Environment, Food and Rural Affairs Committee 

Oral evidence: Brand Britain: promoting and marketing British food and drink, HC 1039

Wednesday 23 January 2019

Ordered by the House of Commons to be published on 23 January 2019.

Watch the meeting 

Members present: Neil Parish (Chair); Dr Caroline Johnson; Kerry McCarthy; Mrs Sheryll Murray; David Simpson; Julian Sturdy.

Questions 96 - 160

Witnesses

I: Jim Moseley, Chief Executive Officer, Assured Foods/Red Tractor; Ruth Edge, National Farmers’ Union; Dominic Goudie, Policy Manager for Exports, Food and Drink Federation.

Written evidence from witnesses:

– Assured Foods/Red Tractor

- National Farmers’ Union

- Food and Drink Federation

Examination of witnesses

Witnesses: Jim Moseley, Ruth Edge and Dominic Goudie.

Q96            Chair: Good morning.  Thank you very much for coming to our inquiry on food from Britain and Brand Britain.  It is a great pleasure to have you all here.  Starting with Jim, would you like to introduce yourselves across the panel, for the record, and we will get started?

Jim Moseley: I am Jim Moseley.  I am the CEO of Red Tractor Assurance in the UK.

Ruth Edge: I am Ruth Edge.  I am the chief food chain adviser at the National Farmers’ Union of England and Wales.

Dominic Goudie: I am Dominic Goudie.  I lead on exports and trade policy for the Food and Drink Federation, which represents UK manufacturers of food and non-alcoholic drink. 

Q97            Chair: Thank you very much.  How important is provenance to British consumers compared to factors such as price?  That is quite a good question, really, and Jim is smiling there, so I am going to pass that ball to you straight away, then perhaps Ruth and Dominic afterwards.

Jim Moseley: I can rely on some research that we have done at Red Tractor Assurance; there are two or three big pieces that we have done in the last 18 months.  If you ask shoppers the question, “What is important to you when you buy food?” the immediate answer will always be price and quality.  Price nearly always comes first.  When you delve a little deeper into what is meant by quality, some people will talk about the quality of the product on the plate—how it actually delivers in its eating quality and so on—but a lot of people will then go on to talk about how, by quality, they mean provenance, authenticity, safety and traceability.

Q98            Chair: What sort of percentage of those who you have interviewed would go on to talk about the provenance side?  Is it 30% or something like that?

Jim Moseley: The work that we did with the Institute of Grocery Distribution, which conducted the research for us, said that, in every instance, price and quality come up; if you like, 100% of the panel that they researched answered price and quality.  Using similar comparators, if you talk about where it has come from, it figures at about 83%.  How it has been produced—and by “how” they mean what impact it has had on the animal or the environment—sits at about 80%.  In that answer, a lot of people will then mention whether it is from Britain.  I anticipate that that figure probably comes up at about 80%.  They want a product from Britain. 

However, our slight note of caution is that, when you delve into the question about British, lots of people will say that British is great because it supports British farmers, it is probably fresher and it has done fewer road miles.  Generally speaking, the quality and responsibility that have gone into it are good.  However, when we go further and say, “What about food from other markets?” particularly English-speaking markets such as the USA or New Zealand, they will say that they are equally good, if not better.

Q99            Chair: Especially if the price of New Zealand lamb is slightly less; it is a little tempting, is it not? 

Jim Moseley: Exactly.  I would say that British people always like to support British product.  However, their perception is that other markets are equally as good, if not better.  As you rightly say, if the price is right, there is no barrier to buying those products from those markets. 

Q100       Chair: We did an inquiry into horsegate—a little bit of horsemeat getting into beef burgers, if you remember.  It was interesting to follow some of those food chains, which were remarkably long and complicated.  Then people really started to take notice of provenance.  The big retailers took notice of the provenance of food.  Are we getting enough support from the big retailers for British food?

Jim Moseley: We certainly get support from British retailers for British food.  That is unquestionable.  However, British retailers also have to keep their shelves full.  They want to supply demand year-round. Perhaps it is not the retailer but the consumer who demands year-round availability of products.  We like strawberries the year round, even though in reality they are a seasonal crop.  Therefore, British retailers, as well as supporting British, are equally concerned about keeping their shelves full, the availability good and the choice to consumers as wide as possible.

Q101       Chair: They are also concerned about price, are they not?  That can be difficult when producing sometimes.

Ruth Edge: With price being the number one factor, it will always be the case that they will support British as long as it meets those price and quality attributions.  We have seen retailers make a step change in the last few years; for example, Co-op has moved to 100% British for all of their fresh and frozen meat.  That was something the industry had not seen before.  We have seen a substantial step change in that direction.  We have not seen that as much in the food service industry. We have not seen big claims over British and big supporting statements from the food service industry like we have from retail.

Q102       Chair: That is quite a hard nut to crack, and we have been trying to crack it for a number of years.  If we keep asking about provenance in restaurants it helps, but sometimes you get a woolly answer as to where the meat has actually come from.  I am never quite sure.  It ought to be possible with a bar label on processed products to have a lot more provenance information about that processed product, certainly about the primary meat in it.  Is there a way we could do more?  What would you like to see?

Ruth Edge: From the NFU’s perspective, we would like to see much stricter regulation over labelling, particularly in relation to processed dairy products and things like that.  Very often the UK plant number is used and that is the only form of origin on the products.  That is more at the retail level. 

Within the food service sector, sometimes claims can be quite ambiguous.  Quite often, you might have a Cornwall-produced plum crumble, but actually the plums are not from Cornwall.  It has just been manufactured there.

Chair: They might be from Devon; you never know.  That would be very worrying for Cornwall.

Ruth Edge: My point is that you do not have the same stringency in the food service sector and it is a lot more difficult with it being so much more fragmented.  There is not the same focus as you would see in retail.  If that were to happen in retail, it would be on Twitter and there would be outrage and everything else, so we need to ensure that the same scrutiny is there and that we have the regulation to protect it.

Q103       Chair: We sometimes forget that over 50% of food is either processed or eaten out in restaurants.  We sometimes forget that, do we not?  We all like to target the retailers—and there is more we can do; we had Asda and Sainsbury’s in here, with their 10% savings, which I am not terribly impressed by, because those who supply will pay the 10%.  Also, Asda does not buy as much British as they should, so there is still work to be done on the retailers.  Going back to Red Tractor and all these things, if people were looking for that more when they went into restaurants or wherever, perhaps that would help.

Jim Moseley: It would help because, for meat, livestock or dairy products, everything under Red Tractor has to be born, reared and slaughtered in the UK.  There is no concern that it is coming from anywhere else.  That is a stipulation of the assurance scheme.  Clearly the work that we need to do is to increase the awareness of that fact with consumers.  If consumers were more aware of that and therefore could make a better informed choice, that would hopefully put more pressure on to both retailers and food service operators to buy more assured product.

Q104       Julian Sturdy: To come in on that, how are you proposing to make consumers more aware?

Jim Moseley: We started a campaign last September, which was spearheaded on national TV.  Julian, I would not expect you to have seen it, because it was probably targeted at a 40-year-old shopper.

Julian Sturdy: I am in my 40s.

Jim Moseley: You cannot be; you do not look that old, Julian—my mistake.  It was a targeted campaign at the principal shopper, which started last September.  We have limited funds, so it was only on air for about five weeks, but we intend to continue it this year, probably with three bursts of activity and then a lot of activity on social and in print.  All of it is designed to increase understanding among consumers of what it is that Red Tractor does and therefore what benefit it has for them.

Q105       Chair: That will come into Sheryll’s point in a minute.  Dominic, from a retailer point of view, naturally British food has a great advantage, with a British population who will buy British, but how do we balance between price and provenance?  How do we get retailers across the piece, not just the big ones but everyone, to stock more British food?

Dominic Goudie: I come at this from a slightly different place.  We are dealing in manufactured goods containing multiple ingredients.  Whereas labelling the origin of a cut of meat or a piece of fruit is relatively simple, when you have multi-ingredient products in small packaging, which already face so many demands around labelling of nutrition requirements, adding origin for each and every ingredient becomes very challenging.  The point was made around availability all year round; some of these producers are changing sourcing throughout the year.  Printing new labels each time you change the source becomes very difficult to do.

