

when you go in a supermarket is fresh fruit and vegetables, so it gives a great image for the

supermarket when you go in there. They will have their standards and they will have worked

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very closely with their suppliers to ensure that their suppliers are also looking to work as

much towards those standards to minimise waste in that perspective. Yes, they will have

standards. There are still 10 standards for various items of produce. A couple of those are

regularly wasted products or produce in this country, which include apples and tomatoes,

for example. Those are still in place and they are still enforced. I think it is the Rural

Payments Agency that would probably enforce that in supermarkets now. If supermarkets do

not comply with that, they would fall foul of those regulations. Yes, they have standards but

they would also have standards for the value ranges that I spoke about. So how can we use

more of those?

On the EU retail action plan, at the moment I would not say that its focus is particularly in

this area. It could at some point have some potential because, as you know, it does bring

together the various elements of the supply chain, but most of its discussions—in fact all of

its discussions to date—have focused on an equivalent of the GSCOP and adjudicator

approach to supply relationships that we have in the UK.

Lord Bowness: That is very helpful. Thank you. Because we are an EU committee it is

helpful to know, and I think you are confirming, that in some instances the retailer standards

are more stringent than the EU standards. Is that right?

Andrew Opie: It depends on which category of produce. It comes back to my point about

different categories of produce, I guess. There are no standards for some, but retailers will

still have some standards. It comes back to my point: the wrong appearance of food will lead

to higher food waste in supermarkets, so you just transfer the waste up the chain. The thing

to do is to work with farmers in the first place to maximise the crop at the farm level.

The Chairman: In a moment I want to bring in Lady Howarth, because I know she has a

number of questions about the supply chain. There is one particular thing I am just beginning

to think about, which I guess is the relationship between your two organisations. The large

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supermarkets have agreements where they buy whole crops from a farmer. Then, in effect,

they sell some of them directly in their own shops and also sell them on to people that you

would represent, who are making ready meals and carrot batons and so on. Do you run into

competition issues when it comes to this in terms of what is seen as a stranglehold on the

market by the large supermarkets?

Andrew Kuyk: I am not aware of particular competition issues around that. Obviously, as

Andrew said, food manufacturing is one of the routes for adding value to things that may not

be sold direct to the consumer in the supermarket: purées, soups, ready meals and so on.

For us, the appearance of the raw material is not a primary consideration. Obviously, food

manufacturers will contract with farmers in their own right for the supply of whatever raw

material they need. If there are arrangements to take—surplus is perhaps the wrong word;

let us say an alternative stream of supply—those will be normal commercial arrangements

between independent contracting parties, and I do not see a competition issue with that.

That will simply be normal supply and demand, normal market forces. The extent to which

that happens will vary according to where factories are located, what their product ranges

are, what the availability is and so on.

The Chairman: You are not aware of this as a problem?

Andrew Kuyk: I do not think it is an example of people doing anything improper across the

supply chain; if anything, quite the reverse. It is about trying to maximise value at all stages

and for all uses.

The Chairman: I certainly was not suggesting they were doing anything improper. I am just

curious as to whether there might be any real or potential competition issues, given the

purchasing power of some of the large supermarkets. If there is not a problem, then that is

good news.

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Q32 Baroness Howarth of Breckland: I think the Chair has covered the next two

questions. If I can I want to try to get into some of the other detail and, instead of repeating

the questions, try to take us further forward. One thing that has come across in much of the

evidence is that a lot of wastage at the early stage of production is really due to contracts.

This is really Lord Whitty’s question—but these questions run between the two—about

contracts where whole farm produce is agreed and then the retailer decides they do not

want part of it, cancels at an early stage and the farmer ends up having to pay for some of it.

I want to ask that part of the question because one of the things you said, in answer to an

earlier question, was that there is a real driver to optimise the use of a crop rather than

ploughing in the crop or losing it.

