Is dairy fit for the 21st century diet?

Tuesday 16 September 2008

Speech to Dairy UK conference.

Good afternoon and thank you very much for inviting me to your conference today.

It’s good to see so many old friends and colleagues.

The last time I was here in 2006 – I talked about why the UK Dairy industry should be optimistic about the future.

Here today in a different role, as Chief Executive of the Food Standards Agency and I think we all have good reasons to be optimistic.

Looking into the current situation I was struck by what had changed in such a relatively short time.

Then we were wrestling with raw milk prices of an average of 18p a litre in believing that we had seen a structural change which would not reverse. Today’s prices at an average of 25p would have been a shock to everyone if we’d known it was coming.

Oil prices had receded as an issue and the Platts index for HDPE was in retreat. No longer of course.

We have seen full on food inflation which has meant shelf prices have also increased:

• Butter – average 2006 price of 84p for 250gs. Today’ price is an average of £1.20 for 250g.
• Milk – average 2006 price of £1.11 (4 pt) in 2006. Today’s price is an average of £1.42. Although that figure doesn’t reflect the flurry of activity on promotional pricing in the last few weeks.

But the value of businesses has gone down. The market capitalisation of Dairy Crest in Sept 2006 was £750m – yesterday it was £570m. Robert Wiseman in September 2006 had a market capitalisation of £310m; yesterday it was £230m.

What might a regulator be worried about in these circumstances.

Three things:

• First, hard pressed farmers take short cuts in animal welfare or on-farm hygiene, cutting corners on antibiotic regimes. No evidence of that.
• Second, processors could cut costs in a variety of ways. In my view only those in the middle of the market might be tempted by that route. But again, no evidence of that happening.
• And third, investment decisions may suffer – from simple low level capital expenditure to mergers and acquisitions – all of which eventually feed through to consumers.

In the past the dairy industry has risen to the challenges of the financial environment, and to date we’ve not witnessed any of the concerns expressed and we’ve seen no evidence of negative impacts on consumers – other than price. We know that we’re relatively fortunate in the UK in that only 11% of our net income is spent on food but for the hardest pressed members of society that figure was 13% and it’s now risen to 16%. Not strictly our remit but it puts a new tension into the market.

But some things don’t change.

My job then and now – like yours is to provide the best quality, safest, healthiest food for the nation’s tables.

But always with an eye on what’s around the corner for consumers.

What they’re expecting next. What they are worried about.

It’s about consumer demand and anticipating it.

Ensuring dairy is fit for the 21st Century diet.

And this is not just about Britain. This is about the standing of the Dairy industry and the FSA in Europe. In the world.

These are challenging times for the food industry.

And I want to thank you for what you do.

Lots of issues that I know are important to all of us here. Dairy hygiene, saturated fat, salt, food labelling to name a few.

The dairy industry has come a long way in ensuring that people have access to safe, good quality and healthier foods.

But all of us have further to go. More to achieve. And it’s important that we get this right. For the dairy industry. For the Agency. For consumers.

Now I want to turn to the issue of dairy hygiene.

Food businesses, not the FSA, have a duty to produce food safely. From farm to fork. This covers everything from the health and cleanliness of animals, hygiene during milking and controls on raw milk and during processing. Any change must not dilute the level of public health protection provided to consumers – the Agency’s main focus.

In primary production, there are Better Regulation issues firmly on the agenda.

Various dairy-related inspections and audits are carried out on farms. The industry, the dairy hygiene inspectorate and the Agency are together carefully considering the scope to reduce the associated burdens. The National Farmers' Union were quick off the mark in my first few days of office to clearly layout what could be done and we welcome constructive lobbying.

We are looking at whether closer working and information sharing between the auditors and the inspectors could bring efficiencies and savings. This is a current example of good partnership working.