Q106       Chair: Is that not a bit of an excuse, really?  You have a computerised system now.  I know it is a fiddle and a faff to do it, but it could be done.  There used to be an argument that you would need a label a mile long if it had a list of all the ingredients in a processed product, but you could have a barcode now.  Not everybody does, but quite a lot of people like to check what is in there.  Do you not think, for the processor and when that product is retailed, there is perceived to be enough value in stating that it is a British product?  It is an interesting argument, I suppose.  When we go to a processed product, do we immediately forget about where it has come from?  It is almost a psychological thing is it not?  Now it has been mixed up, we are not as interested.  Is that partly the problem?

Dominic Goudie: No, it comes down to control and the ability to do that.  If you look at the nature and the make-up of the manufacturing industry, it is 97% small businesses.  They buy from their suppliers.  They may not have complete clarity on where those ingredients come from, and one particular source; it could be a mix of different places.  The wheat that goes into making a biscuit by a small manufacturer could come from a number of different sources.  They know that a certain amount of that is British throughout the year, but some may have to come from Germany, Canada or other countries.  They do not necessarily have the control to do that.

What businesses do and can do more of is around having clarity through their websites and using technology, as you suggest, to outline where they have commitments.  A number of companies and major producers do that, but they can run into supply problems when there is a bad harvest, and it can become incredibly difficult to continue to meet that commitment.  We have seen that a number of times over the last few years. 

Q107       Chair: There is always a danger with processed food, which goes back to the horsegate situation.  You had a situation where processors were being put under enormous pressure by retailers to buy those beef burgers at a very cheap price.  When you get down to too cheap a price, you probably cannot put beef in them anyway.  That is where there was a problem; they were not questioning it.  I can understand partly why, if you have some meat and you want to make a burger that is competitive, you are going to use that meat.  Not only in terms of provenance, but from a food safety point of view or an authenticity point of view, we should make sure we are eating what we believe we are eating.  It was not actually much of a food safety issue, but we were actually eating horsemeat when it said beef.  Should there not be more of an onus on the processor to check where it has come from?  If they had to put it on a label, they would check it more.  If you are a small or even a large processor, and you can get access to a cheaper ingredient, you may not ask too many questions.  If you then have to stick that on a label, you would surely ask more questions, would you not? 

Dominic Goudie: The driver for food and drink manufacturers is largely quality, as we have heard already.  I do not take the suggestion that companies are looking to buy the cheapest.  From my conversations with businesses, that is not the way they go about it.  Having a quality product that consumers can trust is number one to what they do.  As you say, there are two issues here: one is authenticity and the other is provenance.  On the authenticity side, a huge amount has been done by businesses to address just those challenges that you have described.  Businesses have shorter supply chains and work with their suppliers to understand where these things are coming from, but turning that into a practical ability to have a simple marque on your label saying, “These ingredients come from these markets”, becomes very difficult. 

Q108       Chair: I still think the principal ingredients, especially for the meat products, would be possible to put on a processed product.

Ruth Edge: The characterising ingredient is the most important part.  For example, if you have a chicken curry, the NFU would like to see it being very clear where the chicken is from, especially if it is named on the label.  We would not want to see every ingredient on a pizza, because that is ludicrous, but it would be good for consumers to be able to see the origin of those characterising ingredients.

Chair: Even on a pizza, there is a lot of cheese used.  There are principal ingredients.  I am not expecting every bit of spice, and I do not think we could grow every bit of spice here anyway so that it is home-grown.  That is not the issue; the issue is more what could be home-grown.  Jim, you wanted to make a point, and then I will move on to Sheryll.

Jim Moseley: I have a couple of points on that.  First, I am delighted, going back to horsegate, that not a single Red Tractor product was implicated in that at all, which talks a little bit about the robustness of its traceability and assurance. 

Secondly, following the horsegate situation, we introduced a set of rules building on exactly what Ruth has said.  For example, if you are making beef lasagne, beef is the characterising product. If it is 100% British, we would allow a processed meal manufacturer to state, “Made with Red Tractor beef”, knowing that 100% of the beef in the product is British and Red Tractor.  We have that.  It will not be a big proportion of all ready meals manufactured, but the ability for manufacturers to be able to do that already exists.

The last thing I would say is that as blockchain develops as a technology, it will become possible to do exactly what you were suggesting, Neil, and scan the QR code or barcode and see absolutely where every ingredient has come from.  The technology is a little way off at the moment, but I think it will come into food.

Q109       Chair: I am not a great believer in bringing in legislation sometimes, but when that technology is available, how can we encourage it and make sure more of the industry takes it up?

Ruth Edge: One of the big risks there is about who owns the data and how it is used.  There probably need to be some big discussions across industry to make sure there is a code of compliance or whatever it might be to ensure that everybody is working to that.

Q110       Chair: It is almost part of your intellectual property rights.

Ruth Edge: Exactly, and particularly at farm level there is quite a big concern about how much data can be accessed within the blockchain.  There are fantastic opportunities for consumers, as Jim has said, but we need to be careful about how that is used and the accessibility rights to that.

Chair: It would be a big win if we could get processed food into it; it really would. 

Q111       Mrs Murray: I know you have covered this a little, but is there any evidence that assurance schemes influence purchasing decisions?  If somebody went into a supermarket and saw Red Tractor, do you have any evidence that that would persuade them to buy that product?

Jim Moseley: As part of running the TV campaign and the broader marketing campaign last year, we did some research pre and post that campaign.  The kinds of indicators we were looking at are, first of all, simple awareness: “Are you aware of a scheme?” I am delighted that, post advertising, the awareness of Red Tractor is higher than Fairtrade, for example.  I personally think Fairtrade is a reasonably well understood scheme and that people know what they are buying when they choose Fairtrade, but our awareness is higher. 

Another area that we look at is purchase intent.  We simply ask the question, “If you see this logo or symbol, does it have a positive impact on your purchasing?”  In other words, are you more predisposed to buy it?  Around 61% of main shoppers—and we have a panel of around 2,000 adults in the UK, of which 1,600 are the primary shopper—say they are positively inclined to purchase. 

That is a research figure and a statement that you could use in response to a question.  Of course, what we are interested in is actual behaviour in store.  I would say the actual behaviour in store is much lower at this point in time.  However, there are a number of people, we know from our focus group work, who are aware and will look for it, and particularly will trade up to it when there is an equivalent product.  If you have a pork chop and a Red Tractor pork chop, we have clear evidence that people will trade to the Red Tractor product.  As we increase our education and awareness, my hope is that that figure will continue to rise.

Ruth Edge: To add to what Jim said, on that side of things, it is really important from a business-to-business perspective as well, which is sometimes overlooked.  There are two aspects to Red Tractor.  There is the logo the consumer sees, but we still see all the major supermarkets and many of the large food service brands demanding Red Tractor as a requirement to access their consumers.  Even those that are not using the logo such as Sainsbury’s are still stipulating that everything must be to Red Tractor standards or equivalent.  That is an important point from an agriculture and farmer perspective, because it stops the divergence of lots of different brands going off in different directions, which we have seen to some degree.  Red Tractor is still very much the core aspect of that.

Dominic Goudie: This is not specifically on Red Tractor, as other panellists here are more expert on that than I am, but it is about anything businesses can do to distinguish the quality of what they are doing.  I come back to the point that food and drink in this country is about quality.  We are not there to compete against the world’s cheapest producers, because the UK is not set up to do that.  We need to compete on quality and, to be able to export, we need to highlight that and find ways to do it.  Red Tractor is a critical one for the meat sector in doing that.

Q112       Mrs Murray: What about other assurance schemes, because the question was about assurance schemes in general?

Dominic Goudie: In general, other assurance schemes are very positive, if there is clarity about what they stand for and that message gets across.  It is about UK food and drink, and the best possible quality that can be delivered.

Q113       Mrs Murray: What would help the typical consumer to understand the standards that lie behind the various logos on their food packaging?  A lot of people will go in and buy something because of a specific logo, but what would help them to understand that the logos are there because this food meets a certain quality?

Chair: Are there too many logos?

Jim Moseley: For assurance schemes in the UK, Red Tractor is by far the biggest, but there are also the Soil Association and Organic Farmers & Growers, which are the two bigger schemes with the organic sector, RSPCA for animal welfare, and LEAF, Linking Environment and Farming, particularly in fresh produce.  All of them are extremely good schemes.  Some of them are what I would describe as slightly more single-issue schemes, so focused particularly on environmental enhancement or animal welfare.  To be honest with you, those schemes rely on Red Tractor as being the underpinning core scheme, on which they will then build elements on top.  We already have relationships with LEAF, RSPCA and the Soil Association, for example, in doing the audits on farms.  We have a core standard and they build on top. 

