Consultation outcome

Summary of responses and government response

Updated 25 January 2019

1. Introduction

This document contains the UK government’s summary of the responses received to the consultation on “Protected Food Name Scheme: improving enforcement”.

This consultation was held between 5 October and 2 November 2018, with responses invited by email and through the Citizen Space website.

The consultation sought views on proposals to introduce new powers and penalties for the Protected Food Name Scheme, bringing proportionate and effective enforcement in the form of civil sanctions. The proposals also included improved reporting of inspection results by control bodies and clarified the right of appeal against decisions regarding the registration of new protected food names.

This document provides both the summary of responses and the subsequent government response.

2. Summary of responses

A total of 34 responses were made to the consultation.

Of those, 26 response were from organisations and individuals who use the Protected Food Name Scheme (producers and producer groups) and 8 were from organisations and individuals involved with the delivery of the scheme (enforcement bodies and verification providers).

The consultation document asked respondents for views on the introduction of a bespoke civil sanctions enforcement regime and whether they thought the powers and sanctions provided would be proportionate to the impact of the misuse of a protected food name. For each element of the consultation, the majority of respondents welcomed our proposal. Both users of the scheme and those who are responsible for its delivery provided more detailed comments.

The consultation also asked respondents for their views on the reporting requirements of the scheme related to verification findings. The majority of respondent agreed with the proposed changes. A number of detailed comments were made by both users and those responsible for the delivery of the scheme. Finally the consultation sought views on the right of appeal afforded to those affected by a decision to forward a protected food name application to the European Commission. The majority of respondents agreed with the proposal to formalise this right.

2.1 Responsibilities of control bodies undertaking producer verification

We asked three questions regarding amendments to the reporting of producer verification results:

1. Is the reporting of verification inspection results appropriate for the Protected Food Name scheme?

33 respondees answered this question. 82% supported the proposal. 14 of the respondents provided detailed comments with the following key themes:

• businesses should be given an opportunity to resolve any non-compliances prior to the reporting of any inspection findings
• ensuring one organisation has oversight of the scheme will ensure trends or issues are noted, which may not be obvious to individual organisations carrying out this activity
• this proposal will ensure that the UK system is recognised as being managed and controlled effectively
• the process needs to be robust and transparent to ensure consumer trust - consideration should also be given to the creation of a central database of PFN producers, inspection bodies able to carry out verification, and audits carried out and their result
• the reporting of results could be quarterly for conforming producers and more frequent in the case of non-conformities - consideration should also be given to how this data is used as adverse publicity may put local economies at risk
• the reporting of verification findings is appropriate but could instead be to accredited trade associations

2. When a producer is not meeting the regulations, is it appropriate for this inspection result to be immediately notified to Defra?

33 respondees answered this question. 62% supported the proposal. 18 of the respondents provided detailed comments with the following key themes:

• a number of respondents questioned the need to report minor non-compliances, either immediately to Defra or at all
• a number of respondents agreed with the requirement to report non-compliances but suggested an opportunity should be given to the producer to resolve the issue prior to reporting to Defra
• a number of respondents commented on the burden that immediate notification of non-compliances might create
• it was commented that other relevant bodies (e.g. the Food Standards Agency or Local Authorities) may have a requirement for this information and consideration should be given to Defra sharing it
• consideration should be given to what constitutes a major or minor non-compliance

3. When a producer is meeting the regulations, is 28 days an appropriate timeframe for notifying Defra of these inspection results?

32 respondees answered this question. 74% supported the proposal.

13 of the respondents provided detailed comments with the following key themes. A number of respondents:

• commented on the need for reporting of verification findings for compliant producers
• thought the timescale appropriate or had scope to be reduced
• agreed with the need to report verification findings of complaint producers to Defra but thought the 28 day timescale to be too short or onerous

2.2 Responsibilities of enforcement bodies

We asked two questions regarding the notification which should be provided to Defra regarding enforcement activity:

4. Is this reporting requirement appropriate for the Protected Food Name scheme?

31 respondees answered this question. 77% supported the proposal.

8 of the respondents provided detailed comments with the following key themes:

• there were a number of comments suggesting that the reporting could be on a less frequent basis such as quarterly or annually, in line with other reporting requirements
• there were requests for helpful advice and guidance for producers on labelling and marketing which would assist in the enforcement of the scheme
• it was recommended that a standard reporting template was created by Defra to ensure that all of the relevant information was reported
• it was questioned whether trading standards were best placed to enforce this scheme and whether they had the requisite knowledge and manpower

5. Is 28 days an appropriate timeframe in which to communicate enforcement actions to Defra?

31 respondees answered this question. 76% supported the proposal. 6 of the respondents provided detailed comments with the following key themes:

• there were a number of comments which supported the reporting of enforcement activity
• there were a number of comments suggesting that the reporting could be on a less frequent basis such as quarterly or annually, in line with other reporting requirements
• there were requests for helpful advice and guidance for producers on labelling and marketing which would assist in the enforcement of the scheme
• there was suggestion that the proposed 28 days could be reduced

2.3 Powers of entry and powers of authorised officers on entry

We asked one question on whether the inclusions of powers of entry were necessary for the effective enforcement of the scheme.