I cannot say what the outcome will be – we are actively considering the issues, and expect to begin a pilot very soon. I would simply take advantage of this opportunity to underscore the Agency’s commitment and positive approach to this initiative. I know that two core issues which must be resolved are:

• unannounced/announced audits and
• audit carried out during milking.

Industry has done a lot in the processing area. Overall the record has been generally good: but not universally. There have been high profile issues that will not have escaped any of you – for example in relation to antibiotic residues and cheese recovery. Frankly with the investment history of the UK’s industry the last thing you want is the proverbial bad apple.

It is important to take a fair and balanced view of our industry in relation to its compliance with EU regulation. Where there are issues we need to continue to work together to resolve them.

Two years ago we came into line with European Commission interpretations of regulations. We are not so naïve as to assume 100% continuous compliance. That would be unrealistic. There are bound to be hiccups – not only in the dairy sector but across the spectrum of food production.

However, we must aim to be the best and most consistent we can. We must work together closely and openly to resolve difficulties and progress – again, antibiotic residues and cheese recovery are good examples of where we have worked together closely to achieve this.

Although the last FVO mission in September 2007 found no serious shortcomings, they will be coming back in 2009. Our house needs to be in order. We need to impress them and secure a clean bill of health.

I think it’s fair to say that having been caught out once none of us wants a repeat. So let’s continue to work together to ensure we get it right.

Nutrition

I now want to talk about nutrition and the way that we can, and do, work together in partnership to help ensure healthier food for the nation’s table.

The Food Standards Agency was set up to 'protect public health from risks…which may arise in connection with the consumption of food and otherwise to protect the interests of consumers in relation to food.'

And that means looking at the evidence about what the nation is consuming – that includes the high levels of saturated fat in the UK diet.

The Prime Minister’s report: 'Food Matters', earlier this summer, made compelling reading on this. Although none of it is a surprise except, perhaps, the scale of bad health which is related to food consumption.

The FSA’s eatwell plate, shows what a balanced diet should look like. But the reality for many people is very different.

The Foresight report shows that obesity levels in England have more than doubled since 1980. And if the current trends continue, by 2050, 60% of men will be obese, 50% of women and a quarter of young people and children.

This can result in serious health problems such as cardiovascular and coronary heart disease, cancer and diabetes.

The Foresight project estimated the cost of this to the NHS and to the wider economy would be almost £60 billion a year in 2050.

Sat fat

We are focusing much of our current work on dietary health on reducing intakes of saturated fat, building on the work already done by industry. The average amount of sat fat eaten in the British diet is just over 13%. Our target, based on sound science, is to reduce the average saturated fat intake to below 11% of food energy by the end of 2010.

And this is not just a statistic. It’s about all of us and the health of all our families. Reductions in saturated fat intakes would reduce cholesterol levels and therefore lower the risk of cardiovascular disease. We estimate 3,500 lives a year would be saved if we reduced levels of sat fat to our target of 11% by 2010.

So we must squarely address the fact that 24% of the saturated fat we eat comes from dairy foods.

Many in the dairy industry have worked in partnership with us to work towards reducing these currently high levels in the UK diet.

We all know that there is no such thing as an unhealthy food, only an unhealthy diet.

And I want to put the record straight. The FSA has never said that cheese or any other food is junk food.

Indeed we recognise that dairy foods have an important place in a balanced diet. Providing an important source of protein, vitamins and minerals. Milk and dairy foods comprise a sizeable section of the Agency’s eatwell plate. You need to have a clear communications strategy which works with the grain of the FSA’s work, not against it.

But it is possible to provide lower fat versions of dairy products: milk, butter, cheese, yoghurt as many of you here are already doing.

The FSA was pleased with the emergence of 1% fat milk onto the market and publicly welcomed this development.

These type of product innovations can only benefit consumers by offering them healthier choices.

I think the challenge now is for both the dairy industry and the FSA to work together in partnership to ensure that we give the public the information they need to make these healthier choices.

You may ask why we don’t just legislate.

