Food inflation
Food inflation in fruit and vegetables has been referenced this week; potatoes, cucumbers, oranges and mushrooms all rose in price over the past seven days, according to The Grocer’s latest Key Value Items tracker. Energy, fertiliser and distribution costs re fuel and packaging are all referenced as the reasons for this.
Apple growers have warned that a third of new apple trees have not been planted due to sourcing production costs and retailer pricing pressure, according to British Apples & Pears. The grower body carried out a survey of its members, who represent 80% of the British topfruit industry, and found that 150,000 new apple and pear trees have been cancelled for this season.
Set against this Tesco chairman John Allan and CEO Ken Murphy have highlighted the ‘constant’ battle with suppliers over CPI requests and to keep prices down. Whereas, NFU president Minette Batters and FDF CEO Karen Betts have responded that the current environment for primary production is ‘unprecedented’ with the huge cost pressures facing suppliers.
Food prices have similarly continued to rise across Europe according to data shared on by Eurostat, the European statistics agency. The inflation of food prices in the EU was 18.2 %.
The six food categories where the most significant rises were registered in EU countries were fresh whole milk, eggs, sugar, oil and fats, butter and other edible oils, ranging from 30.2 per cent to 56.6 per cent on average. Inflation in Europe is falling but food prices are rising. Who is paying the most and what for? | Euronews Inflation in Europe is falling but food prices are rising. Who is paying the most and what for? | Euronews.
IGD’s six global retail trends for 2023
Global insight provider IGD has identified six trends set to influence the global retail landscape in 2023. A preview of the report can be downloaded at IGD Retail Analysis. Global retail trends 2023 (igd.com) :
1. The efficiency imperative - With cost pressures mounting efficiency is a priority.
2. The new value equation - Value is not synonymous with price, variable will include experience, rewards, time and doing the right thing.
3. The magic of stores - Time, convenience, checkout, value and range are areas that can be optimised, in-store and online.
4. Force for healthier futures - Interest in improving health remains elevated
5. Savings for the planet - Retailers will persevere with their ESG objectives as they make their operations more efficient and resilient.
6. Task technology - Ongoing innovation not enable operations to be faster, more efficiently and at lower cost.
CMA Greenwashing
The UK Competition and Markets Authority (CMA) is to scrutinise ‘green’ claims in sales of household essentials CMA to scrutinise ‘green’ claims in sales of household essentials - GOV.UK (www.gov.uk)
The CMA is to examine potential greenwashing in the sale of food and other household essentials . The CMA’s review will examine a wide range of products known as ‘fast-moving consumer goods’ (FMCG). These are essential items used by people on a daily basis and repurchased regularly, such as food and drink, cleaning products, toiletries, and personal care items.
Claims that products are “sustainable” or “better for the environment”, contain recycled materials or could be recycled will be scrutinised by the CMA as part of its greenwashing inquiry to ensure consumers are not misled.
The CMA will analyse environmental claims made about such products – both online and in store – to consider whether companies are complying with UK consumer protection law. Concerning practices could include the use of vague and broad eco-statements for example packaging or marketing a product as ‘sustainable’ or ‘better for the environment’ with no evidence; misleading claims about the use of recycled or natural materials in a product and how recyclable it is; and entire ranges being incorrectly branded as ‘sustainable’.
Sarah Cardell, Chief Executive of the CMA, said: 'Now is a good time for businesses to review their practices and make sure they’re operating within the law.'
The CMA also produced the Green Claims Code – Check your environmental claims are genuine – a guide to help businesses understand how to communicate their green credentials, while avoiding the risk of misleading shoppers.
How the review develops will depend on the CMA’s assessment of the evidence. If the CMA uncovers evidence suggesting green claims could be unfounded, it will consider taking enforcement action using its formal powers – for example, opening an investigation into specific companies.
More information can be found on the CMA’s Fast Moving Consumer Goods (FMCG) - GOV.UK (www.gov.uk).
EU Greenwashing litigation
Ifoam Organics Europe, the EU organic sector association, and its French affiliate are suing the Paris Ecological Transition Agency and a group of companies that use the "eco-score" label to denote eco-friendly food products compatible.
The associations contest the brand because it "illicitly associates the diminutive "Eco" with certified non-organic products", says a note. Furthermore, this can lead to confusion among consumers between "conventional and organic production".