I personally think all the schemes are very good.  In terms of understanding by the consumer, it depends a little on how those schemes have been marketed and, generally, awareness of things like organic versus environmental enhancement, which is not perhaps as well understood.  Something like the Soil Association and the word “organic” are recognised by consumers.  They might take slightly different messages from them.  A lot might take it being a naturally produced product, less processed or whatever, but they are well understood.  The schemes are there and they are very robust, but knowledge by the consumer of those schemes is dependent on how those schemes have been marketed.  Out of all of them, organic is probably the best understood. 

Ruth Edge: I would concur with what Jim said.  To add to that, it is about targeting those markets.  For example, we have seen Arla has rebranded all of their organic milk to now be free-range milk, because they believe that that concurs more with the consumer, who will have a greater understanding of what it means. 

At the beginning, Neil asked about the different players in terms of picking products.  All of the schemes that Jim has mentioned are quite niche, so something like organic is still only 1.5% of our grocery retail market, which is probably mainly due to price.  Often there is an understanding that people are not willing to trade up when it comes to the point of purchase at the shelf-edge.  “Are you concerned about animal welfare?  Are you concerned about the environment?”  “Yes”, but are people prepared to put their money where their mouth is when it actually comes to purchasing those products at the till?  We certainly do not see that.  Even something like RSPCA products and things like that are still fairly small proportions of the market.

Q114       Chair: Before we finish this question, Jim, you said in answer to Sheryll’s question that 61% said that provenance is very important but, when they actually shop, that drops significantly.  Can I press you a little on how far?

Jim Moseley: I do not know the number, Neil.

Ruth Edge: I have some stats, if they help, Neil.  I am pretty sure it is an IGD stat, and I can follow up afterwards to double-check, because I have not written this down.  They asked about if prices were to rise.  If British cost at shelf-edge rose by 10%, 30% of consumers would change down to foreign products.  If the costs rose by 25%, that would rise to 60% of consumers moving to foreign products if they were cheaper.

Chair: There is a degree of how much the price goes up and how it affects their buying and what they would buy.  That is quite logical, but there is obviously work we need to do.  That is why we still have to remain competitive.  It is an interesting statistic, because most people will pay a little bit more, but resistance naturally comes in as prices go up significantly, which is understandable.   

Q115       Julian Sturdy: This is to follow up on Sheryll’s question.  Ruth, you mentioned that Red Tractor underpins a lot of the supermarkets’ and retailers’ brands, but also how they buy products and the standards they want to buy products at, but not all of them.  You mentioned that Sainsbury’s is not using the logo.  Is there anything we could do to encourage them to start using the logo?  Would that not help?  Are they branding in a different way but still branding it British?

Ruth Edge: I apologise for me smirking, Julian, but Jim and I have spent a significant period of time talking about and putting effort into this.  That is why I am smiling at your question.  Yes, Sainsbury’s dropped the logo, I believe in 2012, and stopped using the logo then.  That was because they believed that their consumer recognised the Sainsbury’s brand over the Red Tractor brand, and they felt that there was cluttering on the pack.  They wanted Sainsbury’s to be the standout brand and for their consumers to affiliate with that, essentially, rather than other external bodies. 

I know Jim has done quite a lot of research and is hoping to use the research he has done as a result of the latest campaign to put forward to Sainsbury’s to show the evidence that, actually, consumers really value the logo and are looking for it.  M&S is the other one that does not use the logo, but again uses it in a business-to-business capacity.  It is definitely the NFU’s and Red Tractor’s role to continue to lobby those businesses, with the hope of bringing them back into use of the logo.

Q116       Julian Sturdy: There is an element of trust there as well, surely.  I am not going to name a supermarket or a retailer in this process, but say there was a shortage for any particular reason, and to keep their supply going they used another supplier that was not up to Red Tractor standards or was not British, but they still had it under their brand label, which they could technically do. That is not technically mis-selling, but it is slightly misleading, is it not? 

Ruth Edge: They all have very clear specifications behind the scenes, in a business-to-business capacity, meaning they are stipulating Red Tractor.  Within organisations, you will know that it is Red Tractor, but you are right that that is not apparent to consumers.  What we have to do is work together to give them a reason to believe again, and give them reasons as to why they have to come back in.  What you are saying would be technically possible, but I do not think you would ever see it in reality, because it would undermine both of those brand names.  Obviously their paramount concern is protecting their own brand and ensuring it lives up to the ethos that consumers expect. 

Q117       Julian Sturdy: The message needs to be that the Red Tractor label enhances their brand.

Jim Moseley: Exactly, and I am under no illusion that anywhere where we put our logo, whether on a retail pack or a restaurateur’s menu, has to add value to that parent brand or offer.  At the moment, Sainsbury’s does not necessarily think it is adding that value to the Sainsbury’s brand.  Tesco takes a different point of view, as does Asda, Morrisons, Co-op and lots of others.  My job is effectively to convince or indeed identify why the Red Tractor logo can add value to the Sainsbury’s parent brand.  If we can do more work to educate consumers, it will become more interesting for Sainsbury’s to put it on.

Q118       Chair: Giving the ball back to you, is there something more that Red Tractor needs to do to make it more attractive?  Sainsbury’s is not doing particularly well at the moment.  It may not just be the fact that they have not got Red Tractor on their product, but what is the other side you can do to make Red Tractor more attractive and recognisable?  It is quite recognisable, but I think it could do a bit better.  Have you given thought to that?

Jim Moseley: It is probably down more to our finances than anything else.  I appreciate the advert is only a part of the total campaign we have, but it worked extremely well.  All our research and evaluation scores have proved that, but not many people saw it, because our weight of media was relatively low.  The more we can do on that, the more we can educate consumers.  That is at least a starting point.

Behind that, the beating heart of Red Tractor is still its technical standards.  For us to really add value to the retailer’s own brand, our standards have to reflect what they want from due diligence and the whole of the supply chain, and there has to be a very robust scheme to deliver that.  We have purposes for lots of different stakeholders but, if I take retailers and food service operators, we have to get to a point where they absolutely insist on that scheme as part of their due diligence.  That is constantly what we are looking to try to do. 

Q119       Kerry McCarthy: Can I ask more specifically about animal welfare in terms of promotions abroad?  There is already some confusion here or a lack of recognition of what the different branding marques and so on mean.  There is some misleading advertising or marketing of food, which you saw with Tesco and the fake farms that they have created.  Overseas that must be even more difficult for consumers.  Does it actually matter?  Are there countries where British produce would do well because it is seen to have higher animal welfare standards?

Jim Moseley: The world of export, in my section of primary agriculture, is driven more by AHDB than it would be by Red Tractor.  By the same token, we did a piece of combined research with AHDB in 2017, because it was our feeling that Red Tractor, both as a business-to-business tool for selling into an export market and potentially as a consumer brand in its own right in those export markets, was something that we should be looking at.  When we did research in those markets—and typically the USA, China, India, Japan and the Gulf were the sorts of markets that we were looking at—I do not necessarily think the welfare of the animal was particularly high, but food safety and traceability tend to be very high demands in those markets.  Therefore, a lot of those export markets play to the strengths of British production.

Legislation for animal welfare in Britain is already at a good level compared to the rest of the world and some of those export markets.  Red Tractor sits above that.  I am making a few generalisations here.  Then you have RSPCA and organic, all of which have very high welfare standards within them.  In terms of the ability for this market to export using animal welfare as a criterion, we have it all.  It is already there.  Whether those markets are driven more by safety and traceability, we have to look market by market.

Ruth Edge: To add to Jim’s point and pulling on the same research, it depends on the market.  Germany is slightly more concerned about welfare, but the research that was done by AHDB showed that, in most countries, it does not feature as highly as you see within the UK.  We are quite unique from that perspective.  The UK, Canada and China are still dominated by price, whereas China and Japan were about food safety as the key, number one factor.  As Jim said, the assurance scheme we have gives us a brilliant platform and a brilliant opportunity to be able to talk about that and our traceability.  Those assurance schemes are unique to this country.  Again, to tell that story, we have to start with the basics, explain what an assurance scheme is, how it is used and what the benefits are, because these countries are not used to seeing the likes of Red Tractor within their own countries.

Dominic Goudie: I would love to disagree with them, but I cannot.  It is clearly the case that in other markets animal welfare is not front and centre of consumer thinking.  For UK food and drink as a brand overseas, the hallmarks have to be around quality, safety, choice and innovation.  We create new products that consumers overseas want to add, which they cannot get elsewhere.  Animal welfare is critical to that, because it is a demonstrator that we have the highest standards throughout the food chain to deliver it.

