> How Brexit Might Affect the Food Standards Regulations Industry - The Food Safety Company How Brexit Might Affect the Food Standards Regulations Industry - The Food Safety Company
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    Monday, 14 November 2016

    How Brexit Might Affect the Food Standards Regulations Industry

    Companies like Klipspringer deal in food and beverage standards compliance, helping other companies which work with food and beverages to maintain the necessary standard. Their job is to ensure that the latter such companies can confidently say they are operating within the parameters of the law. Klipspringer goes about this in various ways: from supplying equipment which is regulation-compliant to offering services (such as pH or temperature calibration) which ensure existing practices within their client companies both function well and are compliant with the laws of the countries in which they operate. 

    Legislation, therefore, is foundational to the business model of such companies: an issue which has become particularly relevant in the months following Britain’s EU referendum. The resulting vote in favour of ‘Brexit’ (i.e. in favour of Britain leaving the European Union) entails the possibility of new food standards being introduced in the United Kingdom. It is not yet known whether the UK will change its food standards laws – but it might. If it does, it could be the case that British companies which deal with food and beverages will need to adopt new processes, equipment and training in order to comply with new UK laws (given that food and beverages are currently regulated by EU rules, which the UK could now choose to change post-Brexit). This is where companies like Klipspringer come in, as they too will therefore need to change or replace the goods and services they offer such companies (their clients) in order to give them the confidence that they are indeed compliant.

    What exactly might change?

    The processes, equipment and training which may need modification, or indeed replacement, entirely depend upon how regulations change, if at all. There are a huge number of existing regulations which could potentially be changed by a post-Brexit UK government. For example, there are six main EU regulations on food safety and hygiene which, if altered, could affect the industry:
    • EC 178/2002 General Food Law;
    • EC 852/2004 Hygiene of Foodstuffs;
    • EC 853/2004 Hygiene for Food and Animal Origin;
    • EC 854/2004 Official Controls on Products of Animal Origin;
    • EC 882/2004 Official Controls on Feed and Food (currently under review);
    • EC 2073/2005 Microbiological Criteria for Foodstuffs.
    These regulations cover all manner of aspects relating to food, including additives, labelling and supplements, as well as the ways in which the food is produced, sourced and stored.

    In terms of business prospects, there are so many variables at play that it is almost impossible to predict what could happen if the UK were to change its regulations with regards food and beverages in the wake of Brexit. Some potential benefits of such a move could be the considerable expansion of the market in which companies like Klipspringer operate. Not only would they be able to continue supplying the same goods and services to their existing clients within the European Union, but they could also be compelled to introduce an entirely new range of goods and services for existing clients operating in the UK, following whatever changes may come to UK food standards regulations. Whether or not this would prove to be a good thing (it could, for example, actually make such entities less competitive) is debatable. However, what is a probable benefit is that, if there were indeed a change in UK regulations, more businesses which work with food and beverages in the UK, unsure whether they are indeed still complying with new UK laws, might develop a need to approach Klipspringer and its competitors for support. The demand upon companies which deal in food and beverage standards compliance could thereby see demand for their goods and services rise in a twofold manner, were the UK to change regulations at all.

    However, again, it is impossible to say whether such benefits would come, or indeed whether things would swing the other way: for example, if the UK leaves the EU Internal Market (also known as the ‘Single Market’), it could be that tariffs, and therefore prices, rise for UK exporters, entailing a negative impact for both food and beverage standards compliance companies and their clients (who may themselves be exporting food and beverages). That, however, is itself dependent upon whether or not the UK is able to negotiate a favourable trade deal with other nations like Canada or Australia – although, in order for new business opportunities in these markets to counterbalance the loss of European clients (if indeed such an eventuality were to unfold), it is likely the revenues they offered would have to be larger, at least initially, in order to compensate for the adjustments which would likely be necessary for UK exporters to make to their businesses in order for them to fall into line with those countries’ own food and beverage regulations. Furthermore, client companies may need to adjust the ways in which they deal with entities like Klipspringer – either expanding or shrinking the volume of goods and services they purchase, depending upon exactly how UK regulations were to change. However, once again, this is dependent upon whether or not regulations in the UK actually do change: we do not yet know whether or not they will. For example, if the UK were to leave the EU (a process which will not begin until the Prime Minister triggers Article 50) but join the European Economic Area (EEA), EU regulations surrounding food would still apply to the UK thanks to ‘EEA relevance’ laws.

    In summary, the main effect of Brexit upon industries reliant upon food standards is a broadening of future potentialities. The best thing businesses can do is plan for as many as possible, in order to be ready for whatever the outcome may be.  Adjustments will then be possible if the future becomes more predictable with time – for example, if the UK government confirms or denies that it will be changing regulations (and, in the former case, if it reveals exactly how this will occur), then certain contingencies can either be scrapped or acted upon. 

    James Stannard

    James has a Bachelor’s degree in History and wrote his dissertation on beef and protest. His heroes list ranges from Adele to Noam Chomsky: inspirations he’ll be invoking next year when he begins a Master’s degree in London.
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