Written evidence submitted by the Food Standards Agency (FS0082)

The FSA is an independent, non-ministerial department, established in 2000 following several high profile outbreaks of foodborne illness such as BSE (mad cow disease). Our objectives, powers and duties are set out in legislation, primarily the Food Standards Act 1999.  We work across England, Wales and Northern Ireland and work closely with Food Standards Scotland.

We have two main objectives in law: to protect public health, and to protect the interests of consumers, in relation to food. Our work protects people’s health, reduces the economic burden of foodborne disease and supports the UK economy and trade by ensuring that our food has a strong reputation for safety and authenticity in the UK and abroad. We act independently and transparently, and are led by science and evidence.

One of the FSA’s statutory functions is to act as a generator of evidence and analysis on the areas within our remit (set out in section 8 of the Food Standards Act 1999). We have a large range of evidence and research which are relevant to this enquiry, which we outline below.

We publish our evidence in line with our commitment to transparency. This means it is freely available to others making policy and decisions, to inform guidance to businesses and so the public can trust our decisions. All our research is available on our website. In 2022 we, alongside Food Standards Scotland, published our first Annual Report on Food Standards[i] – an independent report that described the key changes in food standards that occurred between 2019 to 2021.

Given the FSA’s remit, outlined above, we have focused our response on questions 1 to 3. We would be happy to present our data and evidence to the EFRA Committee, to outline the particular insights the FSA has on the issue of food security and disruptions to food systems, and go into our evidence in greater detail.

Question 1: What are the key factors affecting the resilience of food supply chains and causing disruption and rising food prices – including input costs, labour shortages and global events? What are the consequences for UK businesses and consumers?

• What are key factors affecting the resilience of food supply chains and causing disruption and rising food prices:

The food system has been impacted by the shocks of Covid-19 and the invasion of Ukraine, changing both the supply and demand for food, whilst domestically the sector is dealing with the impact of higher food and energy prices, labour shortages, and the cost of living as consumers and businesses try to cut costs and energy usage.

Other contributors to the Committee will be better placed to offer authoritative commentary on how these factors have affected food supply chains and prices.  But we note that the impacts have been significant. 

The overall cost of food production has risen by on average around a fifth (excluding oils) between August 2021 and August 2022 across several categories of food staples. The cost of producing: [ii]

• Meat has increased by 19%
• Bread and cereal has increased by 21%
• Dairy has increased by 21%
• Animal feed has increased 22%

Evidence shows an increase in the price of wheat of 18% from August 2021 to August 2022[iii], and the cost of producing animal feed statistic is above.

Ukraine is by far the UK's largest supplier of seed oil, accounting for nearly half of our sunflower oil imports. Data shows that, between August 2021 and August 2022, the price of sunflower oil increased by 10%[iv]. As industry estimates suggest sunflower oil is used in 70% of manufactured food products in the UK[v], a huge variety of products have been impacted by this price increase. The FSA have undertaken work to address issues around food labelling, as many manufacturers looked to quickly change their ingredients away from sunflower oil due to the price increases.

Labour shortages are becoming an increasing issue across the food supply chain. Recent ONS surveys show that vacancies are difficult to fill across the food system and, despite migrant policy interventions, the labour shortages across the industry persisted into the first quarter of 2022.[vi] These labour shortages manifest in various places across the food system.

From the particular vantage point of the FSA, Covid-19, EU Exit, and other resourcing challenges have created a recruitment crisis in the UK veterinary sector, significantly impacting the availability of veterinarians in all sectors of the profession. This includes Official Vets, who are necessary to deliver official controls in abattoirs in England and Wales - shortages of vets risks disruptions to the food chain, food safety, and animal health and welfare. We are already undertaking work with wider government and the Royal College of Veterinary Surgeons to prevent service disruptions to the delivery of official controls. However, the overall availability of vets still represents a long term concern for public health.[vii]

Further, local authorities (LAs) are also facing challenges with the recruitment and retention of competent officers. We have commissioned discovery work to identify barriers that appear to hinder the flow of new food and feed officers into the official control systems in England, Wales, and Northern Ireland. This will help us better understand the stages of the system that produces qualified and experienced officers and to learn more about the challenges LAs face in retaining staff. These roles are crucial to ensure we maintain food safety across our three nations. Being able to recruit and retain suitably qualified and competent officers and to guarantee a pipeline of officers for the future, is critical to ensure that high quality inspections and appropriate follow up and enforcement action is taken to ensure that standards do not drop and that consumer interests and public health are protected.[viii]

• What are the consequences for UK businesses and consumers?

