EU F&B regulatory review 2021

EU F&B regulatory review 2021

Regions in the Spotlight 12-23 April 2021

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Contents EU regulatory update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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EU General Food Law reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Novel foods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Spotlight on GMOs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Reform of the Common Agricultural Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Spotlight on organics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

The European Green Deal and Farm to Fork Strategy . . . . . . . . . . . . . . . . . . . . . . . 7 New rules on origin labelling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Brexit-related changes to food labelling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Key takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

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Regions in the Spotlight 12-23 April 2021

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EU regulatory update There are big changes ahead for the European food and beverage industry, as several new pieces of legislation come into force in 2021 – and more reforms are in the pipeline. Sustainability is a major watchword, as the European Commission has identified sustainable food systems as a potential tool to provide competitive advantage and new opportunities for European businesses1. New funding through the Common Agricultural Policy (CAP) and research grants through the latest Horizon Europe programme also will take sustainability into account more than ever before.

Other key themes include transparency, with new rules to make industry research and data more accessible, including for novel foods and GMOs, and a strong push to boost organic farming, driven by increased consumer demand for organic products2.

This report takes a broad look at some of the main regulatory issues affecting food and beverage companies in the months and years ahead. What do they mean for your business?

EU General Food Law reform Transparency is the key focus of this reform. From March, companies will be required to publish scientific data related to the safety of food ingredients and additives, whether the results are favourable or not.

The intention is to build consumer trust in EFSA’s food safety assessments, which often are based on data provided by industry and industry-funded studies, running the risk that consumers will perceive EFSA’s decision-making as lacking independence. The impetus for the reforms was controversy around renewed approval of the pesticide glyphosate, as EFSA was bound by strict confidentiality rules and consumer groups criticised it of poor risk communication3. The Commission has said the new legislation is 'a direct response' to a successful European Citizens’ Initiative to "Stop Glyphosate"4, but it also builds upon an evaluation of the General Food Law Regulation5, completed in January 2018.

What it means In practice, all studies and information supporting a request from EFSA will be made public automatically once it has accepted an application. According to the Commission, “This will be done at the very early stage of the risk assessment process, in an easily accessible electronic format with the possibility to search, download and print the studies.”6 Many manufacturers have argued that the proposed transparency requirements could lead to a less competitive business environment in the EU, and could drive innovation elsewhere, to countries and regions where companies can have greater control of their intellectual property7.

However, the reform does allow companies to request that EFSA keep some of their data confidential – and explicitly provides that the updated rules should not jeopardise those that are already in place to protect IP rights. Information on the manufacturing or production process, for instance, can remain confidential, if requested. Commercial information and commercial links may also be kept confidential8.

The changes will result in a Common European Database of commissioned studies, which anyone will be able to use to check for existing research, and which EFSA can use to double-check industry submissions to ensure they do not omit any relevant previous results.

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Novel foods Consumer groups like BEUC have welcomed the reforms – and even suggested that they could go further9 – while the FoodDrinkEurope trade group suggested the legislation could dampen innovation in the region10.

Christiaan Kalk, Senior Regulatory Affairs, Health and Safety Consultant at LSBI, maintains that despite additional transparency requirements, there is likely to be little change in the number of businesses applying for novel foods status for their products. He said:

“Companies are reluctant to reveal what they are doing, but they need to move on as well and, importantly, it is possible for them to protect essential data. I expect the number of consultation requests, notifications and applications under the EU novel food regulation will continue to increase over 2021, just as it did since the end of 2017, when the updated Regulation came into effect.”11 Kalk suggested that this momentum can be explained in part by a faster, more transparent process offered by the updated novel foods regulation itself, as well as higher demand for more sustainable and healthier foods and ingredients. He said:

“Our common understanding of how to improve and use living cells and organisms keeps growing as well. The growth of this demand and this understanding has only accelerated since the COVID-19 pandemic emerged. In novel foods, startup companies and SMEs by and large have taken the initiative in a development that is overturning food production and agriculture as we know it.”12 Novel foods legislation also has been clarified in recent months after a decision from the European Union’s Court of Justice in October that whole insects and ingredients made from them (such as flour) did not fall under the old novel foods regulation13, which referred only to 'food ingredients isolated from animals'.

This means that companies that use insects as an ingredient, for instance, now must apply for novel foods approval under the updated novel foods rules.

This was a disappointment for some, who had counted on the legal ambiguity to avoid what can be a lengthy and complex process to secure novel foods approval14. On the other hand, the International Platform of Insects for Food and Feed (IPIFF) welcomed the clarification. IPIFF Secretary-General Christophe Derrien said in a statement that this ruling is important as it may put an end to the uncertainty that insect producers who commercialised such products before 1 January 2018 have been facing.15 Member states had held diverging views about how to interpret the law, meaning that whole insects and ingredients derived from them were considered ‘novel’ in some countries but not others. Within the ECJ’s clarification, transitional rules have been put in place to ensure companies with insect-based foods and ingredients already on the market can continue to sell them in anticipation of novel foods approval16.

About 30 applications for insect-based foods and ingredients are outstanding.

EFSA issued its first novel foods opinion on edible insects on January 13, 2021, affirming that dried yellow mealworm is safe for use in food and feed17.