6. Is the power of entry necessary for effective enforcement of the Protected Food Names Scheme?

31 respondees answered this question. 79% supported the proposal.

12 of the respondents provided detailed comments with the following key themes:

• there were a number of comments which agreed that the proposed powers of entry were necessary
• there were several comments by those involved with the delivery of the scheme which thought that the powers were provided by other available legislation
• it was questioned whether the powers were in line with a recent government approach to consolidate the powers available to local government
• it was questioned how these powers might work where records are stored using cloud computing systems
• it was asked if officers would have access to powers which are available under other legislation. Enforcement Powers

We asked five questions on the proposed bespoke civil sanctions enforcement regime for the scheme.

7. Are these appropriate reasons for the issue of a compliance notice?

31 respondees answered this question. 85% supported the proposal.

6 of the respondents provided detailed comments with the following key themes:

• there were a number of requests for clarification of the reasons for issuing a compliance notice
• ensuring PFN labelling remains compliant when applied to divisible foodstuffs
• it was noted that this regime was a helpful tool to ensure speedy resolution of compliance issues where there is no fraudulent intent

8. Is the use of a non-compliance penalty an appropriate enforcement mechanism for the Protected Food Name scheme?

33 respondees answered this question. 85% supported the proposal.

9 of the respondents provided detailed comments with the following key themes:

• there were a number of comments which supported the introduction of a penalty as a mechanism for enforcement of the scheme
• there were a number of comments which highlighted the need to ensure this regime could be used with other legislations such as the Fraud Act which would enable other enforcement options such as criminal convictions and proceeds of crime recovery
• a comment was also made on the impact on local government resource, especially in light of changes which may be made once EU legislation ceases to apply in the UK

9. Is £40,000 an appropriate level of penalty for the scheme?

33 respondees answered this question. 59% supported the proposal. 17 of the respondents provided detailed comments with the following key themes:

• there were a number of comments which supported penalties of up to £40,000
• there were a number of comments which also suggested that a penalty of up to £40,000 may not be sufficient in some cases
• it was suggested that the size of penalty could be linked to company turnover to ensure that the penalty is propionate and an effective deterrent to business of differing scales
• it was suggested that Defra could publish the names of business who have received a penalty
• concern was expressed that large penalties could result in the potential for local authorities having to defend costly appeals and the possibility of the scheme being discredited in the event of a local authority not being able to robustly defend the appeal

10. Is the option of offering a discount in relation to early payment of a non-compliance penalty appropriate for the scheme?

31 respondees answered this question. 74% supported the proposal.

9 of the respondents provided detailed comments with the following key themes:

• comments were made that offering a discount for early payment may be viewed as weakening the deterrent
• comments were made that introducing this discount would assist with the administration, consistent with other penalty notices
• one observation made was that in cases where a penalty has been incorrectly applied a business could feel pressurised into paying the penalty early as opposed to challenging it

11. Is the option of a cost recovery notice appropriate for the scheme?

32 respondees answered this question. 88% supported the proposal. 5 of the respondents provided detailed comments with the following key themes:

• in general the comments supported the use of cost recovery notices
• the use of such notices is in line with the principle of that business should incur the cost of enforcement
• t was highlighted that the use of such notices helps business to understand the true cost of enforcement
• concern was expressed that in some cases costs may be disproportionate to the offence in question

2.4 Scheme level appeals

We asked one question on our proposed appeals process for decisions relating to scheme applications. 29 respondees answered this question. 71% supported the proposal.

12 of the respondents provided detailed comments with the following key themes:

• a number of respondents had conflated this scheme level appeal with appeals associated with enforcement actions
• it was asked if a charge would be made for this appeal
• a definition of ‘legitimate person’ was requested
• a number of comments were made stating that the process should be transparent, fair, impartial and persons hearing the appeal should have relevant experience

3. Government response

The majority of responses to this consultation were supportive of the proposed improvements to the enforcement of the protected food name scheme. Accordingly, the proposed changes have been introduced as The Quality Schemes (Agricultural Products and Foodstuffs) Regulations 2018. This new regulation came into force on 1 January 2019.

During the consultation we received feedback regarding a number of elements to our proposal, including:

• reporting requirements for both verification and enforcement
• interaction between the new enforcement regime and powers provided by existing legislation
• level of penalty
• scheme level appeals

3.1 Verification and enforcement reporting

We received a range of comments regarding the reporting requirements for both verification bodies and enforcement bodies. There were a number of themes which were consistent with both reporting requirements including the principle and requirement to report verification and enforcement results and outcomes and the proposed timescales to report these results.

