Charged Atmosphere

Tension was in the air, as the FSA set out its stall for MHS costing reform at the recent Big Debate. But while the ensuing discussion was passionate, it remained constructive for all. Carina Perkins reports


The Food Standards Agency (FSA) unleashed industry fury when it announced that it was planning to increase meat hygiene charges again this year. Keen to demonstrate a commitment to the consultation process and improve relations with industry, FSA bosses put themselves in the firing line at a debate on the issue last Friday, organised by MTJ. Tensions inevitably ran high, but delegates remained controlled and conducted a passionate, but constructive dialogue. The debate, which will feed directly into the FSA consultation process, covered all aspects of the charging proposals from the proposed cost increase to time-based charging and changes in EU regulation. 

FSA chief executive Tim Smith kicked off by setting out the case for the MHS, outlining the work that the organisation has already done in improving efficiency and saving costs. “Over 400 redundancies have been made from an original 2,024 to 1,600 today. This is ahead of target for a headcount reduction of 15% by 2010/11, as recommended in the Tierney Report,” he said, adding that FSA-led IT projects and individual Business Agreements should also lead to future savings.

Smith accepted that current inspection regulations are neither risk-based nor proportional and said the FSA would continue to push for a reform of the EU legal framework, but that this could take some time.

In the meantime, he said, the FSA would continue with its plans to increase charges, in line with EU law regarding minimum charging rates across Europe. “We have proposed potential increases to charging of 4%, 6% and 9%,” he said. “The consultation makes clear that our preference is 9% and I firmly believe that this is a fair and balanced approach.”

Stepping up to the podium, British Meat Processors Association (BMPA) director Stuart Roberts questioned the government’s decision to seek full cost recovery. “It must be accepted that many of the controls deliver public goods and it is quite right that these should be paid for by the taxpayer,” he said, pointing out that the meat industry has unique, disproportionate controls and is treated differently to all other food businesses. “Do restaurants pay for EHO visits, do pubs pay for weights and measures checks?” he asked.

Roberts praised the MHS for its “impressive” cost reduction exercise and said that Business Agreements would allow plants to reduce their MHS bills. “The concept of Business Agreements – where individual operators and their MHS team are able to tailor their service needs directly to the needs of the abattoir and be charged accordingly – has the potential to deliver significant benefits,” he said. However, he added that the best way to reduce costs would be a change in BSE and hygiene regulations and criticised the FSA for moving too slowly in this area. “I am fed up with hearing that the FSA is serious about delivering proportionality, but then fails to deliver it,” he said.

Concluding that there is still room for further reductions in the MHS cost base, albeit largely through FSA action on regulations, Roberts said that the proposal for a 9% increase is “almost unbelievable”, especially considering the current economic situation. “You do have to start to think about whether anyone in authority values the meat and livestock industry,” he said.

On hand to offer a small abattoir perspective, John Mettrick, butcher and abattoir operator, echoed Roberts’ sentiment that the MHS service is based on ill-devised legislation. He warned that full-cost recovery under the present inspection regime “would mean the closure of every small abattoir” and added that “in the present economic climate of increasing unemployment and business failures, it seems incredible that the FSA can contemplate an increase in charging rates for small business”.

Mettrick said that if costs are not reduced, small abattoirs will disappear and the UK’s ability to deliver local food will be severely compromised. “Local meat has been the flavour of the month for a while now and it is the small abattoir that enables the farmer to connect directly with the public,” he said. “If we lose small abattoirs we run the risk of increased illegal on-farm slaughter with no traceability or accountability.”

Questioning the importance of vets in small abattoirs, he urged for a move to cold inspection. “The ante-mortem inspection by a vet is just a rubber stamp on an abattoir owner’s ability to select good healthy stock,” he said. “Cold inspection would save a lot of wasted time in small plants, where processing is slower and more manual.”

He pointed out that many small craft abattoirs in Europe are not subject to the inspection regime applied to larger facilities. “It seems that rather than the level playing field in Europe, we have a mountain range,” he said.

Following the speeches, the debate began in earnest, with one of the key issues raised being where the burden of cost recovery should lie. National Farmers Union (NFU) deputy president Meurig Raymond stressed that if livestock production is to remain viable, “the cost will need to be passed up the supply chain rather than back down to producers”. But it was agreed that passing costs up the chain would also cause problems. Processors, both small and large, are facing reduced margins as a result of increased raw material costs and delegates agreed that passing a price rise on to consumers would be difficult, particularly given the current economic climate.

“Evidence shows that beef and lamb are extremely price-sensitive. Consumers will be turned away from these products if prices rise too high,” said Roberts, adding that perhaps a reduction in red meat consumption would suit the FSA’s drive to reduce intake of saturated fat. Smith denied outright that the cost increases had anything to do with the government’s dietary goals. “There are absolutely no plans for a backdoor reduction in red meat consumption,” he said.

After some discussion among delegates about the role of major retailers and the impact of passing costs on to consumers, Roberts pointed out: “It is not about who picks up the burden, but about the size of that burden and what we can do to reduce it.” Discussions then moved to the main issues under consultation – the 9% increase and time-based charging. Industry delegates agreed unanimously that a 9% increase would be disastrous and that no increase in charges could be justified in the current economic climate. “The FSA says that the 4% increase is the rate of inflation, but inflation is currently less than 1% and likely to drop further,” said Roberts.

However, he admitted that proposed cost increases would be less of a problem if the operators took advantage of the opportunity to reduce their overall MHS bill through Business Agreements. “Not many plants will pay a 4, 6 or 9% increase because they will have reduced the MHS structure in their business,” he said.

Norman Bagley, Association of Independent Meat Suppliers policy director, raised concerns over time-based charging. “If contractors charge on an hourly basis, then surely the only way they will make money is by adding hours.” Smith assured him that this would not happen. “That is why we have business agreements,” he said. “Both parties must agree.”

The small abattoir sector remained cautious about time-based charging, however. “I am afraid of time-based charging because in my plant, everything is slower than in bigger plants,” said Mettrick. “We don’t want to get to the point where small abattoirs cram production into faster times over and above our capabilities.”

Several delegates argued that smaller abattoirs have smaller supply chains and better consumer trust and should therefore be allowed to self-regulate. It was pointed out, however, that bigger plants are just as safe, with extensive independent audits in order to meet the hygiene demands of major supermarket customers. Overall, it was agreed that regulations must change for the whole of the meat industry.

Concluding that debate, Smith said he was happy to lobby for change in European regulation, because the real risk to consumer health lies in food-borne illness, a problem that meat inspectors cannot spot visually. “We have regulations that relate to industry which are completely inappropriate. I would rather take them and put them where risk is greater, such as in food-borne illness,” he said.

He promised that the FSA is doing its best to change to risk-based controls in the EU, but added that the agency needs the industry’s help to put pressure on the government. “You need to put your shoulder to the wheel and force MEPs to take the issue seriously.” 

He urged the industry at large to ensure it engages with the consultation process. “We will use the consultation
to brief the EU on the urgency to reassess controls,” he said, stressing that the debate with the FSA was an ongoing process.