Q120       Kerry McCarthy: Eggs is the most obvious example of where labelling, as to whether they were free-range or battery, changed people’s habits, and it ended with battery cages being outlawed.  Does having an overarching brand that covers lots of different things mean you have less power to shift opinion in that way?  With eggs it was totally in people’s faces as to what sort of egg they were buying and the link to the conditions that the eggs were laid in.  Something like Red Tractor covers a number of things.  RSPCA is more specifically an animal welfare marque, but does that mean it is more difficult to influence consumers, because you do not have an emotional tug in the same way as you do with eggs?

Ruth Edge: The back end of that question is for Jim, but there are a few points of clarity I want to add to your points, Kerry.  Within eggs, we have very clear regulation that comes down from Europe in terms of what the labelling of those looks like, around free-range, barn and enriched cage production.  Essentially, that debate was hijacked by a 12-year-old girl, her letter and mass media.  Until that point and still today, sales of enriched cage eggs sit at around 40% to 50% of the market.  Even though that labelling is clear, people are still happy to accept that and pay that price for that welfare level. 

What we have seen is that the brands want to take a position and essentially create a halo effect by meeting the social media pressure that was created as a result of this letter, by making the commitments they have to move to cage-free enriched.  Even today, around 40% of the market is buying enriched cage production eggs.  To say that people are changing their habits as a result of that labelling is simply not true.

Q121       Kerry McCarthy: Quite often in the Committee we have been told that it made quite a big difference.  What was the free-range proportion of the market until this happened and the eggs were stamped?

Ruth Edge: It has only moved by about 10% of the market, and that is mainly where retailers have changed the shelving and essentially the offering to consumers, as a result of their move away from enriched cage.  If you go into Tesco at the moment, enriched cage will be at the bottom of the shelf, presumably for them to prepare customers to move to whatever they choose to, whether that is barn or free-range.  Essentially, the commitment they have made is around a halo effect; it is not around customers not buying enriched caged eggs, because that is still a significant proportion of the market.  We are not talking about 2% or 3%.  It is still a significant part of the market.  I am sorry; I just thought it was an important point of clarification.

Jim Moseley: On the second part of your question, you are absolutely right.  It is not easy or crystal-clear to consumers where a Red Tractor standard on animal welfare is and, let us say, RSPCA or another scheme.  Part of the problem is that Red Tractor has a number of different systems operating under it and that is not widely known.  If you were to read the press, you would think we only ever cover very intensive systems at the lowest level.  That is not the case at all.  For example, Red Tractor has a free-range standard for poultry.  Red Tractor has standards for outdoor-bred and outdoor–reared pigs, but not everyone recognises that.  The reason is that when you look at the number of processing systems that can operate in the UK, there are several of them.  It is important that an agency like Red Tractor is ensuring the animal welfare standards in each of those production systems. 

We span the whole range of production systems, but clearly the RSPCA is better known for a much higher level of welfare.  For example, if it came down to rearing chickens indoors, under RSPCA the stocking density is much less than it would be under Red Tractor, and Red Tractor is less than under British regulation, and British regulation is less than European regulation.  In some parts of the world, there is no regulation at all.  If you have that kind of scale, you get a feel for where Red Tractor is.

Q122       Kerry McCarthy: Do people realise that, though?

Jim Moseley: No.  As I say, it is not known by consumers and it is a difficult message to communicate.  The other thing is we also need to be a little bit careful about when we communicate those sorts of things, because people become very focused on the single issue around welfare, but that is not everything that people are looking for.  If we look at the use of medicines in farmed animals, Red Tractor has a very clear position and aims to reduce the amount of medicines in farmed animals.  The Chief Medical Officer Sally Davies has mentioned that in press.  The RSPCA does not really have a position on antibiotic use in farmed animals, which for me is a weakness of their scheme.  As I say, it is not easy just to compare one scheme to another, but you can compare specific standards to another scheme. 

One thing that we said at the end of last year is that Red Tractor provides this core and very comprehensive scheme that every retailer uses as part of their buying specification, but we are aware that there are some consumers, perhaps more in the UK than in some of the export markets, which look for much higher welfare.  What we are going to do is develop our own Red Tractor module around the higher welfare specification.

Q123       Chair: You are going to change the model.

Jim Moseley: When I say we will change the model, the core standards will remain and the core standards will be the vast majority of what we do.  To take chicken, RSPCA is about 1% or 2% of the market, because the standards mean the cost of production is more than double that of a Red Tractor indoor product.  We will then have an additional module that says, for those consumers who want to buy a particularly high-welfare product, we will have it under the Red Tractor banner.  The challenge is then how we communicate that.

Q124       Kerry McCarthy: There have been some undercover reports in the press about Red Tractor farms not meeting the standards that you would require.  There was Rosebury pig farm, which is in Eaton Bray in Bedfordshire.  There was Hogwood Farm, which supplies Tesco, and Poplar Pig Farm near Hull.  Does that damage Red Tractor’s reputation?  Do you see any sign that people do not rely on the standard?  I suppose a lot of this is anecdotal, because you are not able to separate out animal welfare, but what is your response to these reports, because there have been a few?

Jim Moseley: Yes, there have probably been three, as you mentioned, although one of them was more to do with animal abuse, which could happen on any farm.

Q125       Kerry McCarthy: What is the difference between animal abuse and animal welfare?

Jim Moseley: What I meant is that they were physically abusing an animal, as opposed to a farming practice.  Hogwood Farm is Red Tractor-assured, Tesco-assured and fully assured.  One might question why it is being picked on by the animal rights groups, because there is nothing wrong with that farm and the standards it is producing to.  The subjects of some of the other exposés—you mentioned Rosebury Farm and The Times—were expelled from the Red Tractor scheme because they were doing something that was not permitted under Red Tractor but is permitted under British legislation. 

It is true that we had three exposés, and we have had more expulsions than that, because we expel members as well.  We had 262 expulsions from the Red Tractor scheme in the last year, where we have found breaches.  Of course it damages our reputation when we get an exposé, but it is worth bearing in mind that we have 46,000 members and we are talking of the three exposés that you have mentioned.

Q126       Kerry McCarthy: The organisations involved would clearly not have the resources to do a lot of farms.  Viva! did most of them.  That is a very small Bristol-based organisation, which is not going to be able to do a high proportion of the 46,000.  You cannot assume that they happened to have found the three that are problematic and that the rest are all okay.

Jim Moseley: There are a lot more than Viva!.  There is Animal Equality and lots of other agencies.

Kerry McCarthy: They are all small organisations. 

Jim Moseley: What we need to do is just put into context the number of exposés versus the number of members that we have who are adhering to the standards every day of the year and are producing at a high standard.  Plus, for the exposés, the evidence on the front of The Times was standard farming practice. 

Q127       Chair: You obviously do inspect and take action against those that you do not believe are up to standard.

Jim Moseley: We inspect, and we are changing our inspection regime, as we announced last September, to be more risk-based.  We will increase the number of inspections where we find non-conformance.  That will inevitably lead to more expulsions from the scheme, but at the end of the day, as I say, it is a very big scheme with a lot of members.  While any exposé is bad news and a breach of our standards, which is something we have to try to eliminate, they are a small proportion of the total membership of the scheme.  All of the major retailers continue to support Red Tractor.  Because they are so concerned about their own due diligence, if there was a major problem with the scheme, other people would move away from it, and they have not.  If anything, they are supporting it even more strongly.

Ruth Edge: To pick up, because Jim did not go into much detail, the move towards risk-based will mean, in terms of the conversations that we are having with our farming members at the moment, they will feel like they are under 365-day-a-year surveillance, effectively.  There will be more pressure on them to deliver against those standards.  While it is a step change for the farming industry, for Red Tractor and the robustness of the scheme, it is a step in the right direction to ensure we have that robust compliance.

Jim Moseley: The increased inspections will also all be unannounced.

Chair: That is always a good idea. 

Q128       Dr Johnson: Just to pick up on something that you said about the different type of Red Tractor standards, you talked about how outdoor pigs and indoor pigs and outdoor chickens and indoor chickens have different standards.  Obviously you have a standard that relates specifically to the outdoor environment, but if I buy a chicken that is Red Tractor in the supermarket, how will I know the standards?  Do you publish the standards you are keeping it to?  If they are outdoor free-range chickens, are there other aspects of the standards that are higher, other than the fact that they are kept outside, or not?  How would I find that out?