The other thing that concerned us—if I can do the two parts of the question—is that that

crop in production has used a whole lot of energy and water, and all the things that are

adding to climate change problems. We as a committee are keen for you to help us to know

how we can avoid some of those issues. We notice that you have been working in the

Better Retailing Climate initiative, and we wonder how you think that the roles of national

and EU authorities can help promote integration in order to tackle those problems that I

have just set out.

Andrew Opie: That is quite a long question; a very good question. If I can start going

backwards—if that makes sense—from the national level, I think there is some really good

work that Governments can do to bring all parties together. Probably the one that we

would promote the most at the moment would be the Product Sustainability Forum, which

is bringing together the whole supply chain, basically, and saying, “There are 50 products out

there that seem to be identified as volume products that could have the biggest impact in

terms of environmental production. Let us look at the chains—in the food case, from farm

right through to household—and identify some of the key criteria, one of which is waste, but

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also identify where there might be hotspots in the supply chain and, therefore, focus the

activities of the companies that come within that”. The Government and WRAP can play a

fantastic role in facilitating those kinds of discussions, and we and our members are fully

participating in that. That is already having some spin-off. Although the PSF is still working on

a programme, going forward, there are some pathfinder works particularly in this area.

Potatoes are one example at the moment, where one retailer is already working with

suppliers to look at waste in their potato supply chain.

The beauty of things like the forum is it means that those examples can then be shared with

the whole supply chain. All the other companies that are participating can learn from each

other and can also take the benefits into their own supply chain. That is the role that I think

government has. At a national level, government also perhaps has a role in a partnership

with retailers and industry to look at what it can do to help households in particular.

Industry should be tasked to look after itself, which is quite right within Courtauld. But, for

example, WRAP has a role in promoting the best way to store products, and the best way

to use products to cut food waste at a household end—and we know that about 50% of

food waste is at the household end. Again, I would say that is a responsibility that

government can pick up on a more generic basis. For me, that is the national level.

At a European level, we see less of a role necessarily for Europe. We spoke very briefly

about marketing standards, so perhaps that is one area. For us, our targets are drawn

primarily in the UK and for our supply chains into the UK. We feel the facilitation exercise

that is going on there is appropriate for us to be able to deal with that. There could be some

areas around disseminating best practice from Member States to Member States at a

European level. For example, learning from the UK example, which has been very

progressive in this area, might be one thing. We spoke about the definition of food waste at

an EU level. It would be interesting to enable them to set the benchmarks, which might lead

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to either voluntary or mandatory targets around food waste. They could again do that at an

EU level and help those Member States that have not been as advanced as the UK.

Personally, I do not think there is anything at the moment—provided the Government look

at their support for WRAP at least—that we are not doing in this country that should not

enable us to reduce waste in the UK.

Q33 Baroness Howarth of Breckland: Do you think that the dialogue that is going on

is, in fact, facilitating better contractual arrangements as well as just having a dialogue about

those issues that can help climate change?

Andrew Opie: As you are probably aware, we already have a contractual regulation placed

on all of our relationships with our direct suppliers. The 10 largest retailers are subject to

the grocery supply code of practice. That was set up purely to deal with supply relationship

issues: contractual issues. Its role was not necessarily to look at waste. Its role was to have

written contracts, all the issues around delisting and forecasting—which we can talk about in

a minute, which would pick up on one of your points—but it was not specifically to look at

food waste. It followed a Competition Commission inquiry into the operation of the grocery

market.

Baroness Howarth of Breckland: But it had implications for food—serious implications.

Andrew Opie: Yes, it did. One of the issues would be forecasting, for example, which you

might be aware is covered in GSCOP. Companies will not always know whether the sun is

going to shine at the weekend, and we are all going to have barbecues and we are all going

to be eating salad with our burgers, for example, until some period in front. They will have

flexible contracts with their suppliers, but the key is better forecasting—whether it is the

weather or consumer demand—so you can then get that back to the supplier so they can

flex their supply, particularly of short-term produce, in time to meet the demand. Within

GSCOP there are provisions that retailers do need to have a mechanism of forecasting that

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they can demonstrate that they are sharing that kind of information with their suppliers, but

obviously that only covers the 10 retailers.