The association also appealed to the French patent court to have the trademark annulled.
An EU proposal on "green claims", to regulate companies' use of definitions such as "sustainable" and "eco" to promote their products, is expected by the end of March, see below. Europe.Europe. Ifoam's complaint: non-organic products passed off as "green" (efanews.eu)
Horizon Scanning – EU ‘Green Claims’ Legislation
Currently EU law does not explicitly regulate environmental claims. Instead, environmental claims are subject to the general rules of of Directive 2005/29 on Unfair Business-to-Consumer Practices CL2005L0029EN0010010.0001_cp 1..1 (europa.eu) and Directive 2006/114 on Comparative Advertising https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32006L0114&from=EN. In order not to mislead, environmental claims should be presented in a clear, specific, unambiguous and accurate manner. The Commission and Member States have issued guidance interpreting these directives, however in practice there is a wide range in the levels of enforcement.
A Proposal for a Directive on Green Claims in Europe is expected by March 2023 Environmental performance of products & businesses – substantiating claims (europa.eu) . Together with the Proposal for a Directive empowering consumers for the green transition through better protection against unfair practices and better information EUR-Lex - 52022PC0143 - EN - EUR-Lex (europa.eu) this is intended to create a common methodology for the substantiation of green claims
The Proposal is expected to define green claims very broadly to include graphic and symbols as well as brand and company names, ‘which states or implies that a product or trader has a positive or no impact on the environment or is less damaging to the environment than other products or traders, respectively, or has improved their impact over time.’ The Proposal is not expected to apply to claims that cover aspects other than the environment. ie sustainability claims would only be covered if they refer to environmental sustainability.
The proposed rules are also only expected to cover voluntary, business-to-consumer (“B2C”) transactions.
It has been disputed whether leaked information on the future draft is out of date or not so the following should be read with care; however some highlighted points that have been referenced about the future proposal that are in the public domain are listed as follows:
Substantiation
Substantiation to be via an approved methodology;
- Not omit relevant information, ie include any negatives as well as positives;
- make available the information on the assessment on which the environmental claim is based, including (i) information on the product or activities of the trader subject to the claim, (ii) environmental aspects, environmental impacts or environmental performance covered by the claim, (iii) the methodology used, (iv) the underlying studies or calculations used to assess, measure and monitor the environmental impacts or aspects covered by the claim, (v) a brief explanation how improvements in environmental performance are achieved, etc. Access to this information may be provided in the form of a weblink, QR code or equivalent; and
- review the accuracy of their environmental claims (and their substantiation) at least once every five years from the date of the underlying studies or calculations. In cases where there are circumstances that may affect the accuracy of the claim (i.e., when there are updates of the scientific methodology substantiating the claim), the environmental claim should be reviewed and updated immediately.
Methodology
The methodology is expected to be as follows:
- based on scientific evidence, state of the art technical knowledge and takes into account relevant international standards. Where there is no recognised scientific method or insufficient evidence claims would not be allowed;
- assesses the environmental impact throughout the whole life-cycle of the product;
- takes into account: the product composition; materials used in the production of the products; emissions from the processes and the use of the product; its durability, reparability and end of life aspects;
- assesses if the achievement of positive environmental impacts, aspects, or performance leads to significant increase of any other negative environmental impact, etc.;
- accessible to third parties, wanting to use it, and any access fee is proportionate; and
- to be regularly reviewed by a third party.
The Proposal is expected to add additional requirements and for this to be linked to the existing EU Product and Organization Environmental Footprint methods (“PEF” and “OEF”) EU Product and Organization Environmental Footprint methods . Where a company complies with the Product Environmental Footprint Category Rules (“PEFCRs”) for a product, the claims made on the basis of the PEFCRs are anticipated should then be deemed compliant with the draft Proposal.
Comparative Environmental Claims
The Proposal is also expected to include rules on environmental comparative claims, along the following lines:
- use the same methodology to assess each;
- data used to be generated or sourced in an equivalent manner to ensure their comparability; and
- the most significant stages along the value chain must be taken into account for all products and traders compared, etc.
If adopted, broad, sector-wide claims based on publicly available studies would no longer be acceptable.
