Agricultural Products, Food and Drink (Amendment etc.) (EU Exit) Regulations 2020

Baroness Bloomfield of Hinton Waldrist Excerpts

Monday 30th November 2020 Grand Committee

Moved by

[Baroness Bloomfield of Hinton Waldrist]

That the Grand Committee do consider the Agricultural Products, Food and Drink (Amendment etc.) (EU Exit) Regulations 2020.

Relevant document: 33rd Report from the Secondary Legislation Scrutiny Committee

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I hope it will be useful to your Lordships if I speak to both the Agricultural Products, Food and Drink (Amendment etc.) (EU Exit) Regulations 2020 and the Food (Amendment) (EU Exit) Regulations 2020 as both relate to food and drink policy.

The first set of regulations contains necessary amendments to EU agri-food, spirit drinks, wine and aromatised wine regulations so that they can function in domestic law. These primarily concern geographical indication—or GI—schemes, a form of intellectual property for food and drink products, but also extend to wine and spirit drinks sector standards.

I first want to address the impact of the Northern Ireland protocol. For the duration of the protocol, the EU GI framework will apply in Northern Ireland. As such, most of this instrument has the territorial extent of Great Britain. However, as these schemes will be administered and regulated by the UK Government, they will be referred to as “UK GI schemes”. Geographical indications are a form of intellectual property protection for the names of food, drink and agricultural products with qualities attributable to the place they are produced or the traditional methods by which they are made. Examples are Scotch whisky, Welsh lamb and Melton Mowbray pork pies. Most of the amendments made by this instrument are to the retained EU regulations that govern GI schemes. They collectively convert the four EU GI schemes into a legal framework for GI schemes in Great Britain.

The framework will allow applications for GI protection to be made to the Secretary of State by UK and international applicants. It will allow them to be scrutinised and consulted on, and for the Secretary of State to take decisions on awarding new GIs. In doing so we will condense what was a two-stage, member state to Commission application process into a single, streamlined domestic process. This means that decisions on protections for our food and drink products are made here in the UK and not in Brussels. Once awarded GI status, a product name is then added to the relevant public GI register established by this instrument. This means that GI protection formally takes effect in Great Britain, protecting the GI against misuse of its name. From 1 January, all existing UK GIs and EU GIs will be on our registers. These will be joined by international GI products protected through our trade agreements. The rules collectively ensure that the UK meets its WTO obligations under the TRIPS Agreement—the agreement on Trade-Related Aspects of Intellectual Property Rights.

Turning to GI logos, this instrument removes the requirement for EU GI logos to be used by British producers and establishes the new domestic logos. To avoid burdening producers, we are introducing a three-year period before logo use becomes mandatory on relevant British products. Other amendments to ensure the smooth operation of our GI schemes include new procedures enabling appeals to be made to a First-tier Tribunal; allowing Northern Ireland applications directly to the UK schemes without first requiring protection under the EU schemes; ensuring that UK applications to the EU that are undetermined at the end of the transition period transfer to the UK schemes; preserving the existing relationship between GIs and trade marks in determining if a trade mark can be granted; and ensuring the intellectual property protection of wine “traditional terms” such as “reserva”’ and “grand cru”.

The instrument also includes a much smaller number of non-GI amendments to the EU wine and spirit drinks sector rules. These include the definition, composition and labelling of spirit drinks; and the use of wine labelling terms, experimental winemaking practices, accompanying documents and the registers that must be maintained by wine operators. Finally, the instrument amends the domestic legislation which enables enforcement of the regulations. It makes separate amendments for Great Britain and to Northern Ireland to take account of the different regulations that will apply in each territory from 2021.

The devolved Administrations have given their consent to this instrument. Although the GI provisions are reserved, as intellectual property, Defra has built up a strong working relationship with the devolved Administrations on the GI schemes. Their interest in, and the value they can add to, the new schemes’ operations is recognised. Beyond the legislation, a working level arrangement has been agreed which sets out how the four nations will work together on the new GI schemes. In particular, the devolved Administrations will have a role in appraising new scheme applications and addressing scheme operations, and promotion and international trade. These rules collectively ensure that we have not only a fully functional GI framework, but one that enables and encourages our international reputation for quality food and drink to grow.