The Chairman: Lord Whitty, do you want to come in now?

Q34 Lord Whitty: Well, it is on the point that, because of the rather fraught history of

the supply chain, particularly from the farmer and grower end, we do have this code now

and we do have the adjudicator. Although it does not explicitly deal with waste, it does deal

with the nature of the contract, which seems to transfer the risk—this would be the NFU’s

view—back down the supply chain rather heavily. If you overspecify or if there are too many

changes, either in quality control or in volume, effectively the risk is taken by the farmer.

That is what the code is supposed to look at. As you say, it does apply only to a limited part

of the market: the big retailers direct to the original producers. I am sure that some FDF

members have complaints about the retailers as well, but it is primarily a farmer/retailer

relationship. If waste were covered more explicitly, or the creation of unnecessary risk on

the part of the original producers, do you think that would improve the situation or do you

think that is taking the code beyond where it was intended? Also, is there a European

dimension in this, because obviously this is a fairly unique British invention and it took a long

period of gestation before we got to where we are on it? I think the role of the code in this

is quite important. We had the NFU here last week, and it is no great secret that they still

think that this is a problem.

Andrew Opie: Yes, you are quite right about the code, Lord Whitty. I think you were

involved in the development.

Lord Whitty: At the beginning, yes. It seems a long time ago now.

Andrew Opie: You will be well aware of GSCOP. No, the code is not explicitly to deal with

food waste and neither should it be. It was to react to a Competition Commission inquiry

recommendation around supply relationships and contracts. What I would say is that the

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code simply regularises what retailers want to do anyway, which is have very strong

relationships with their primary suppliers—and there are very good business reasons for

that. You will all be aware that food security is going to be a massive issue for every food

company, going forward, and it would be a foolish retailer that in some way had an unstable

supply relationship. As we know, going forward, farmers are going to be in the strongest

position in the supply chain with the growing global market and demand for food rising as

population rises. All retailers want long-term, sustainable relationships with their farmers.

One of the ways you do that is by talking about taking the whole of the crop or working

with them on added value, working with them for the long term. Therefore, the last thing

any retailer does is chop and change its suppliers all the time, but what the code does is

regularise that. It does not deal explicitly with food waste, but I think what we will find is

that the continuing strengthening of supply relationships will bring food waste absolutely

front and centre anyway. Our consumers are interested in sustainability, our suppliers want

a strong supply relationship and, therefore, it is in the retailers’ interests to drive that

agenda.

Baroness Howarth of Breckland: Why does the NFU still think that power lies with the

retailers?

Andrew Opie: You would have to ask the NFU that—

Baroness Howarth of Breckland: We did.

Andrew Opie: I am sure you probably did, but that is not our perception. As I have said

before, there are lots and lots of good examples at the moment and more to come. I am

glad you mentioned Better Retailing Climate because the next iteration will be out in

January, so we will be talking about this subject again there. There are lots and lots of really

good examples of long-term relationships with farmers that are benefiting both the farmers

and consumers: so research on things like waste, work with the Product Sustainability

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Forum, which is then transferred at farm level, which directly helps them cut their own

costs. As I have said many times before, we are in it for the long term and it is not in our

interests to have short-term relationships with our farmers.

Q35 Lord Whitty: I think the NFU and most farmers and growers would recognise that

long-term relationships are important, but it is this issue of the balance of risk. Because of

changes in the weather or changes in consumer tastes or whatever, the NFU would argue

that the nature of the contracts means that the risk is taken at the grower/producer end,

not at the retail end. In a sense, the code of practice was intended to make sure that that did

not go too far. I have to say that, for some time, the retailers did resist the code of practice

and certainly the adjudicator. Are you now happy that it is a reasonable balance from your

point of view?

