The Poultry Meat, Farmed Game Bird Meat and Rabbit Meat (Hygiene and Inspection) (Amendment) (Wales) Regulations 2005

Tuesday 8 November 2005

Regulatory Impact Assessment

Background

1. Council Directive 71/118/EEC, which lays down the requirements for the hygienic production of poultry meat, is implemented in Wales by The Poultry Meat, Farmed Game Bird Meat and Rabbit Meat (Hygiene and Inspection) Regulations 1995. Article 5(1)(b) of the Directive, in addition to laying down hygienic conditions for the production and marketing of poultry meat, prohibits the placing on the market of fresh poultry meat where agents have been used specifically to promote water retention. This prohibition was not transposed into the legislation by the (then) Ministry of Agriculture, Fisheries and Food who were formerly responsible for the Regulations.

2. Following the discovery in the UK of certain poultry meat preparations (a meat preparation is essentially unprocessed fresh meat to which ingredients have been added, for example marinated chicken drumsticks or chicken containing stuffing) imported from the Netherlands and Belgium containing pork and beef proteins used as water retention agents, and also containing excessive amounts (over 30%) of added water, the Food Standards Agency has been putting pressure on the European Commission to adopt a variety of measures. Such a practice was clearly unacceptable on religious/ethical grounds, and unacceptable to consumers generally. Although the Commission has not yet agreed to take the measures the UK has suggested, it has recently called on Member States to enforce the prohibition in Article 5(1)(b) mentioned above.

It has also said that it will ask its Food and Veterinary Office (FVO) to carry out inspections in the Member States in order to verify that this provision is being enforced. The FVO's mission in the UK on poultry meat has now been scheduled for the first half of 2005 and the water retention agents provision is going to be looked at. In addition to this, although the Directive is to be repealed on 1 January 2006, there is provision for the prohibition to be rolled forward by the Commission into the successor legislation.

3. The products in question from the Netherlands and Belgium are mainly frozen chicken breasts with added water and other water holding ingredients, i.e. poultry meat preparations. The trade in this type of frozen chicken product represents less than 5% of the overall UK chicken market. The frozen chicken breast products are sold mainly to the catering sector and compete with fresh poultry meat (i.e. chicken with no added ingredients), much of which is home produced. There is thought to be only one UK producer of this type of product.

4. However, enforcement of the prohibition at Article 5(1)(b) of the Directive will not of itself solve the problem of the use of water retention agents and the addition of excessive amounts of water in poultry meat products. This is because the prohibition relates only to the use of water retention agents in fresh poultry meat, not in poultry meat preparations. As a result the UK has asked the Commission additionally to act (i) to extend the prohibition to preparations as well as to fresh meat and (ii) to impose a maximum limit on the amount of added water in poultry meat products generally.

Purpose and Intended Effect
5. These Regulations will prohibit the use of water retention agents in fresh poultry meat and thereby correct an under-implementation of the EC Poultry Meat Directive 71/118/EEC. This lays down the requirements for hygienic conditions for the production and marketing of poultry meat, and prohibits the placing on the market of fresh poultry meat where agents have been used to specifically promote water retention. These Regulations amend the Poultry Meat, Farmed Game Bird Meat and Rabbit Meat (Hygiene and Inspection) Regulations 1995.

Risk Assessment
6. Article 5(1)(b) of the Directive addresses the risk of the fraudulent practice of adding water retention agents, and thus excessive added water, to fresh poultry meat. A prolonged failure to implement this prohibition would potentially bring food quality risks to consumers. This is because a failure to transpose this prohibition properly into national legislation would undermine the Food Standards Agency's efforts to persuade the Commission to take appropriate additional action against excessive added water and the use of water retention agents such as beef and pork proteins in poultry meat products. The UK is not in a strong position to argue for extension of the prohibition to preparations if we have not yet taken steps to implement even the existing prohibition.

7. Failure to implement the Directive fully and correctly would also be a risk to Government in that it would be a breach of the UK's obligations under the EC treaty. More specifically, it could attract infraction proceedings by the Commission under Article 226 of the EC Treaty with the possibility of fines. As mentioned above, the Commission has recently drawn attention to the prohibition in Article 5(1)(b) and has called on Member States to step up their enforcement of it. The UK will receive an FVO mission on poultry meat scheduled for the first half of 2005, where enforcement of the prohibition will be verified.

8. A failure in the long term to persuade the Commission to take the appropriate additional action the Food Standards Agency is proposing could also result in the loss of consumer confidence in chicken. With a total UK market value of around
2 billion, even a modest 5% reduction in consumption of chicken would cost the industry around
100 million. The proposed additional action would address a practice which is clearly unacceptable on religious/ethical grounds, and unacceptable to consumers generally. The practice does not, however, give rise to any food safety concerns.

Devolution
9. This amending Regulation will apply in Wales only. Separate but parallel Regulations will be needed in England, Scotland and Northern Ireland.

Options
10. In respect of this legislation the 'Do nothing option' is not an option, as it would lead ultimately to infraction proceedings against the National Assembly for Wales by the European Commission. Therefore, the 'Make the legislation' option, to implement the changes required to comply with European legislation, is being implemented.