The Food (Amendment) (EU Exit) Regulations 2020 concern natural mineral waters and food information to consumers. Their main purpose is to place food information to consumers and natural mineral waters rules on a legal footing that accounts for the Northern Ireland protocol. They also make some minor technical amendments to retained direct EU legislation and domestic regulations to ensure the operability of this legislation at the end of the transition period. They do not bring a substantive change in policy.

Turning to natural mineral waters, the current legislation does not differentiate between EU retained law as applicable in England and EU regulations as applicable in Northern Ireland. These amendments are being made to reflect the position of Northern Ireland under the protocol. Also, previous EU exit legislation was laid to ensure the protection of the internal UK market by providing mutual recognition clauses with Northern Ireland, Wales and Scotland. This SI will amend those mutual recognition clauses to narrow their effect.

On food information to consumers, retained EU regulations assure a high level of consumer protection in relation to food information, so that consumers are not misled about their food, can make informed food choices and can use food safely. Previous EU exit legislation made amendments to make the retained food information legislation operable in the context of the UK no longer being an EU member state. This SI amends that legislation to ensure that it applies in a way that meets the conditions of the NI protocol.

Both instruments have received devolved administration consent and, as I have outlined, the regulations will ensure that the relevant rules operate effectively in domestic law. I beg to move.

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[Baroness Hayman of Ullock (Lab)]

My Lords, I thank the Minister for introducing the SIs this afternoon and for organising the helpful briefing beforehand. I also thank noble Lords for their contributions. I was particularly interested to hear about the vineyard of the noble Lord, Lord Naseby. The Minister has clearly explained the amendments to EU legislation—the previously made exit SIs—needed to address the Northern Ireland protocol and fix any deficiencies in retained EU law.

The issues regarding Northern Ireland and the implications for trade with the Republic of Ireland are clearly complex. I would welcome an update on cross-border arrangements from the Minister. The regulations are complex but important, so we need to get them right. The noble Baroness, Lady Parminter, spoke of the economic importance to our country of protected goods. We on these Benches support what the Government are doing by bringing in these regulations, but as noble Lords may expect, we have a few questions.

I turn to cost, which was mentioned by the noble Baroness, Lady McIntosh of Pickering. I understand that the regulations are not expected to have any significant financial implications, but there are likely to be some for industry and producers, particularly the specialist food producers and those with protected designations. What is the Government’s assessment of these extra costs and what costs are likely when applying for new geographical indicator status or when appealing to the First-tier Tribunal?

On the Food (Amendment) (EU Exit) Regulations 2020, it would be very helpful to understand more about the change outlined in paragraphs 2.8 and 2.9 of the Explanatory Memorandum in relation to mutual recognition clauses on permitting the sale of natural mineral waters. England is going to make its own decisions about whether EU EEA waters for sale in Scotland, Wales and Northern Ireland can also be sold here. Is that likely to be an essentially automatic process, or will specific criteria be applied? While it is important for consumers to have confidence in the products that they buy, we have a concern that we could end up unnecessarily double-checking or even triple-checking products that have already been certified in other jurisdictions.

On the Agricultural Products, Food and Drink (Amendment etc.) (EU Exit) Regulations 2020, Labour has had questions over the status and future of GIs all the way back to the referendum. While having greater certainty is to be welcomed, it would have been helpful to have got to this stage much earlier in the Brexit process. Enabling new British protection of GIs is a welcome step, and the noble Lord, Lord Bourne, mentioned the importance of protections for new and existing GIs. But, as with lots of aspects of our future trade relationship with the EU, that only gets us so far, and we hope that a deal, if one is achieved, will include ongoing mutual recognition of GIs, as other noble Lords have mentioned. Is that the department’s aim? If it cannot be achieved, what is the likely impact on British producers that export products to the EU?

The SI also removes the requirement for EU GI logos to be on relevant product labels. If the UK and EU agree ongoing reciprocal arrangements, will this need to be revisited in future? In the Explanatory Memorandum, the wording in paragraph 2.14 speaks of removing the obligation to display an EU logo. This suggests that producers can choose to maintain it if they wish. Can the Minister confirm whether that is the case? Also, many different logos are used on food these days. I am aware that the Government have had extensive consultation with industry and consumers regarding the use of the new logo, which I applaud, but logos can become very confusing for consumers. So what resource is being put into educating the public on what the new logo means?