Andrew Opie: We thought there was a reasonable balance already, which is why we were

not in favour of GSCOP. We made that point very clear as the Bill passed through and as

the code was discussed. The point I would make around the forecasting comes back to the

relationship that retailers build above and beyond GSCOP. It is no surprise that there is lots

and lots of work going on in research on forecasting to make sure you look at both

consumer demand and weather forecasts. All of that is shared with the suppliers so that they

build up a profile of consumer demand in order to understand their business. What that

should mean is they get a better understanding of the market and then they can cut their

waste and cut their production, particularly on these short-term salad-type crops or some of

the soft fruit, for example, which is more readily available at short notice. The key thing is it

goes above and beyond the code but it is just another thing that strengthens the relationship.

So, yes, there are provisions around forecasting and, yes, there are provisions around

written contracts, and the adjudicator will act from whenever the guidance is published later

this year. She will have the power to investigate retailers, but the operation with farmers has

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gone on before, during and after GSCOP and we do not see that changing. We see that just

strengthening going forward.

Lord Whitty: Is the nature of your relationship with farmers, for those of your members

who operate within Europe, the same in Europe as it is here?

Andrew Opie: Of course GSCOP covers all of our suppliers wherever they are in the

world.

Lord Whitty: Yes, but I mean Tesco in Budapest or whatever, which is a big operation,

would deal primarily with Hungarian and Czech farmers or whatever.

Andrew Opie: Yes, sure, but on the principle about establishing long-term, sustainable

supply chains, which give consumers the consistent quality that they expect, it does not

make any difference where you are in the world in terms of retailing. That is the strongest

part of the retail business. Having good suppliers who give consumers exactly what they

want when they come into your stores and, hopefully, give better quality and value than they

are getting from your rivals is exactly what you do. The principles about working with

suppliers wherever they are in the world apply regardless of GSCOP or the UK.

The Chairman: I need to move us on from this. I suspect we will not have an exact

meeting of minds here. I am going to bring in a farmer.

Q36 Lord Cameron of Dillington: Yes, I have to declare an interest as a farmer.

Perhaps I can make a comment on the last bit of conversation. If you are a farmer—I grow

potatoes, for instance—and you are growing thousands of tonnes of potatoes and you have

a choice between selling your potatoes to a supermarket at £120 a tonne or ploughing them

in or feeding them to cattle at £10 a tonne, believe me, the retailers have the upper hand.

You seemed to indicate a whole variety of outlets for vegetables in different states. I have

noticed very, very little assistance being given by the retailers to farmers in terms of finding

markets that are not necessarily selling direct to the consumer, so I hope you will note that.

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I want to talk about EU regulation. The FDF—changing the witness—highlights the EU’s VAT

Directive and the food hygiene legislation as requiring work to ensure that they do not set

barriers to food redistribution. Could you explain the underlying issues in relation to food

distribution that derive from those two, the VAT Directive and the food hygiene legislation?

Then the Every Crumb Counts declaration proposes that the impact on food wastage should

be taken into account in the impact assessment of all relevant policies. I wonder how

effective you think the Commission is in taking into account the implications for food

wastage in its policies and how you would like to see the EU take forward the various

actions proposed by the FDF and FoodDrinkEurope, in ways that the EU can contribute to

food waste prevention.

Andrew Kuyk: Thank you, a lot of questions in there.

Lord Cameron of Dillington: Yes, sorry about that.

Andrew Kuyk: If we start with the VAT one, which is a fairly technical issue, perhaps David

would like to comment.

David Bellamy: Yes, on the VAT point, this is a question of trying to get a harmonised

approach across Europe. As I understand it, about 13 Member States currently interpret the

VAT Directive—in particular I am talking about Article 74—to mean that food that is

donated for redistribution to the charity sector, for example, has a small or zero taxable

value for VAT purposes. We want to see that approach extended across all Member States

to get a harmonised approach if we are looking to tackle the issue of food waste across the

EU, which is the basis of our European association’s European food waste declaration. That

was the reason behind that. The UK, for instance, is one of those Member States that do

interpret the directive in the way I suggested.

