Newsletter No. 5 July 2012
Small dairy farms subsidise supermarkets and milk processors
The milk industry today is dominated by a few large supermarkets and industrial scale milk processors, the traditional dairy farm sits powerless at the bottom. Retailers use milk as a means of driving footfall while milk processors undercut each other to gain market share and pass these cuts to farmers. The result is an absurd situation in which milk costs less than bottled water.
Farmers are tied into contracts which allow milk processors to cut the price below the cost of production at will and sometimes even retrospectively. The farmer has no right to terminate the contract, a fact which clearly demonstrates these are not contracts negotiated by parties on an equal footing.
Many dairy farmers will, by 1 August and over the last three months, see the farm gate price slashed by up to 3.7 p per litre, well below the cost of production. The price paid to dairy farmers over last 10 years has never been that great, but costs have risen and the recent cuts simply pile on the pressure. Over the same period supermarket profits on milk rose from 2.5p to 9.3p per litre and the stark reality is that dairy farmers are subsidising supermarkets and milk processors.
The
DairyCo report published on 18 July highlighted the rise in supermarket margins, milk may drive footfall but is no longer the loss leader it once was and which many assume is still the case.
The chart shows the rise in gross margin for supermarkets since 1996 to 22.5 p per litre in 2010, although some of this has undoubtedly been lost in more recent price cutting.
Small dairy farms need your support like never before. More on the crisis in dairy farms can be found
here.
Supervising organic production – more bureaucracy to come?
A recent
Audit of the Control System Governing the Production, Processing, Distribution and Imports of Organic Products identified shortcomings in the quality assurance arrangements for organic foods. In particular, there is insufficient supervision over control bodies (in the UK these includes
Soil Association Certification and
Organic Farmers and Growers). The result is a failure, on occasion, to meet the requirements of EU regulations governing organic production. The European Court of Auditors recommended:
-
Member States strengthen their supervisory role.
-
The exchange of information within and between Member States and the Commission should be improved.
-
Strengthen checks to ensure that producers, processors and importers fulfil regulatory requirements regarding traceability.
-
The Commission should strengthen its monitoring of Member States’ control systems.
-
The Commission should ensure that organic imports from countries in the list of those recognised as being equivalent for organic production are adequately supervised.
This all looks like adding up to a more rigorous inspection regime accompanied, in all probability, by more bureaucracy and paperwork.
Further details
here.
Scotland to have its own food standards body
The creation of a
new Scottish body for food safety, food standards, nutrition, food labelling and meat inspection was announced by the Scottish Government at the end of last month. This will give Scotland a single body to oversee a range of functions.
The move follows the recommendations of
the Scudamore review, commissioned as a result of the UK Government's decision to move responsibility for nutrition and food labelling in England from the Food Standards Agency to the Department of Health and Defra in 2010.
The
FSA said that it respected the decision of the Scottish Government and it will work with it to meet its objectives while ensuring that consumers’ interests in relation to food continue to be protected. Creating a new Scottish food standards body will require primary legislation.
Meanwhile, Scotland is to gets its
first artisan food centre.
New wine allergen labelling requirements
The European Commission has added egg and milk products to the list of ingriedients which must be described on the label. The requirement came into effect on 1 July 2012 and will apply to this year's harvest. The decison was taken not to renew the temporary exemptions which have applied to wine since
Directive 2007/68 came into force. Previously the main requirement was to list the presence of sulphur dioxide which recently proved to be a costly mistake for Krug - see ‘In brief …’ below.
European Food Safety Authority research funded by the wine industry into egg white and milk products (fining agents) examined the case for a permanent exemption, fish products (isinglass) have such an exemption, but this was rejected. In addition to the existing description ‘
Contains sulphur dioxide (or sulphites/sulfites)’ (where wine contains more than 10mg per litre of SO
2), the following descriptions in relation to egg and milk products present in excess of 0.25mg per litre must be used:
Contains egg/Contains egg protein/Contains egg product/Contains egg lysozyme/Contains egg albumin
Contains milk/Contains milk products/Contains milk casein/Contains milk protein
Where multiple allergens are present ‘Contains’ need not be repeated. The above pictorial may be used in conjunction with the text where wine is to be marketed in other EU countries as an alternative to using other languages.
In brief …
Quorn's 'Cornish style’ pasty claim caught by the EU protected food names regulations. North Yorkshire trading standards stepped in to put Quorn right, food names are protected for a reason.
Lincolnshire in revolt over Defra’s rejection of EU PGI status for sausages. An appeal is pending.
Oops! Krug forced to withdraw prestige champagnes following an
allergy alert issued by the FSA due to the presence of sulphites not being mentioned on the label. When it
costs up to £1800 a bottle you simply have to get it right!
A light-hearted but informative read from the Intellectual Property Office on protected food names:
What's in a name? Food for thought.
European court rules that an existing EU guideline on the marketing of seeds cannot categorically prevent independent farmers from trading in non-approved seeds. The repercussions of the judgement are as yet, however, unclear.
English wine makers on tenterhooks. Weather “not a disaster yet”. "We want ... less torrential rain" Don't we all!
The
Food Hygiene Rating Scheme (FHRS) launched in London on 17 July 2012.