Paragraph 7.6 of the Explanatory Memorandum outlines the new appeals process, which allows an applicant for GI status to take their case to a First-tier Tribunal. Again, this has been subject to consultation, which we welcome, but we would be interested to know what information came out of that consultation. For example, did it give the department sufficient information to be able to estimate how many applications are likely to be made every year or how many appeals are likely to need to be heard? These may seem minor questions, but they have consequences for government in terms of the cost of legal representation.

I have one final point more generally about SIs. It is good to see some consolidation of previous SIs into the Agricultural Products, Food and Drink (Amendment etc.) (EU Exit) Regulations 2020 in front of us today. However, we have heard so many SIs covering similar areas, some of them revisiting or building on previous amendments, so we have inevitably ended up with some inconsistencies. So I end by putting out a plea for greater consistency in future. I await the Minister’s response with interest.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank all noble Lords who have contributed to the debate. There were a large number of questions, and in the 10 minutes allotted I shall try to get through as many as I can. If I leave anybody out, we will have a good look at Hansard and I shall write with any other answers.

To prepare for the UK no longer operating under EU law, it is essential that we have the right legislation in place to administer the domestic GI scheme and to ensure that natural mineral waters and food labelling are appropriately regulated. I recognise the time pressures and constraints that we have been operating under. We are coming to these at a rather later stage in the process than would have been ideal, but I am confident that these SIs have been drafted to make the new system work.

A number of noble Lords asked whether there would be ongoing mutual recognition between UK and EU GIs. My noble friends Lord Naseby and Lord Bourne, and others, asked that. For existing GIs, as registered under the EU schemes by 31 December, there will be continued recognition on both sides. That is, existing UK GIs will remain on the EU’s registers and existing EU GIs will be added to the UK’s GI registers. The situation regarding future GIs after the end of the transition period will be clear once trade negotiations with the EU have been completed. I am sure that that will come as no surprise to noble Lords. Producers in Northern Ireland will, of course, be able to apply directly to the EU schemes, as before.

The noble Lord, Lord Bourne, asked about World Trade Organization rules. This SI will provide the legal framework in England, Scotland and Wales to administer and enforce the GI schemes, also ensuring that the UK meets WTO trade-related aspects of intellectual property rights, or TRIPS, agreement obligations. In Northern Ireland, the UK will meet TRIPS obligations through the EU GI schemes.

My noble friend Lord Naseby asked about territorial extent. The EU GI rules do not apply in UK overseas territories, so these are treated by the rules as third countries. If they would like their products to be protected in the UK, they would need to apply to the UK scheme, like other producer groups. My noble friend also asked about the Northern Ireland protocol, as did the noble Baroness, Lady Parminter. Yes, retained EU law amended by this instrument is listed in Annexe 2 of the protocol, which means that Northern Ireland will continue to follow the unamended EU GI rules for the duration of the protocol. The territorial extent of retained EU law amended by the instrument and the GI schemes is, therefore, Great Britain and not the UK.

My noble friend Lord Naseby also asked whether anything had been done to minimise the extent to which Northern Ireland is treated differently. Yes, indeed, steps were taken to ensure this, given the UK Government’s Command Paper, The UK’s Approach to the Northern Ireland Protocol. This instrument allows Northern Ireland GI applicants to apply directly to the UK schemes without first needing protection under the EU schemes, which provide protection in Northern Ireland. We have also ensured that the new GI logos refer to UK protection, in the expectation that the protocol is a temporary arrangement.

I was asked by a number of noble Lords whether Defra had the right level of expertise and staffing. Yes, indeed, Defra will build on its existing experience of handling GI applications to provide a robust and transparent service to applicants. A team is already in place and dedicated to dealing with new applications from both the UK and overseas, with significant levels of preparatory work having taken place.

On the consultation and stakeholder engagement, Defra ran a public consultation in autumn 2018, which sought views on elements of new UK GI schemes, and on wider wine and spirit standards carried forward via this instrument. Beyond this we have undertaken targeted stakeholder engagement in 2019 and 2020 on the new GI scheme logos and handling appeals. This involved devolved Administrations, GI producers and trade bodies. Specific engagement on the replacement of the 2019 EU spirit drinks regulation, which this SI amends, has also taken place, primarily with the Scotch Whisky Association and the Wines and Spirit Trade Association. This SI was shared with selected stakeholders through the virtual reading room.