Jim Moseley: The standards are different for free-range and for indoor-produced, because there are different drivers in the farming process that we have to focus on.  Use of medicines is an example.  The standards are all publicly available on the Red Tractor website, but from the example you have described, what you would be buying is free-range chicken with a Red Tractor logo on it or chicken with a Red Tractor logo on it.  It is likely that chicken would be the indoor-produced product, and free-range would be specified as free-range.

Q129       Dr Johnson: The standard that you hold the farmer to is higher for the free-range chicken in more respects than just where it is kept.

Jim Moseley: I am not sure the word “higher” is right.  There might be slightly different standards for a free-change chicken than for an indoor chicken, yes, but the main differentiator is the fact that it is free-range.

Ruth Edge: It is mainly because the production system is completely different.  The whole layout of the farm and day-to-day activity on the farm would be completely different for both farms.  The standards may well not make any sense at all, if you transferred them like for like.

Dr Johnson: It is different, rather than better.

Jim Moseley: It is different, rather than better—and publicly available on the website.

Q130       Chair: Before we leave this question, I will go back to my pet subject, which is processed food.  Take eggs.  A lot of eggs on the shelves are free-range and barn, but when it comes to processed food, that is where your cheap imported egg comes in, which reduces the animal welfare standards across the piece.  That is where we have to do more with the labelling.  I think I am right in saying that nearly 50% of egg is used in either powder or liquid form.  A lot of it is liquid today.  I am sorry to keep repeating myself, but how do we make sure we know where that egg has come from in that processed product?  It is important.  People are interested, because enriched cages are much better than the standards in America and maybe the Far East and Brazil, where a lot of the competitors come from.

Dominic Goudie: I must confess I am not a huge expert on the egg market and where our members are sourcing from.  Remembering the changes that happened around the time of moving to enriched cages, it was my understanding that the vast majority of the imported stuff would be European-processed.  The issue was more around the processing capacity to produce the types of products that manufacturers need, whether powdered or whatnot.  A problem that we find across the manufacturing industry is that there is a lack of capacity to produce the types of ingredients that we need here.  That seems to have been the barrier to it, but it was not necessarily the case that we were using product that was of a lower quality, because it still met EU standards.

Ruth Edge: There would be the ability to grow that market if there was a demand there.  I know that some businesses have done some trials looking at hens that lay only white eggs, purely for the liquid market, because you have a lower cost of production with those animals and that process.  If the demand was there for manufacturers, processors and retailers, the UK industry could meet that demand.  We have a slight issue with the capacity of the actual liquid-egg manufacturing plants. 

Q131       Chair: Do you mean the ability to create the liquid egg?

Ruth Edge: Yes, I believe there are only two or three in the UK versus it being quite a big business on the continent.  You need specialised equipment to be cracking eggs for liquid, segregating and all that side of things, but there is definitely an appetite from the poultry industry.  They are up for delivering this if the industry wants to move in that direction. 

On your point about labelling, some retailers’ higher brands, such as Tesco Finest or Sainsbury’s Taste the Difference, will stipulate, and it is normally free-range, so there is a positive message on the label.

Q132       Chair: It is possible to do it; it is just that not all retailers and manufacturers choose to do it.  If you are buying a quiche or whatever, you would expect that egg to have met a reasonable standard, and would almost take it for granted, but I do not think we should take these things for granted.  I would like the ability, every now and then, to go in and check on a barcode label where that processed egg has come from.  That is going to be more and more important, especially as we leave the EU. 

Ruth Edge: I am sorry to go back to characterising ingredients, but it is particularly important for eggy products.  You mentioned quiches, but also Scotch eggs or salads that have a boiled egg and things like that.

Q133       Chair: You might buy egg sandwiches on the motorway services.  All of those things are where a lot of this other product potentially can be—and I am not saying it is; some of it might be very good, but if it is very good, why do you not state that it is very good?  That is my argument.

Dominic Goudie: If it was as easy as that, people would be doing it.

Chair: You have to do better.

Dominic Goudie: I have to defer to colleagues who are experts on the labelling side.  I do not think it is as simple as that.  I could come back with some supplementary comments, but I would not like to speculate.

Chair: I still think you could do better, and we will pursue that one quite vigorously. 

Q134       Dr Johnson: This is a question for Ruth about the NFU’s supermarket sourcing guide.  What specifically does that do, and what difference is it making?

Ruth Edge: We launched the initiative back in 2016.  At that time, there were huge issues within the dairy sector, which was under a lot of pressure, so we were receiving a lot of consumer queries, or queries from our own members who were interested, in terms of where they could shop to support British product.  We devised the retailer guide, or the shopper guide, as you have explained.  Since its inception, it has been viewed over 3,000 times.  I would view it as more of a lobbying tool for us, because we contact all of the retailers on a regular basis to ensure the information we have within that chart is correct, so it allows us to check with them fairly frequently to understand what they are doing and whether there have been any changes of policy. I am frantically looking at my notes, because this is scribbled down somewhere.

As a result of that, we have seen a large change in terms of the retailers moving policies.  As I mentioned earlier, Co-op is moving to 100% of British meat on fresh and frozen.  We have seen Aldi and Tesco move to 100% British on their own-label yoghurt.  I do not put this down just to the retailer sourcing guide, but it helps that we are checking in with them regularly and are able to check that information.  It provides a clear justification from the NFU as to where we want to see improvements made.

Q135       Dr Johnson: I remember the Co-op was advertising their move to British meat produce very well.  Are you aware whether that has made a difference to sales or to shoppers’ habits?

Ruth Edge: The Co-op has done quite a lot of research in that space and found, similar to the eggs I talked about, that it has had a halo effect around the Co-op brand and a feel-good factor for people towards the retailer, particularly because they are keen on local messaging and supporting communities.  They feel that those two areas go hand in hand, and that is an important message that they should be articulating to their consumer. 

What I would say on that is not to forget that price is king.  Price is the number one reason why people make the shopping choices they do.  A good example we have had with Co-op is that British lamb increased in price by 23% back in 2016.  They had to pass a large degree of that price on to the consumer and, as a result of them being 100% British, Co-op felt they lost quite a lot of sales, because they were not able to compete with their competitors, which were importing cheaper New Zealand product.  They were absorbing all of that cost within their own business.

Q136       Dr Johnson: That is a disincentive for other manufacturers to do the same.  How many of the major supermarkets that you study now stock all British meat?

Ruth Edge: Co‑op, Morrisons, Aldi—and Marks & Spencer, but it has New Zealand lamb. For core product all year round, Morrisons, Co-op and Aldi do.

Dr Johnson: We know where to shop, then.  Thank you.

Q137       Chair: How much effect has the online supermarket sourcing guide had?  Have you had a lot of take-up?  Is it just farmers who go on to it to see what is happening, or does the general consumer?  That is what we are after, are we not?  I am not criticising it for a moment—it is a really good idea—but we need to get it out there more.  What are you doing to be really proactive?

Ruth Edge: It is difficult to tell that.  I cannot tell from the statistics who has been using it. 

Q138       Chair: You must know how many hits you get on it.

Ruth Edge: Yes, we have had over 3,000 on it, but I cannot say who those individuals are.  Realistically, the NFU is not particularly well placed to speak to the consumer.  We are not a consumer organisation; we are a lobbying membership organisation.  While we have done that piece of work, there are probably others better placed to promote that to consumers.

Q139       Chair: Should Red Tractor be doing it?

Ruth Edge: That is a question for Jim, is it not?

Chair: Exactly, so I am going to pass the question over to Jim.

Jim Moseley: What is the precise question, Neil?

Q140       Chair: If people want to know the source of food online, should Red Tractor have an online situation, so you know where to go to get that food, or do you just take for granted that we get it?

Jim Moseley: Absolutely; we are trying to persuade retailers to change some of their online systems to reflect that.  In fact, some already do.  If you go in and look for a specific product, you can see that it is Red Tractor-assured or, for example in Waitrose, you can see that it is LEAF-assured.  They will make reference to the assurance scheme under the detailed product description.  We are talking to them about whether there is a Red Tractor page or pages, where all the products that are assured, whether Red Tractor, LEAF, RSPCA or organic, are collected in one area.

Chair: It would be a good idea if you could have all the labels there.

Jim Moseley: We are having that ongoing conversation.