Businesses:

FSA research shows that in 2021, 55% of small and micro food businesses report that the availability of food supplies or disruption in the supply chain was a particular barrier to their success – the highest of all concerns reported. Issues around staff recruitment and skills were also commonly raised, with the most common difficulty being recruiting waiting and customer facing staff, followed by workers with specialist skills such as chefs and butchers. 34% of small and micro food businesses reported such issues around staff recruitment and skills, an increase of 6% since 2019. This seems to be a particularly acute issue for those in the manufacturing sector and Wales, where concern rose to 48% and 46% respectively. Recruiting waiting and customer facing staff was raised by nearly half of respondents 42%.[ix]

Consumers:

The potential consequences for UK consumers are significant. Our evidence shows that financial pressures and rising food prices negatively impact consumers in relation to food in a variety of different ways, and that these are widespread across the population, but with particularly concerning impacts for those on lower incomes. From research conducted this September, 30% said they had skipped or cut down the size of meals because they did not have enough money to buy food (up from 21% in September 2021), and 17% of participants reported using a food bank or food charity, up from 10% in September 2021.[x]

Financial pressures also have an impact on food safety, and therefore the risk of foodborne disease. In September 2022, 32% of participants reported they had eaten food past the use-by date because they could not afford to buy more food.[xi]

Even as and when the rate of inflation for food falls back down, unless it falls below growth in incomes, higher prices, and therefore the ultimate impact that has on consumer’s food security and welfare, will persist rather than return to the previous status quo.

However, regardless of the challenges in the food system over the past two years, the latest FSA/FSS annual review of Food Standards concluded with a degree of caution that food standards were maintained across the UK, which given the impact of the pandemic on both business and FSA operations is a huge success story. The report highlighted two main areas of concern – a fall in the number of inspections of food businesses, as a consequence of the resourcing pressures faced by local authorities, and the delay in establishing full UK imports controls for high-risk food and feed from the EU, which has reduced the ability to prevent the entry of unsafe food into the UK market.[xii]

Question 2: What is the outlook for UK food price inflation in the short and medium term?

The consumer price of food rose by around 13% in a year, between August 2021 and August 2022[xiii]. This is the second highest price rise in a single year since 2008 – the highest being between August 2007 and August 2008. Further, as we track food commodity prices monthly, our evidence shows that the consumer price of food rose by 1.6% from July 2022 to August 2022. This is significant, as on average food prices tend to rise by up to 2% a year, from one July to the next.

Despite these substantial rises in the consumer price of food, over the past few months we have seen lower increases in the cost of producing food. There have also been lower increases in the costs of meat and dairy production, and if they continue these reduced increases are likely to pass-through to the cost of the final item and take the momentum out of consumer price rises (however, this would arrest the rise in, rather than necessarily reversing, food prices). To note, changes in the cost of producing food typically takes 2-6 months to be fully observed in the consumer price of food.

The global price of wheat and sunflower oil has fallen by around 0.09% and 4% respectively from July to August 2022[xiv].

Question 3: How are the rising cost of living and increasing food prices affecting access to healthy and nutritious food?

Price is a strong driver of what people buy and eat. 50% of consumers we surveyed in January 2022 indicated that their priority when buying food was low prices and indeed this has been a consistent theme across years.[xv]

Price and limited budgets often “squeeze out” health and nutrition priorities. Over half of UK consumers (53%) felt ‘priced out’ of buying healthy food: 31% agreed that they find it difficult to find fresh foods that meet their budget and 25% felt that heavily processed foods are often the only option available. Eating healthily was perceived as a matter of privilege, with many reporting trade-offs between healthy interests, price and convenience.[xvi]

Household food insecurity causes a range of complex, harmful effects to people’s wider wellbeing beyond the initial financial pressures. People with lower food security are significantly less likely to say they ate healthy meals every day or most days, with a range of 46% - 53% for those with very low to marginal food security, compared to 69% for those with high.[xvii] As well as the reduced calorie intake, nutritional quality, malnutrition and the resultant effects such as fatigue or poor health, all suffer, and people can end up putting on weight despite eating less. It also negatively impacts people’s mental health, causing stress, anxiety, and depression.[xviii] Our latest consumer insights data indicates that a quarter of consumers (25%) reported eating cold food at least once in the past month because they could not afford to cook hot food, whilst a third (33%) reported that they could not afford to eat a healthy balanced diet.[xix]

September 2022