We think that the best way forward is to actively seek ways to allow all of us to work co-operatively and collaboratively.

And many of you will know the problems I had with finding a way of the industry working together which didn’t risk anti-competitive claims from the OFT.

We must of course be mindful of competition law. But it is our role to facilitate collaboration to improve public health.

I know that there is difficulty in reducing fats in some cheeses. Know that some of you would prefer to look at portion control rather than fat content.

I know that commercial sensitivities exist but in the interests of a balanced diet we must act together.

We have to help reduce the amount of saturated fat eaten in the UK. We are looking forward to early 2009 and the launch of our public awareness campaign which aims to help consumers reduce their saturated fat intakes.

And it is through the FSA working with organisations like Dairy UK we will find the best ways forward to do this and still retain a viable, valuable and vibrant dairy sector.

Salt

The FSA targets for salt levels in food covers dairy products – milk powders, cheese, butter, yogurt and dairy desserts.

And there has been some great partnership work involving yourselves and the Food Standards Agency.

Lurpak and Anchor butters and spreads have met the FSA salt targets by reducing salt in their butter by 15%.

I know there are difficulties in reducing salt in cheddar – the most popular British cheese. But I know that Dairy Crest has been working hard to reduce the salt levels in their products.

Cutting down on salt makes a real difference to health. FSA research has shown that cutting ½ gram of salt from people’s diet saves an estimated 3,500 lives a year. Almost the same number that dies in road crashes every year. Our latest study has shown we are going in the right direction from 9.0 to 8.6g between 2005/06 and early 2008 and from 9.5g when our salt programme started in 2004.

The ideal is 6g – and we will continue to work towards that.

The FSA nutrition strategy is three-pronged.

• First, we want to encourage the food industry to reformulate its products so that it produces healthier food.
• Second, to create market demand by educating the public about what to look for if they want to eat more healthily. This is not nanny state, it’s about giving people the information they need to make their own decisions.
• Third, to ensure good front of pack labelling that allows people to see at a glance what levels of fat, sugar and salt are in their food before they buy it.

This approach is making a difference and there’s a lot to celebrate.

Good progress has been made on clearer labelling, much of which is being done voluntarily, through partnerships and co-operation.

Food labelling has undergone something of a revolution. In the past few years the UK has transformed the approach to front-of-pack labelling. And the FSA, working in partnership with industry, has been in the vanguard of this change. Every major retailer is voluntarily using one of three main approaches which can now be found on over 30,000 product lines.

This helps give consumers what they need to make healthier decisions for themselves and their families.

So the big picture here is the dramatic change that has been made through the food industry, working with government, to re-formulate food and to clarify nutritional information.

Independent research is currently taking place to look at the effectiveness of individual schemes in helping people make healthier choices. It is due to report back in Spring 2009. We should not be surprised if there is a confluence of GDA's and colours, although, of course, we can’t pre-empt the outcome.

Whatever the research says we need to be ready for the next steps.

All this is great news for consumers buying groceries in the main retailers but we must translate the benefits of all this good work into eating out of the home.

Communication

How we all handle communication between ourselves and with the public is vitally important.

It’s important that the best of your products are promoted. There is a clear and important role for dairy products in a balanced diet.

We will talk to individual companies that want to communicate their messages.

Conclusion

Because whether it’s me as the Chief Executive of the Food Standards Agency or those of you here today – we’re all in this together.

We’re all looking for consumer choice, healthier food, value for money and public confidence that the food they buy is the best they can get.

Of course there are challenges along this road for both of us, but there are also positives.

You have an excellent and exciting range of products.

We have a good working relationship with many of you and are keen to build on these.

I’m here in listening mode. I want to hear what you think of developments and where you think we could work better together.

I want to thank you for the work you’ve already done.

Your role is as important as ours to ensuring that dairy foods are fit for the 21st century diet.

I look forward to hearing your views.

Thank you.