Ruth Edge: It has also been mentioned—and I know a couple of retailers have looked into this, but it has not gone any further—whether there should be almost a “buy British” button for online sales, so that people can filter like you filter whether you want frozen or fresh vegetables.  You could filter only to have British products or whatever it might be. 

Online labelling is a massive problem.  The legislation and regulation is that it should be exactly the same as you see in store, but very often it is not and is very confusing.  With Red Tractor, you often see a picture of a piece of meat that has a Red Tractor logo in the image, but when you scroll down to the origin of the meat, it might say “New Zealand or British”, but the consumer cannot actively choose which one of those to receive in the online shopping basket.  There is a lot of work to do on online information.

Q141       Dr Johnson: Is that allowed under the laws of advertising?

Chair: It is borderline.

Ruth Edge: It is allowed because it is clear, as it could be either/or.  Once you receive the product, the labelling will be very clear as to what the origin of the product is, but that you cannot actively choose is wrong.  If you were in the shop, you would actively choose, would you not?

Dr Johnson: Presumably when you order it, you are paying a price depending on which you get.  The incentive for the supermarket is to provide you with the cheaper one.

Ruth Edge: Some lines will be dual origin.  Some lines will offer exactly the same product, but it might be New Zealand and British.  The product will appear like for like on the shelf and there will be no price difference between them.  They are under the same SKU or barcode.  They are effectively the same product, but with multi-origin aspects to it, which is what these products online are.  You are right that some of them will be specifically British or specifically New Zealand.

Chair: We are having more and more online sales. 

Q142       David Simpson: Further to Caroline’s earlier question, Ruth listed a number of supermarkets that changed over to British meat.  Can you clarify for me whether that is red meat or all aspects of poultry, lamb and meat altogether?

Ruth Edge: That is all fresh meat, so anything that would appear in a fresh pack, which is not frozen, not processed and very often not with a rub or sauce.  Yes, it is all chicken, red meat and pork.

David Simpson: Everything is British of those.

Ruth Edge: The only slight caveat is probably sausage and bacon, which are dealt with as a separate category.

Q143       Julian Sturdy: I want to move on to sector deals.  Dominic, I wanted to talk to you about the Food and Drink Federation’s proposal for a sector deal.  We have eight sector deals at the moment, but we do not have one for food and drink.  You have a proposal with BEIS at the moment.  How confident are you that it will be able to promote British food and drink and that BEIS will take this forward?

Dominic Goudie: There is no certainty, because we are in the middle of negotiations at the moment.  I can say that we have had a positive response from the industry, which is critical to having support from all parts of the supply chain behind it.  We have also had a positive response from the Secretaries of State in Defra, BEIS and the Department for International Trade.  There are good intentions all round, but we are in the depth of negotiations around how it will be delivered, the allocation of costs and exactly how it will work, so there is a way to go on it.  We need to pin down those fine details, so they satisfy the needs of industry and are deliverable by Government, on the basis that there is no additional money.  There is a lot of juggling needed on the Government side to find ways of delivering the asks that we have of them. 

It is challenging.  I am reticent to be the first to say the “B” word today but, in the context of Brexit at the moment, civil servants are increasingly being pulled away to focus on no-deal planning.  That introduces an element of risk that could slow down our ability to put it in place.  The support we have seen from all sides to do something on this gives me a great amount of optimism that we can deliver something that is very positive for the industry, which helps push UK food and drink more consistently overseas, and plug some of the gaps in support that currently exist for producers in various regions.

Q144       Julian Sturdy: What can it achieve?  Do you have any hard examples of where you think it can make a difference?

Dominic Goudie: The one that we repeatedly look to is England.  Our most recent export snapshot that we published a few months ago included a regional breakdown.  That found that Wales in particular, but also Scotland and Northern Ireland, were outperforming England.  They have dedicated support in those regions and a real focus on food and drink, but there is nothing that pulls it together in England.  England has to fall into a UK-wide campaign.  There are many producers in this region that describe this as being a bit of a postcode lottery; they just do not have access to the resources they need.  There are companies out there that can start exporting, and we are looking at what those numbers could be, building some targets to get increased numbers of large producers that do not currently export out there in markets, and to get the mid-sized businesses that are so focused on delivering to large supermarkets looking elsewhere.  They need that support to get them going and help them crack into that market, because the demands of the big UK retailers are so high for them to focus on maintaining the share of market they have.

Q145       Julian Sturdy: You talked a little about timescales and how they might be slipping.  What is your aspiration for timescale at the moment?  When you are talking to BEIS at the moment, do you have an idea of when they will come back with a decision?

Dominic Goudie: There are a lot of different elements to the proposals that we have put out, and bits of it are happening now.  There are efforts going on overseas to put in place additional support in the priority target markets, both from the governance side but also from the industry side.  The UK India Business Council is working with a lot of food and drink producers to put in place a dedicated food and drink post out there to help companies. There are elements of what we are proposing already happening, which we need to factor into our proposals to make sure that any new elements we introduce as part of the official sector deal do not duplicate efforts that are already happening. 

There are significant elements that could move quite quickly.  We are currently in a debate.  One of the primary elements of our proposal was around building an export portal for food and drink that creates a single point of contact for food and drink businesses across the industry to say, “I produce this product or this commodity.  I am looking at this market and I am in this region”.  It gives them some pointers for where they can get that support to simplify what is a very fragmented landscape.  We said at the outset of the proposal, as FDF, that we would lead that piece of work and finance a big chunk of that—the lion’s share of it—but the Government has the GREAT portal.  There is an opportunity perhaps to start introducing some of the elements we are talking about through the GREAT portal now, so we do not have to go through the entire longwinded process of setting up a brand new website.  Those things are in live discussion now to start delivering very quickly. 

Q146       Julian Sturdy: Elements are coming forward and will continue to come forward before the sector deal ultimately gets signed off, you hope.

Dominic Goudie: Yes, I think so.  A lot of it is about improving the success of the existing support that is out there.  It is not creating a lot of new things from scratch, recognising that there are a lot of trade bodies, bits of Government, regions and LEPs that are doing wonderful things to support food and drink.  We are looking at the example of Scotland Food & Drink, and how it works in partnership with the Scottish Government.  We are trying to draw on those bits and co-ordinate things a bit better.  That is one of the biggest problems.  In food and drink, we have a huge amount of trade bodies all doing very good things.  We as FDF have the ability, as has been our focus for the last two years, to try to convene that power to harness all the technical expertise you have on individual sectors and focus that on the export situation, where we are doing a good job already. 

We have doubled exports in the last 10 years or so, but there is so much more that we could be doing if we could just target those businesses thinking about exporting.  Something like 17% of UK food and drink companies export.  That compares pretty unfavourably to other markets.  It is double that in a lot of our key EU partners at the moment.  We are not necessarily set up to match Ireland, which is such an export-focused industry, but there is significant room for us to improve on what we are doing.

Q147       Chair: Can we learn from the Irish, Danes and Dutch, because they are out in a number of markets, including China and the Far East?  I am not quite sure whether BEIS and the Government are joined-up enough.  You talked about what Scotland is doing.  Should England, Britain and UK plc be doing more?

Dominic Goudie: Yes we should, in a nutshell.

Q148       Chair: I will throw the question straight back at you.  We talk about chucking money at it.  Yes, that is probably a good idea, but if you are going to put money into it, where is it going to be most useful?  We want it to be a market-led thing, but we want more Government connection.  How do we get that?

Dominic Goudie: The sector council is a good first step in this, because it is finally bringing together a lot of key parts of the industry to start doing this.  Out of that is an export work stream led by Graham Hutcheon from Edrington Scotch whisky company. 

Chair: If Alan Brown were here. he would be very keen to hear all the comments on how well Scotland is doing.

Dominic Goudie: That is a good case in question.  The rest of the industry needs to look at its efforts, but they have clearly been doing a long piece of work, of 100 years or more, of building up that Scottish brand and those networks overseas.  As for the Government’s joined-up approach, there are challenges and room for improvement in how things work in overseas markets.  We said in our written submission that there are challenges on the ground in overseas trade fairs, where you will find a pocket of UK industry operating separately from the big GREAT pavilions that take place.  It means that we are not delivering the economies of scale that are possible.  Simple, practical efforts could build consortium models to deliver trade show support.  That is something that we have seen in a study that we did, where we looked at Ireland, France, Spain, Germany and a lot of other EU exporters; we saw that was a huge benefit in what they are doing.