Verification reporting

There were a number of pieces of feedback in relation to questions 1 to 3 regarding the reporting of verification inspections. The majority of the feedback on these questions covered both the frequency and the appropriateness of reporting findings. As a result of this feedback we have determined that our proposal, which requires Control Bodies to notify Defra of verification findings immediately in cases of non-compliance and within 28 days for all other results, is consistent with the requirements of EU Regulation 882/2004. In addition this action addresses findings from the 2012 EU Food and Veterinary Mission audit which sought improvements between co-ordination and communication between Control Bodies and the Competent Authority. We understand concerns regarding the potential reporting burden on Control Bodies and Defra will work with these bodies to ensure the mechanism for reporting verification findings is appropriate.

Feedback was also provided as to whether it would be more appropriate to report verification results to trade associations in place of Defra. We have considered the merits of this suggestion, however, as it is not a requirement for a producer to be a member of such an association this would not be a feasible or practical option. However it should be noted that trade associations do have an important role in promoting, monitoring and ensuring standards are met and raised.

Finally it was suggested that other relevant bodies may benefit from access to this information. We will explore with relevant bodies what their requirements are and how wider use of our information might be achieved.

Enforcement reporting

Feedback was provided to questions 4 and 5 regarding the reporting of enforcement outcomes. Several comments were made proposing annual reporting instead of the 28 days proposed by Defra. We have considered this suggested amendment to the frequency of the proposed reporting requirement and have concluded that, as the proposal only asks for the reporting of formal action (e.g. use of power of entry, issuing of compliance notices, etc.) and the frequency of this is expected to be low, reporting after enforcement actions have been completed would be less burdensome than reviewing, collating and then reporting enforcement once a year. Having this information reported centrally on a more frequent basis would also mean that Defra would be better equipped to respond to any emergent trends and issues which might not be apparent when viewed in isolation.

We accept that there are concerns with potential reporting burden and Defra will work with enforcement bodies to ensure mechanisms for reporting verification findings are efficient. If, as an unintended consequence, the new regulations result in an increase to the number of formal enforcement actions being taken, Defra will consider changing the reporting requirement when a review of these regulations takes place.

A request was also made to provide better advice and guidance to ensure producers have a fuller understanding of labelling and marketing requirements for the scheme. We will explore options with relevant stakeholders to see how this request could be achieved.

3.2 Interaction between new enforcement regime and existing powers

Questions 6, 7 and 8 provided a number of comments and observations regarding the interaction between these new powers and the existing enforcement options. These news powers are in addition to and complement existing powers. For example there may be instances where it is appropriate to enforce using the Fraud Act 2006 rather than the enforcement powers provided in the new regulations. Enforcement officers should use their judgement to enforce using the appropriate legislation.

As the new powers will provide a bespoke set of enforcement regulations it is appropriate for all of the powers required to be contained within them.

To ensure that the new regulations are able to be effectively used by enforcement bodies we are in the process of preparing supporting guidance. We are also considering with relevant stakeholders what other opportunities may be available to improve knowledge in this particular area of enforcement.

3.3 Non-compliance penalty, discount for early payment and cost recovery notices

Questions 9, 10 and 11 generated a number of comments on penalty levels, the appropriateness of early payment discount and the option of cost recovery notices. Comments on the level of penalty varied, with some respondees being of the view that the maximum penalty was too high and other of the view that it was too low. £40,000 reflects the maximum non-compliance penalty which could be issued to someone found to be in breach of the new regulations and having considered these comments is determined to be the correct level of penalty to be dissuasive, reflecting the potential value that infringements of the scheme could have. During the development phase of these regulations options were considered, including using a penalty based on company turnover, however this and other options were considered unduly burdensome. Guidance will be issued to support enforcement officers determining an appropriate level of penalty. It should also be noted that other enforcement options remain, including the use of the Fraud Act 2006.

Feedback was provided on the merits and implications of offering an early payment discount on the non-compliance penalty. It is appreciated that there were concerns that this would be a weakening of the deterrent effect of the penalty, however it was felt that ensuring local authorities could effectively implement this regime outweighed this concern.

Concerns were expressed that the cost recovery notices issued may be disproportionate to the non-compliance in question. In the enforcement regime only reasonably and necessarily incurred costs for investigation, administration and expert advice can be recovered. A detailed breakdown of these can be requested and an appeal to the First Tier Tribunal could be made. We believe this provides suitable protection to an individual or business who is served such a notice and ensures the cost of the enforcement action is met by this party.

3.4 Scheme level appeals

Question 11 on appeals within the consultation was regarding the appeal against decisions to send a protected food name application to the European Commission. This is separate to appealing enforcement actions made by enforcement officers, which will be heard by the First Tier Tribunal.

We have taken on-board the feedback regarding the need to ensure any appeal process is transparent and fair, and concerning the definition of a ‘person or group with a legitimate interest’. In future guidance we will clarify who qualifies as a ‘person or group with a legitimate interest’ for application appeal purposes.

4. Outcome of the consultation

As a result of this consultation The Quality Schemes (Agricultural Products and Foodstuffs) Regulations 2018 came into force on the 1st January 2019. Guidance will be made available to ensure that Control Bodies and enforcement bodies are able to use these new regulations effectively.