On the issue of food hygiene legislation, we think there is a need to develop some EU-level

guidance on food donation. This is to get clarity around the issues that might arise, for

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example in respect of transport, traceability and legal liability issues, in relation to food

hygiene and perhaps other food safety legislation when people donate food to the charity

sector.

Andrew Kuyk: Some of this is around the issues of “best before” and “sell by” and so on,

and trying to improve consumer understanding of the distinctions.

David Bellamy: The other part of your question was in relation to the Commission taking

into account implications for food wastage in impact assessments and such.

Andrew Kuyk: Also, unintended consequences. I have been involved recently in the

negotiations on the reform of the common fisheries policy. At one point there was a

proposal from the Commission to have either a date of catch or a date of landing for fish as

a mandatory labelling requirement. In the discussions, both with Member States in the

Council and with the European Parliament, that was modified and food waste was one of the

grounds for modifying it, because, although it sounds simple, a date of landing does not give

you any guarantee about how the fish has been stored or handled since. It also creates the

risk of a false perception in the consumer’s mind that a recent date must be better than a

slightly longer date. That would then shorten supply chains and would give rise to a lot of

waste of perfectly good fish. That is a good example of where an informed debate was had

around that. It seemed a good idea at the time, but when we looked at it more closely,

because there was no real correlation between a date and the condition in which the

product reached the consumer—the genuine health and quality issues, as I say—that was

then modified. That is an example of an unintended consequence, and perhaps the “best

before” and the “sell by” is a similar idea: namely, that giving consumers information that is

meant to be helpful can work in a slightly perverse way. I am sure we all know people who

open the fridge and look at something; one minute past midnight, it is past its best before.

That is why—back to the point that Andrew made—50% of the food waste in the UK is

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wasted at household level. Some of it is that kind of discarding of things that are actually

perfectly safe and perfectly good, just based on the misleading impression given by the way

certain things are labelled. There are other forms of household waste as well, around food

preparation, meal planning and so on. That is very important. Another part of the question

was how the actions, which have been identified by FDF and FoodDrinkEurope in the Every

Crumb Counts campaign, should be taken forward. Those are the kinds of issues where we

think Europe has a role to play in helping to educate, helping to inform, helping to explain,

and avoiding some of these unintended consequences. Did you want to add anything on that,

David?

David Bellamy: No, I think that is entirely right. There will be some areas, for example,

where you talk about educating consumers or educating adults, perhaps some issues around

meal preparation and use of leftovers, where it might be more appropriate to deliver that

kind of message at a local national level because there will be some regional and national

member state differences and cultural issues around that.

Q37 Lord Whitty: Could we have a note or something of how far the “sell by” date, and

the other consumer information, is reflective of European intervention and how far it is not?

My casual observation in European supermarkets is that they have different sorts of dates,

but I may be wrong. I do not know how much that is driven from the European end.

The Chairman: Yes, we are not finding it easy to get to the bottom of what one would

think would be quite a straightforward issue, particularly when it comes to food

redistribution. The Americans have—I do not know if it is right across America or just in

some states—this Good Samaritan Provision, do they not, which in effect gives them a sort

of legal opt-out if food has been given in good faith? I wonder if you have been aware of this

sort of work and whether it is something that we might be considering, so that you do not

end up in legal liability problems if food has been given in good faith.

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David Bellamy: Yes, I am aware of that particular scheme in the States. That was the basis

of one of the issues I suggested might be appropriate for EU guidance in this area: namely,

legal liability issues. Although you may decide to take up that kind of scheme, you still have

your brand on the product so if something did go wrong there are still potential

repercussions for a brand.

Andrew Kuyk: I am not an expert on labelling, but my understanding is that what they call

the date of minimum durability is a legal requirement in the consumer information regulation

set at EU level. There are certain forms of additional voluntary information that people can

give. I think there are examples, but again this is more on the retailer side. Sometimes

people use a “sell by” date, which is not a legal definition but is more of a stock control

device. I think that efforts are being made to phase that out, precisely because it does give

rise to further misunderstanding and complexity. As I say, that is more at the retail end.