As for a joined-up approach across Government, another example is around the Food is GREAT campaign.  There are challenges with how the branding is used overseas in particular.  One example I have heard in the last week is that you cannot have pictures of cows, sheep and pigs on Food is GREAT.  You can use them for tourism, but not for food, which I am not sure makes a great deal of sense.  At the same time, you have activities elsewhere in Government around advertising restrictions.  If extended to the level that is currently being talked about, it would mean some of the GREAT campaigning could not be used in the UK.  You would not be able to have the posters that are up in Heathrow about clotted cream, for example, for tourists arriving here to learn about British food and drink.  There is a piece of work across Government to get all that stuff in check, so we can properly promote UK food and drink.

Chair: That leads straight into David’s question, so off you go before I steal it all, David.

Q149       David Simpson: First, I declare an interest in the beef, lamb, pork and poultry industry, with a family business in Northern Ireland.  I would say 99.9% of my question has been dealt with from the export point of view.  You also mentioned the trade shows, Dominic.  There is limited funding for all of that.  As the Chair has said, we can throw money at it, but it has to be managed and targeted in a certain way to get that benefit.  Over the past weeks and months, we have seen Japan, China and Taiwan open their gates, after a long number of years, to British meat. 

Northern Ireland Food & Drink does a fantastic job, I have to say.  At the Balmoral show every year, they have a massive pavilion and it is marketed very well.  Someone said that Northern Ireland, Scotland, et cetera, are far ahead of the UK mainland as regards exporting.  How do you see trade shows being better used?  The Chair mentioned that different countries have different people on the ground.  It was mentioned at the last Committee meeting that European countries—Germany, Holland, et cetera—have a lot of people on the ground out in China and different places, where the British do not.  We have some, but not the same numbers that they have.  It is all about personal contact.  That is how the Irish Republic does it and how Northern Ireland does it. It is being in those countries, making those contacts and taking a number of years to build up the relationships that need to be in place.  How much more targeted do you believe trade shows can be?

Dominic Goudie: You have captured it really well there.  Getting out into the market is critical.  From a budget perspective, the Food and Drink Exporters Association, which came here previously and are partners of ours on food and drink exporting, are the experts.  I understand the trade show budget has been cut.  No one is calling for endless money to be thrown at it, but there needs to be a sufficient budget to enable that to happen.  We are currently putting significantly less into it than a lot of our competitors. 

If you go to trade shows, it is not necessarily about numbers.  I walked around the SIAL trade fair in Paris a couple of years ago, and there were aisles of olive oil producers that stretched as far as the eye could see.  Every one of them was sat there; no one was talking to them and nothing was actually happening.  That was the worst possible example.  It is not just throwing money at it.  For a lot of companies to break into it, they need to be able get out there and meet buyers.  There needs to be a middle ground of sufficient funding to enable them to go and do it. 

At the same time, it is not just about going to international trade fairs.  There is an element needed of meeting the buyer in the UK as well, because a lot of small companies cannot afford for a critical member of staff to disappear for days at a time.  Look at the examples in Wales where funding is being put in.  Over the last few years, they have built a really good event at the Celtic Manor, where they demonstrate the best of Welsh food and drink.  Scotland Food & Drink does the same in Scotland.  In Ireland, every two years Bord Bia does a wonderful exhibition, and Northern Irish food takes part in that as well.  I come back to England: what is there?  You have the Food and Drink Exporters Association, which does as much as it can to put that in place, but the UK as a whole needs a co-ordinated approach to building up a UK meet-the-buyer event with significant scale to bring in buyers from around the world, so that companies can have access without having to disappear off around the world.

Q150       David Simpson: What has happened in some cases is the larger companies in Northern Ireland, every two years—possibly less often, but mostly every two years—would have an open day.  They would cook all their products, whether red meat, poultry or whatever, and bring all their customers, even competitive customers who compete against each other, to an open day in that business, with food, drinks and whatever.  That in itself brings the customer right to the premises to see how they are producing, but also to taste that product and again for that personal relationship.  I agree with you about SIAL and places like that.  I have been there and it is the most boring three days that you could spend, unless you are going specifically to speak to a customer or whatever, but you are right.  We need to focus on that market in that way.  It would produce a lot more dividends.  We are doing it in Northern Ireland, but from England’s point of view, it would produce a lot more dividends.

Ruth Edge: To add to Dominic’s comments, we have a slight concern in the NFU.  We are supportive of Food is GREAT and opening up doors, but first, it is not targeted enough at the market, which you have just mentioned.  Does “Food is GREAT” even translate properly into the local languages in which we appear?  Are we picking up on those aspects we talked about right at the beginning of the session, in terms of what those nations care about, whether that is food safety or animal rights?  Where do we offer a point of difference versus what is available within their local market?

The other thing we have a little concern about is undermining “Food is GREAT” as a strapline and brand.  Jim and I attended an event a couple of years ago, where they showcased some case studies of businesses they worked with.  There were three businesses, and none of them was using agriculturally produced UK product.  They were all imported products that they were adding value to.  They were either teas, which they were repacking into teabags to export, or they were biscuits using imported product.  While we are supportive of the campaign, we would like to see that coming back to the farm as well, and focusing not just on niche areas but on commodity products.

Q151       David Simpson: I am sorry, Chairman, for coming back.  I will finish with this.  There has been not a problem, but within the European legislation and within our own food standards, product is coming in from Germany and Holland, and a lot of the major processors are buying the German products to supply British supermarkets, because they cannot get it in the UK market.  Once they take it into their factory, they process it and slice it or cut it, and it becomes British product.  Again, that is down to the labelling side of things, and that is an issue as well.

Ruth Edge: We would not go as far as to say it should be exclusively for agriculturally produced product.  We would not go that far, but we have a slight concern.  I saw at SIAL again a couple of dairy processors that were manufacturing whey products, all of which were imported to the UK, rather than agriculturally produced in the UK.  It is something we need to be aware of, particularly when the GREAT campaign was putting up case studies and not one of them came from agriculturally produced UK products.

Q152       Kerry McCarthy: We have heard from the Food and Drink Federation that the Government’s export priorities have been focused on big, high-value opportunities, so big infrastructure deals and so on—the high-volume exports.  Does that mean that embassies are less likely to look at food and drink opportunities?  That is one for Dominic.  Do they think it is too bitty?

Dominic Goudie: They have in the past.  Export support has been a victim of a number of changes in priorities around which sorts of businesses and industries are to be targeted.  In the last five or six years, we have seen moves from the trade support side to focus on just medium-sized businesses, or just small and medium-sized businesses, or any business that can be supported.  It is so much more complicated to export food and drink than other products, and the sort of support that is needed needs to go beyond the generic support that is typically available in a lot of embassies.  In some embassies there is great practice; there is real expertise there to help them, but others fall down to the more generic support, which is where the problem lies. 

We had the example of Japan a few years ago, where there was one food and drink specialist who really knew the industry and the challenges that it faced going into Japan.  That person was taken off to work on high-value opportunities—securing those £1 billion-plus deals to get big quick wins—because food and drink will never be a £1 billion deal in one shot.  What it will be is a number of smaller deals that add up to something, stand the test of time and last for a long period. 

Where we have had challenges, we have also seen a lot of improvement.  Defra led an exercise that pulled together a guide for all the embassies on sourcing food and drink, to try to get them thinking, in the activities they organise, how to bring a food and drink element to some of the events they host.  That was a helpful initiative. 

We then have the obvious example of China, where AHDB co-funded with Defra the Karen Morgan post there, which has made a significant difference, for myself by virtue of having a focal point for industry to contact, because people know her.  It was a decision that was announced in the budget and that was given a proper press release, so the industry found out there is a named person they can go to.

Q153       Kerry McCarthy: She is moving on, is she not? 

Dominic Goudie: She has moved on and Ray Smith is now in that role.  She has been over in the last few weeks to meet industry, but it is about having that face-to-face contact and someone who I know we can go to, and companies know there is somebody out there who speaks the language that they need.  In other markets, it is not so much the case that you have a person who is entirely dedicated to food and drink.  We are trying to cut through that at the moment.  We have proposed putting people in market, but it may be that we just need to give a bit of a platform to the people who are already out there and get them talking to industry to try to cut through the lack of clarity that exists.

Q154       Kerry McCarthy: We asked the panel at our last session whether they thought it would be good to replicate the Karen Morgan post in other countries.  We asked which would be the next place you would suggest that was done.  You are nodding already, so you probably do think it is a good idea to replicate it.  Where do you think is the next opportunity?