I was asked by the noble Baroness, Lady Hayman, and the noble Lord, Lord Naseby, about how the public will be educated about the new logos and what the schemes mean. The Government are developing a promotional strategy which will include raising awareness of the UK GI schemes and products among consumers, retailers and hospitality. We have recently published research that will help us to understand how to better promote GIs to consumers and to support promotional campaigns.

I note the interest of the noble Baroness, Lady Bennett, in bottle deposit schemes, which is now on the record, but it does extend rather beyond this SI. She also asked about the environmental impacts of natural mineral water and the bottled water industry. The industry is making great strides to meet its obligations and the Government are working hard to ensure that the UK meets its environmental obligations.

I was asked by nearly all noble Lords about the cost of the new GI schemes, both for the Government and for business. We expect the cost to government of domestic applications to be in line with those to date, because this is not a new function. However, there will be modest extra costs for considering applications from third countries. But at this stage, of course, demand is very difficult to gauge. On communications, we will use existing channels as far as possible, working closely with the Department for International Trade and the Food is GREAT campaign to promote UK GIs internationally. We will also work collaboratively with producers, trade bodies and the retail sector where possible.

On the costs to business, there will be no fee for applying to the UK GI schemes or to submit an appeal under the First-tier Tribunal. GI producers will continue to bear any costs associated with the verification of their products, as they do under the current EU GI schemes. There will be no additional fees for verification. The cost to GI producers to adopt the new UK GI logos will be negligible. This is based on an analysis that a three-year adoption period will reduce the cost burden to businesses by around 95% compared with an immediate-change requirement.

I was asked by my noble friend Lady McIntosh and the noble Baroness, Lady Hayman, about the costs for adopting the new logos. I have answered that question.

My noble friend Lady McIntosh asked whether Defra had completed the necessary steps to introduce the new scheme. The short answer is, yes: the key components are this legislation, the GI registers, new logos and scheme guidance. All have been completed or are comfortably on schedule to be ready by 1 January 2021. Significant attention has also been given to mapping and testing the new processes, for example for new applications, by the staff who will be administering the schemes. This is in the final stages of being completed, to be ready for 1 January.

No debate on an SI would be complete without my noble friend Lady McIntosh asking about an impact assessment. I hate to disappoint her on this occasion, but an impact assessment was not needed. The purpose of the instrument is to maintain existing regulatory standards and therefore there is expected to be minimal impact on business. Changes that did have an impact, such as the adoption of new logos, do not meet the minimum threshold for an impact assessment.

My noble friend also asked about how a First-tier Tribunal was decided on as the body to hear GI appeals and how many appeals we could expect. The First-tier Tribunal was proposed in public consultation as being suitable to hear GI appeals. The majority of respondents supported the proposal. We expect very few appeals to arise. As well as the rate of GI applications generally being modest, the registration process already allows objections to the registration of a new GI to be raised before the Secretary of State makes a decision. This is intended to resolve disagreements within the normal application process, so First-tier Tribunals would be the exception. There will be no charge for making an appeal and the Government—through Defra—will pay the cost of hearing each case, which is estimated to be about £3,000.

My noble friend Lady McIntosh also asked about the timescales for GI logo labelling. As I have said, this was agreed through public consultation. Lastly, the EU logo can continue to be used on GB products, but it will no longer be a requirement to do so. This provides producer choice, recognising that the GI was awarded under the EU processes, and the EU logo may carry more weight in the EU marketplace. The rules on using both the EU and UK logos have been communicated to GI producers, retailers and enforcement bodies. There is also written guidance to support this. For Northern Ireland agri-food GIs that are protected under the EU regime, it will be mandatory to use the EU logo.

I hope that noble Lords fully understand the need for these regulations. As I have outlined, they ensure that existing regimes for geographical indications, natural mineral waters and food labelling will continue to operate effectively from the end of the transition period. If there are any further questions that I have not answered, I will do so in writing. I commend these instruments to the Committee.

Motion agreed.