£300 per food hygiene inspection, per year? Not too much from the point of view of Northern Foods or Marks and Spencer perhaps, but it’s a lot for many small or micro businesses, and the vast majority of our food businesses are small businesses, yet they create far more employment than their larger competitors, and often with less of a fanfare about it. However, they also get less contact with the decision makers than their larger counterparts; a phone call from the boss of Heinz to Defra will probably get far higher up the command chain than Joe Bloggs with three part-time employees who makes cake decorations. The £300 charge is currently a serious prospect from the Food Standards Agency, which is tasked with doing its work at the least possible cost to the Exchequer. We at Home Farmer were made aware of the proposals by Lucy Hill, who is a member of Farmers Markets, a long-standing co-operative which would certainly suffer if the charge became a reality. Here, Bob Salmon from the small business organisation, Food Solutions, looks at the implications of these proposals and asks if they are reasonable.
Government Authorities ‒ called Competent Authorities, or CAs for short ‒ have a duty to enforce hygiene rules on businesses and check to see that the rules are properly kept. Obviously, it costs a lot to perform these functions. The Food Standards Agency (FSA) is the UK’s Competent Authority, and they have launched a review on how food regulations should be controlled in the future. The initiative is known as ‘Regulating our Future’, and further details about it together with updated information can be found at www.food-solutions.org/index.htm. The FSA has set up three Expert Advisory Panels comprising industry, professionals (Local Authority officials) and consumers; their task is to look at ways the functions could best be done at least cost to CAs in the future.
Several meetings have so far been held by the FSA, and two people from Food Solutions have been appointed to represent the interests of small and micro food businesses on the industry panel: Bob Salmon, with an in-depth knowledge of European food law; and John Golton-Davis, with an in-depth knowledge of small food businesses.
WHAT IS A SMALL OR MICRO FOOD BUSINESS, AND WHY ARE THEY IMPORTANT?
Most food businesses are small. In Europe there are around 21 million food businesses, and the figure is probably about 600,000 in Britain. The European definition of a small business is one that has less than 250 employees, and the European definition of a micro business is one with less than 10 full-time employees (or the part-time equivalent) with a turnover of less than 2 million euros. It may surprise you that together these businesses actually employ two-thirds of the workforce. Only one-third are big concerns, employing just one-third of the entire workforce, so small businesses are very important to the food supply, to employment, and to the variety of the produce we enjoy. It is against this scenario that the new rules will be drafted, and this is why the involvement of small businesses in planning future food regulations is essential.
The biggest problem is making the views of the typical small business known to government. It is believed that only about 20 per cent of food businesses actually belong to a trade association, but it is essential to ensure that the remaining 80 per cent of food businesses are fully aware of what is being proposed, and also to give them the opportunity to have their views heard before any new food regulations are introduced.
THE INITIAL CONCERNS
For many years there have been discussions on the subject of ‘full cost recovery’, which would mean all food businesses picking up the complete costs of food safety inspections. In addition, it is also now being suggested that all food businesses must have permission to trade, which will involve a fee – the cost of this has yet to be determined ‒ and will replace the current basic requirement simply to register as a food business.
Both of these suggestions are potentially damaging to small enterprises. Businesses already pay for inspections through their taxes and business rates. Is the next stage to charge businesses for VAT inspections? To charge again for the same thing is tantamount to being greedy, but it would also disadvantage many small rural businesses, as the cost of travel by inspectors would need to be paid for.
So, how much might this cost be? A figure of £300 has been suggested for routine food safety inspections, but no confirmation – or denial ‒ of this has as yet been given.
There is also a concern about the issue of re-inspections. If at an inspection an officer says they would like to come back next week “just to check that you have done what you say you have done” this too would be chargeable. If after an inspection you have had your Food Hygiene Rating Scheme rating reduced from say Level 5 to Level 3, but have put right the issue, you can request a revisit. However, on revisits requested by you, if you operate in Wales a £160 charge is being made, and if you operate in some London Boroughs you will be charged in excess of £200. Food Solutions believe this is potentially open to abuse, and even Local Authority representatives on the panel agreed with them on the matter. But how long will it be before this scheme is extended across the whole of England and Northern Ireland?
Permission to trade or registration requires the ‘competent person’ in charge of the business to hold a licence and to register the business with the FSA nationally. This would be for anyone serving food or drink to members of the public, whether for profit or as a charity. The bureaucracy it will involve is potentially enormous; one suggestion was that the person should renew the registration every year and pass tests on how competent they are. Remember the term ‘charity’ ‒ it includes schools, and village and church fetes.
There are, of course, exemptions from some regulations within EU law, and we have argued that the same or similar wording should apply to these FSA proposals. Such exemptions include: “food, including hand-crafted food, directly supplied by the manufacturer of small quantities of products to the final consumer or to local retail establishments directly supplying the final consumer.” If this was to be applied to these charging and licensing proposals it would indeed exempt many of the nation’s small and micro businesses from being involved. As an organisation, Food Solutions is arguing for at least that, but they need real evidence about small business thinking on the matter, and getting that is difficult. Small business owners are usually just another pair of hands, and unlike their larger counterparts they do not have spare employees to attend information-sharing functions.
RESEARCH
Food Solutions carried out a survey when ‘full cost recovery’ was first talked about, and the results indicated that some 40 per cent of very small food businesses would close rather than pay to be inspected. There are several hundred thousand very small food businesses in Britain, so 40 per cent would be a huge loss in terms of both employment and service to the public.
Consequently, small food businesses need to be able to speak with authority at the meetings of panels such as that discussing ‘Regulating our Future’, and Food Solutions has produced another questionnaire asking similar questions with regard to the matter. Details of the survey are included at the end of this article. Please respond if you run a food-related business; the survey is anonymous, so there will be no comeback, but a large response from the nation’s small food ventures will enable the voice of small food businesses to speak with confidence at future meetings, and so confound those who sometimes seem to work in opposition to the best interests of our important small business community. It is true to say that if we all do nothing we inevitably get what we deserve, but events around the country populated by many small food businesses, and those attending, will be vastly poorer as a result if this legislation is passed.
GET INVOLVED
We were made aware of these proposals by Lucy Hill, a member of Country Markets who work closely with Food Solutions, a body both fighting for and informing the UK’s many small food businesses. Most members of the panel, set up to agree these proposals, are employees of multi-million pound companies and consultants who have little or no real idea about running a small food business, and Food Solutions is the only member representing UK small and micro food businesses. Please complete the questionnaire by visiting www.food-solutions.org under the heading Food Hygiene Inspection Charges and Permission to Trade, where there is a direct link to the survey and notes on both EU proposals and FSA responses on the matter of inspection charges from as far back as 2011 to the present. A £300 charge to a multi-million pound food business would be viewed as small change, but to a micro business – especially with the risk of a second fee for a return visit – could be the kiss of death.
FURTHER INFO
Visit www.food-solutions.org to find out more. Their aims are to help food businesses comply with food regulations simply and cost effectively, to keep businesses informed about those regulations, and to provide an effective voice for the many small food businesses in the UK. They can only achieve these aims with the continued support of small and micro food businesses.
The post New Food Regulations Threaten Small Businesses appeared first on Home Farmer.