Dominic Goudie: In our proposals and the work we did to identify priorities, we looked at priority markets.  We did a piece of work with Grant Thornton, which is publicly available on our website, which sets out the challenges overseas.  Europe is number one for UK exporters; 60% to 70% of all our exports go there, so that will always be our focus.  In the context of the sector deal, we were encouraged to look outside Europe and identify the markets beyond Europe where companies see the greatest growth opportunity but face the biggest headaches getting into as food and drink businesses. 

The five that came to the fore were China, India, the USA, Japan and the wider Gulf region, for various reasons, whether the challenge of market access for meat, tariff issues or IP protection issues.  Those were the challenges we had and, in the negotiations we are going through now, we are looking at each of those five markets and trying to work out, if you were to have extra resource in those markets, what the focus should be on.  We are currently consulting industry to get a clearer view of what is needed on the ground in those countries.

Q155       Kerry McCarthy: This is the last question, and we are finally getting on to Brexit, unfortunately.  This links to some of the things you said about where the export opportunities are.  How are your members that export preparing for a no-deal Brexit?

Dominic Goudie: Shall I take this one again?  Thanks a lot.

Kerry McCarthy: Is it the case that, if we cannot export Scotch whisky, people will just drink it to drown their sorrows?

Chair: We virtually got through the whole meeting without talking about Brexit.  You have to expect it at some time.

Dominic Goudie: I thought I had got away with that.  I do not represent Scotch whisky, so I could not speak for them, for starters.  It depends on the set-up of the company, where they are getting their raw materials from and where they are selling to.  If it is an exporter that produces from largely UK-sourced raw materials, if they are exporting to the EU, they are waiting for clarity very urgently on what the tariff situation will be.  That is absolutely number one for that situation. 

Beyond that, a lot of our other exports go to countries with which we have free trade agreements, so they are waiting for clarity on what is happening there. 

Kerry McCarthy: They are countries with which we currently have a free trade agreement.

Dominic Goudie: Yes. They need to understand whether they can continue to source the raw materials via those free trade agreements or export finished products.  That is both a tariff situation and a TRQ situation.  We are hitting the point now where products are being exported and imported, which are now sat on boats.  They may arrive in the UK or in target markets at a point when we do not know what the tariff will be on arrival.  We do not know if there will still be a TRQ in existence and, if there is, who to apply to for it.  There is a huge amount of unknown in that.

Companies are doing their best to reassure buyers that they will keep getting products in, but there are real challenges.  I heard one yesterday: if a business exports to the EU or to a preferential trade market, and that product is returned by the consumer, what does that actually mean?  Would it come back to the UK and they would have to pay an additional tariff and go through more processes again?  There are a lot of questions, but businesses are doing what they can.  The primary focus was ensuring they had the staff to continue producing and going through the supply chain to find areas of sensitivity.  The hit on currency meant that a lot of companies looked at what they could change in their supply chain and where they could ensure they have that certainty around supply.  It might be switching sourcing to the UK, if they did not already do it, or identifying other sources so that, if there is a blockade at Dover, they can get other products in from around the world.

Ruth Edge: A lot of businesses have tried to buy themselves some time by doing the shipping already.  I am aware of one cheese processor, for example, which has already brought over a year’s worth of cheese for this year, which is being stored in the UK, so that is available.  It essentially buys them nine months to work out what they are going to do.  Some of the things that they are looking at, which are causing concerns at the moment, are logistical things.  Can I access the detergent and chemical I need to clean down my factory because, at the moment, we only have a week’s supply within the UK?  Will I be able to access that because, if I cannot clean down the factory, I am not going to be able to produce food?  Those are some of the scenarios they are going through at the moment. 

Q156       Kerry McCarthy: I was at a Food and Drink Federation event on Brexit.  It might have been two years ago now. We ended up having a discussion about onion powder.  Apparently, Britain used to be quite good at producing dried onion powder, but we do not do it now.  All these processed meals, soups and things have got it in.  There is so much discussion about whether lamb is going to come in or out of the country, quotas and that, but it could be quite small things.  I do not know why we cannot dry some onions here, but we are not set up to do it. 

Dominic Goudie: Absolutely, and the example we have is the situation we had around access to carbon dioxide earlier this year, and the implications that had for the food industry.  There was talk of beer pumps running dry in the middle of the World Cup and a lack of beer, and the ability to package meat in a controlled atmosphere.  There is a lot of detail behind the scenes, and packaging is a very good one.  A significant amount of packaging raw materials come from the EU.

Q157       Kerry McCarthy: It is not just food.  That is interesting; we had not really thought about that. 

Ruth Edge: Most of the spares and parts for machinery at all levels of the supply chain, so processing on farm and logistics, come from Europe as well.  All of that is being delivered at a just-in-time fashion as it currently stands, so we would only hold a very small amount of parts within the UK.

Dominic Goudie: As that machinery becomes more high-tech, having somebody to come and service and maintain it requires bringing someone over from the company HQ, whether that is in Germany, Japan or wherever.  Obviously the immigration situation plays into some of those concerns as well. 

Ruth Edge: Labour is probably number one for our members.

Q158       Kerry McCarthy: How long does it take a boat to get from New Zealand, let us say, to the UK?  I just wondered, because we are all focused on 29 March but, like you say, something could be setting off to arrive here.

Dominic Goudie: I would probably have to come back to you on that one.  My sense is that the boat does not necessarily come from New Zealand straight to the UK, but it stops off at various points en route and picks up other things.  That is where there are lead times involved in all of this.  When it arrives, does it actually come to the UK or does it go to Rotterdam?  Where in the EU can open up another can of worms. 

Q159       Chair: The AHDB actually funds somebody in China directly.  I am still very worried that we are nowhere near the same space as many other countries, at a high level.  Our embassies are being more proactive than they were, but I am still not convinced they are enough.  Without putting words into your mouth, would you make a plea to have these special advisers and special operators to promote our food and drink in a number of countries?

Dominic Goudie: Yes, that is very much the proposal we have.  The question comes on delivery.  You have the Karen Morgan model, the majority of which is co-funded by industry.  You have the example I gave earlier of the UK India Business Council putting someone in India, which again is an industry-funded piece.  This needs to be a partnership between Government and industry.  It is not just down to Government to throw money at this and to do it.  Industry needs to do as much as it can for that as well. 

One critical point is that the industry cannot do this on its own.  The food and drink industry is completely different in its set-up and nature from a lot of other manufacturing industries, such as automotive, which has four or five companies at the top and everything flows through them.  In our industry, there are international producers competing with micro-sized businesses in the same category, so it does not work to expect a handful of larger companies to finance everything.

Ruth Edge: To add to Dominic’s point—and you brought it up—in those countries where we see it being very effective, it is very co-ordinated within the country.  We need much more co-ordination across the industry, representative bodies and Government to represent ourselves as one industry.  Dominic mentioned that it is so fragmented that it is very difficult, but there are pots of money in all these different places, yet we do not have one message that we are all getting behind, going forward with that.  Budget is always going to be a constraint, so let us maximise our availability to its best potential.

Q160       Chair: It is also making sure it is a priority for our embassies, Government and others to make sure that food and drink is not just seen as an also-ran, because it is very important.  Many other countries have more emphasis on it than we do.  It is up to us to emphasise it, which is why you are all here this morning.  As far as Red Tractor is concerned, is it much of a marque when we export or is it best just to export under a Union flag?  Can it be linked to that?  What do you think?

Jim Moseley: We are working with AHDB on exactly that, whether Red Tractor can be more of a selling tool, either at a business-to-business level or, in some markets, whether it could even become a consumer brand.  The research that they have done suggests, first, that lots of key markets for AHDB rely on the underpinning factor of Red Tractor.  The safety and traceability elements and the assurance of those are the very things that are selling the product in those markets, and therefore Red Tractor underpins the sale at a business-to-business level.  Interestingly, there are a number of markets where, when consumers understand what an assurance scheme is, they see it as a consumer benefit.  It is not right on the radar now, but it may be possible for Red Tractor to be developed as a consumer brand in some markets.

Chair: Certainly, because parts of the flag are in the logo, I would have thought it would be quite recognisable.  That is an interesting one.  You are doing work on that.  I am a great believer in taking Red Tractor and making it even better. 

Thank you all very much for an interesting morning, and for taking part in our evidence session.  We have been noting some interesting things as we have been going through this morning, which I suspect will find their way into our report, so thank you all very much for giving evidence.