Benefits
11. Making this legislation has five principal benefits:

• it would fulfil the UK's Community obligations, and thus remove the possibility of infraction proceedings against us
• it would give legal effect to part of the Food Standards Agency's overall objective, namely to prohibit the use of water retention agents in fresh poultry meat
• it would remove a potentially serious obstacle to the Agency's achieving the remaining part of its objective, namely to persuade the Commission to extend the prohibition to poultry products generally and to introduce a maximum limit on added water
• it would give legal effect to reinforced consumer protection in this area, thus improving consumer confidence
• it would further the objective of putting an end to a practice which is clearly unacceptable on religious- /- ethical grounds, and unacceptable to consumers generally

Costs
Economic
12. Both large and small businesses in the UK are thought already to comply with the requirements of Article 5(1)(b) of the Directive. This is because the use of water retention agents in fresh poultry meat would lead to a breach of the limits for water content in fresh poultry meat under the separate EU Poultry Meat Marketing Regulations. These Regulations, among other things, control the maximum amount of water that is absorbed by fresh poultry meat during its preparation and chilling. There are, therefore, no compliance costs associated with the legislative amendment. Equally there are no costs to consumers.

Social
13. The objective of the amendment is to assist the Food Standards Agency's efforts to put an end to a practice which is clearly unacceptable on religious/ethical grounds, and unacceptable to consumers generally. The use of water retention agents containing pork protein is clearly unacceptable to Muslim and Jewish consumers. There would, therefore, be social benefits associated with this legislation.

Environmental
14. There are no significant environmental costs or benefits associated with this legislation.

Financial Implications
15. There are no additional financial implications for the Assembly, or local authorities in Wales from the making of these Regulations.

16. There are no financial implications for businesses, charities or the voluntary sector. Both large and small businesses in Wales are already thought to comply with the requirements of Article 5(1)(b) of the EU Poultry Meat Directive. This is because the use of water retention agents in fresh poultry meat would lead to a breach of the limits of water content under the separate EU Poultry Meat Marketing Regulations. There are, therefore, no compliance costs associated with the legislative amendments. Equally there are no costs to consumers.

Equity and Fairness
17. The addition of water retention agents of non-poultry origin to poultry products, and the addition of excessive amounts of water, is unacceptable to consumers generally. The former practice is, however, particularly unacceptable on religious/ethical grounds. The use of water retention agents containing pork protein is clearly unacceptable to Muslim and Jewish consumers. Therefore, it is important, not least in the interests of equitable respect of religious rights, to put an end to the practice. Although the proposed Regulations will not prohibit the practice in poultry meat preparations, it will do so in respect of fresh poultry meat. Enactment of the amendment will also remove a potential barrier to the Food Standards Agency's achievement of its objective of persuading the Commission to extend the prohibition to poultry meat preparations.

Consultation with small business – the Small Firms' Impact Test
18. The Food Standards Agency has discussed the impact of the proposed amendment with the principal organisation that represents the poultry industry, the majority of whose members are small businesses. Their advice is that reflected in paragraph 12 above namely that there are no compliance costs associated with this amendment. The Small Business Service, therefore, concurs with our initial view that these proposals will not have a significant impact on small businesses. As part of the consultation process, we received representations from one organisation representing small businesses, which was supportive.

Competition Assessment
19. Given that there is no cost impact on industry, there is no negative impact on competition within the market as a consequence of the amendment itself. However, in the longer term if the Commission takes the measures that the Food Standards Agency is proposing this would allow domestic producers of fresh poultry meat to compete on more equitable terms with current importers of poultry meat preparations.

Enforcement, Sanctions, Monitoring and Review
20. The Meat Hygiene Service, which is an executive agency of the Food Standards Agency, will enforce these Regulations, in licensed slaughterhouses and cutting premises. Unlicensed premises will be subject to enforcement by local food authorities. These current enforcement and sanctions arrangements will, therefore, remain unchanged. The Food Standards Agency will monitor the impact of these proposals through its existing licensing and audit arrangements. Directive 71/118/EEC does not provide for any specific review date and will in any case be repealed by the coming into force in January 2006 of the new EU Hygiene Regulations. In these latter Regulations there is nevertheless provision for the prohibition on the use of water retention agents in fresh poultry meat to be rolled forward.

Consultation

With Stakeholders
21. The Food Standards Agency Wales carried out a consultation from 24 September to 17 December 2004. Eighty four stakeholders including consumer and industry representative bodies, farming unions and licensed poultry meat premises were invited to comment on the draft Regulations and the draft Regulatory Appraisal. No responses to the consultation were received in Wales. Five responses were received to the parallel consultation exercise UK wide, but offered no substantive comments. No objections to the proposal were raised, as it was acknowledged the proposed amendment was necessary and did not involve a new financial burden on industry.

With Subject Committee
9. There has been no prior scrutiny of the proposed Regulations by the Health and Social Services Committee. However, the Regulations were included in the list of forthcoming Food Standards Agency legislation notified to the Committee on 6 October 2004 (HSS(2)-71-04 p.5b, item no: FS 21 (04)), but were not identified for detailed scrutiny.

Summary and Recommendation
10. This legislation will allow the UK to fulfil its Community obligation to implement the provision of Article 5(1)(b) of Directive 71/118/EEC in full and will bring benefits to consumers at no extra costs for industry, enforcement authorities, or the Assembly.

Contact point:
Ms Jayne Griffiths
Food Standards Agency Wales
11th Floor, Southgate House,Wood St, Cardiff CF10 1EW
Tel: 029 20678908
Fax: 029 2068918
Email: jayne.griffiths@foodstandards.gsi.gov.uk