Food supply chains – New Year’s resolutions

Last year was the “annus horribilis" for food, with the horse meat contamination wiping millions off turnover and stock prices. Jessica Burt of Mills & Reeve contributed to Professor Chris Elliott’s review into the integrity and assurance of food supply networks. His interim report has just been published.

While praising the work the UK food industry does in delivering “perhaps the safest food in the world”, the underlying theme of Professor Elliott’s review and recommendations is that significant changes are needed to deal with the threats of fraudulent activity that exist along complex supply chains and the culture that underlies how food fraud is perceived and received.

Due diligence

As far as industry is concerned it is a timely report and should act as a due diligence wake-up call, even for those unaffected by recent food crimes. A due diligence defence is only available where a company can establish that it has taken all reasonable precautions and exercised all due diligence to avoid committing an offence. What is “reasonable” will depend on the facts in each case, the knowledge implied or otherwise of the company as well as its size and resources.

Professor Elliott in a particularly significant passage states: “Understanding your supply chain, and how it works, must be much more than maintaining an appropriate paper trail. When things go wrong, waving a piece of paper will not provide a defence against allegations of negligence or handling counterfeit foods (which constitute criminal property under the Proceeds of Crime Act 2002.)”

In this new, post “horsegate” dawn, both over reliance on paper audits and their unnecessary proliferation are criticised. Instead, there is a need for an intelligent assessment of circumstances, with commodity pricing being a clear indicator of where risk can lie, agreed descriptions of what the product is and correct labelling, contracts with specific and defined requirements and effective validation processes. The cultural change required will be for food businesses to prioritise authenticity and adherence to labelling and to treat these as being on a par with safety. Lack of knowledge of the provenance or indeed the species contained in your product clearly completely undermine all the careful risk assessments and hazard analysis critical control point steps a producer may have undertaken and, more importantly, undermine the consumers’ trust in the product and brand.

Sharing market knowledge

The second area of particular interest for the industry will be the comments of Professor Elliott on how best market intelligence might be shared with the Government. Currently, as the UK Food Standards Agency and trading standards officers have enforcement powers and, some might consider that they have a tendency to skim over the importance of taking a proportionate risk assessed approach to notifications received by them, there is perceived to be a general reluctance to update these agencies on suspicions within the market and on un-notifiable events.

This reluctance to provide information informally is commented on and Professor Elliott examines possible solutions including the creation of an industry “middle-man” authority, which would anonymise the information and thus protect the contributors of information under an extended type of legal privilege. This, Professor Elliott states, should be in conjunction with an expanded FSA supporting a national food economic intelligence hub that studies trends in commodities. Also, a specialist food crime unit that can act as liaison between the FSA, Police and local authorities is suggested in the interim report.

Summary

It is unclear how many levels of bureaucracy may or may not be created in the desire for a more joined up intelligence network and to overcome the reticence between government and industry to share information, but there is a need for some sort of protected shared intelligence to help combat fraudulent activity.

However, as far as immediate recommendations or "resolutions" go, that of making an intelligent assessment of your supply chains and processes, rather than the blanket reliance on paper based auditing, is one that all those in the food and beverage industry should prioritise for the New Year.