Environmental Planning & Future Claims
The Proposal is expected to introduce new strict rules on forward-looking claims. The Proposal is expected to require that claims related to the future environmental performance of a product, service or trader:
- be accompanied by commitments that include milestones to be achieved within clearly specified time frames;
- indicate a baseline year for targets and the indicators reflecting performance in the baseline year and the year linked to the improvement set out in the claim (e.g., “50% reduction of greenhouse gas emissions compared to 2015” instead of “50% reduction of greenhouse gas emissions”);
- not include actions or targets already achieved, etc.
Enforcement
Member States are expected to be required to carry out a compliance monitoring:
- as part of their regular checks;
- in cases where they have sufficient reason to believe that an environmental claim presents a risk of infringement of the rules, laid down in the Proposal; or
- in response to complaints.
Companies making non-compliant environmental claims would be required to fix the non-compliance within a short deadline ie 10 business days to respond to queries. Where a trader does not provide a timely or satisfactory answer, enforcement authorities must require the trader to correct the non-compliant claim or immediately stop its communication within 30 business days.
The Proposal is also expected to allow third parties to submit complaints against non-compliant green claims.
Next Steps - The proposed draft is expected by March 2023. As indicated above, it may be the proposed draft will differ in some aspects from preliminary indications listed. This will then be debated and amended the process usually takes at least 18 months.
FairTrade
Fairtrade has launched a new tool to help retailers and suppliers identify potential human rights violations and environmental harm across their global supply chains. Fairtrade launches map to identify human rights and environmental risks - Fairtrade Foundation
The new online map will flag risk areas across the supply chains of key commodities such as coffee, cocoa and bananas.
All parties can use the tool to help identify risk areas associated with the different commodities. The risks include forced labour, discrimination and climate impact.
ASA Rulings
Particularly topical as the UK Health Security Agency (UKHSA) has issued cold weather warnings this week… ASA rulings mainly concern heaters and misleading claims
- Ecom7 Ltd t/a Instacool, Heater Pro X Ecom7 Ltd - ASA | CAP
- Ecomm Movadgency SL - ASA | CAP Ecomm Movadgency SL
- Label Products BV t/a InstaHeat Label Products BV - ASA | CAP
- Keilini Technology lnternational Co Ltd - ASA | CAP Keilini Technology lnternational Co Ltd
...were found to misleadingly imply their heaters could provide cheap heating and help save money
It was found the companies had provided no evidence that their product provided the equivalent heating capabilities of gas central heating or similar electric heaters, either in a single room or in a whole house, at a cheaper cost. They had also provided no evidence that the heater provided an economical form of heating which could effectively heat a typical room or home, including that it could heat a 350 sqft room in three minutes. The ASA understood that it was highly unlikely that small electric heaters would be a viable source of sufficient heating for most households. They therefore concluded that the claims, in the absence of any evidence, had not been substantiated and were likely to mislead.
Additioinally, several cases were upheld in breaching the CAP Code where it is stated, before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation.
Obviousness identifiableness of an advert - Tara Maynard Tara Maynard - ASA | CAP
Tara Maynard t/a Taramays25 - An Instagram Story on Tara Maynard’s account was held to be not obviously identifiable as an ad.
ASA noted that the inclusion of the discount codes might suggest that Ms Maynard was undertaking promotional activity on behalf of the listed advertisers, but nevertheless considered that of itself was insufficient to make clear to consumers the nature of the relationship between the parties. The ASA therefore concluded that the post was not obviously identifiable as a marketing communication and as such breached the Code.
Farmers central to food production and environmental action
The UK Government has released a press statement this week that it will be accelerating the Sustainable Farming Incentive roll-out with new sets of paid actions to support food production and environmentally responsible farming.
Environmental Land Management
Six additional standards will be added to the Sustainable Farming Incentive this year, meaning farmers can receive payment for actions on hedgerows, grassland, arable and horticultural land, pest management and nutrient management. They build on the three existing standards to improve soil health and moorlands introduced in 2022.
Further details on the new standards and payment rates being rolled for the Sustainable Farming Incentive as well as information on the future roll out of Countryside Stewardship Plus from 2024 will be available viua UK gov website. Thérèse Coffey: Farmers central to food production and environmental action - GOV.UK (www.gov.uk)