Andrew Opie: I am happy to send a note on durability dates and how they are used. There

is also some interest in WRAP research on the changing trends of those issues. For example,

use of “display until” type issues. “Sell by”, I think, last time they checked is used on less than

1% of products or something, but it is one of these kind of pervasive myths.

Lord Whitty: It is “best before”.

Andrew Opie: Yes. Sorry, I will say just one point on that. It is really important. If I go back

to the funding for WRAP to be able to do public campaigns, the biggest thing they could do

is convince us all as consumers of the difference between a “best before” and a “use by”

date, because that is the crucial thing. Retailers have pushed a lot of products, like hard

cheeses, into “best before”, for example, but if people still do not know the difference

between a “best before” and a “use by” date and think there is some kind of food safety

issue around that, they will still throw it away. All the work to shift the labels is wasted

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unless we can get everybody to understand the difference between “best before” and “use

by”. That is the crucial thing.

The Chairman: Just finally—we are very short of time now, just in the last couple of

minutes—Lord Williams.

Q38 Lord Williams of Elvel: If I may say so, I notice that you have been slightly

lukewarm about the European Union and what it can do. Is there a case for being slightly

more positive, for instance, about innovation and research? Where do you think the EU

might contribute to the prevention of waste?

Andrew Kuyk: I am not quite sure who you are addressing that to. I do not know that we

have been lukewarm. What I think we both said, both from the retail perspective and the

manufacturing perspective, is that we think we have a reasonably good story to tell in the

UK in the system that we operate here. While I have the opportunity, I would like to add

that the support of food manufacturers for the work of WRAP, both in terms of the

messaging around waste but also the Product Sustainability Forum, a very important part of

trying to drive improvement across supply chains. I think there are differences of approach.

The WRAP approach is to identify hotspots within supply chains. There is perhaps a

different philosophy in Europe that looks more at a product-focused end result rather than

what goes on in the supply chains. In the area that you talked about—innovation and so

on—clearly there is a lot more that can be done in terms of packaging, shelf life, and various

techniques that will optimise the efficient use of raw materials. There is genuine market

failure there in that a lot of that work is fairly generic, fairly pre-competitive. It is not the

sort of thing that an individual manufacturer or an individual retailer would invest in, because

the benefits are clear but they are shared. They would not necessarily accrue to the person

who funded it as an individual commercial proposition. I think that is exactly an area where

the EU can provide that incentive, that funding, because it is a genuine generic market

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failure/public good argument. Promoting the transition from basic to more applied research,

but at the pre-competitive stage, is an example where the EU could contribute.

We have also talked—I think quite positively—about roles around consumer information

and so on. That is the level where we think there is a genuine contribution, but what we are

saying is that because of the diversity, both of food cultures and food production, a

regulatory approach—top-down, one-size-fits-all—is not the right way. There are lots of

ways in which Europe can operate positively that do not have to fit that prescriptive model.

Lord Williams of Elvel: Earlier you mentioned forecasting as being important. Do you

think the European Union has a role to play there?

Andrew Opie: Andrew made the point about the dissemination of innovation that has gone

on here. We should be proud of what we have done in the UK on food waste, and I think

we could play more of a leadership role, for example, with some of the research that we

have done here, the innovation that has gone on right through the chain, from farmers right

through to retailers and, increasingly, households. There are some lessons to be learned that

we could take over there. There is a lot of research going on in forecasting, here and in

Europe, with the large retailers there as well, so again it is whether that is disseminated

down, for example, to all of the farmers in the chain, not all of whom might supply retailers.

They might go into wholesale markets or something like that. Is there something that could

be learnt from the research that has been done, particularly through things like the Product

Sustainability Forum that could be taken into Europe? It would be quite interesting, I think.

The Chairman: I think we ought to leave it there. We are slightly over time. Gentlemen,

thank you very much indeed for coming to talk to us today and for the clarity of the

evidence that you have given us. If there is anything else that we need to know or anything

we would like to clarify, perhaps we might come back to you in writing. Thank you.