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Spotlight on GMOs The requirement for greater transparency also applies to safety data for genetically modified organisms (GMOs). Biotech advocacy group EuropaBio has applauded the move, saying that decisions around food safety must be based on facts. However, it fears that political motivations will still be allowed to influence policy. It argues that this erodes trust in European food safety policy, threatens innovation and damages the EU internal market18.

Indeed, member states are free to refuse cultivation of properly assessed GMO crops within their territory.

The European Commission says its aim is to strike a balance between scientific advice and the decisions of democratically elected governments on important issues regarding food and the environment19. EuropaBio General Secretary Nathalie Moll said in a statement that:

“Unfounded concerns and insufficient knowledge of the multiple benefits of these products persist. A system in which products assessed as safe are not approved is not logical.”20 Meanwhile, consumer concern about GMOs has declined dramatically over the past decade, with 27% of Eurobarometer survey respondents saying they were concerned about the safety of genetically modified ingredients in foods or drinks in 2019, down from two-thirds (66%) in 201021.

In contrast to production of foods and ingredients covered by novel foods legislation, the market for foods and ingredients produced using genetic modification is still dominated by a handful of large corporations.

Christiaan Kalk commented that:

“Large corporations have the expertise and the capital it takes to jump over the safety and regulatory hurdles that are high, especially in the EU. Development of new foods and ingredients using genetic modification may speed up, maybe even in the course of this year. Under increasing pressure from the public, political and scientific debate, it should become clearer what the safety and regulatory requirements will be for more refined techniques of gene editing, like the use of CRISPR in food production.”22 He added that as the public has witnessed the rapid development and introduction of Covid vaccines, delivered using genetic engineering, the time may be ripe for further introduction of genetic modification in the agro-food chain.

“It will help if an inclusive model for development emerges here as well, with room for startup and SME companies,” he said, adding that the new rules on transparency could help rebuild consumer trust.22 In addition, the reform covers food and feed additives, smoke flavourings and food contact materials, specifically looking at any safety concerns related to current consumption levels and exposure. Regular assessments are required for such products taking into account the latest data, including toxicity and product analysis23.

Most of the changes to the General Food Law take effect from March 27, 202124.

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Reform of the Common Agricultural Policy The Commission intends that the new CAP will contribute to the European Green Deal, an action plan to improve biodiversity, cut pollution and boost the efficient use of resources in the EU25. As a result, it says 40% of the CAP budget will be 'climate relevant'26. According to Alan Matthews at Trinity College Dublin, the EU’s commitments to the Paris Climate Agreement and the United Nations Sustainable Development Goals are fuelling the drive toward more sustainable food systems27. He wrote in the journal Intereconomics that:

“Pressure to embed environmental and climate action even more centrally into the CAP has moved up the political agenda. (…) The Paris Agreement lays out the EU emission reduction goals for 2030 to which agriculture must contribute.”28 The food industry is particularly exposed to the effects of climate change, and the European Commission has said that these are already being felt by farmers across the EU, citing changing rainfall patterns and seasonality, rising temperatures and extreme weather events29. But it says the food industry also has tools to help mitigate the effects of climate change, including crop and farm management solutions, as well as technological solutions and improvements in the use of resources.

According to Kalk, when it comes to CAP reform:

“The EU used to be and, in financial terms still is, a subsidy channel for agricultural production, mainly for large-scale farming. We must shift our investments to support inclusive, fine-mazed, sustainable and circular activities. It must pay off to do the right thing. The industrial agriculture lobby is still dominant. But its days are counted.

There will be a shift from animals to fermenters. Land use and ownership will have to be adapted to new insights.”30

Spotlight on organics The organic food sector has emerged as one of the beneficiaries of CAP reform, as it continues to gain in importance in the EU, for both farmers and consumers31. About 6.7% of member states’ farmland is under organic management and is growing year on year32. The new CAP specifically aims to increase organic farming in the region, and about 6.4% of the EU budget for agricultural and climate action is earmarked for organics33.

According to the Commission, organic farming can “help deliver on the sustainability of food production and consumption, whilst also contributing to the protection of nature and reversing the degradation of ecosystems”.34

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Organic farming responds to other European Commission targets, such as reducing the use and impacts of pesticides by 50%. It also aims to dedicate 10% of agricultural area to high-diversity landscapes, which in turn make it easier to use alternatives to chemical pest control as required in organic farming35. However, some question whether a shift to organic farming holds all the answers.

According to the authors of a recent review published in MDPI36, “The greatest challenge for organic food is to reduce the trade-offs between productivity and long-term sustainability.”

They added that common mechanisms and standards were required across the EU if the region hopes to avoid problems related to organic food development and environmental protection.

Others have questioned whether promoting organic practices at the expense of conventional farming could leave some consumers priced out of the market for certain foods.

Kalk said:

“Greener and healthier foods will come at a cost. Farmers deserve a fair income and low-income families are entitled to healthy, nutritious and palatable foods, too.”37

The European Green Deal and Farm to Fork Strategy The European Green Deal is the European Commission’s plan to make the EU economy sustainable, and policy for sustainable food production is a key part of that. Represented in its Farm to Fork strategy,38 it covers every part of the food network, including big changes to food production and farming practices, as well as making healthier food choices easier for consumers.

According to the strategy document39, it plans: •C utting food waste by half, with legally binding targets by 2023. At a manufacturer level, digital tools for procurement planning and measuring food loss and waste are among the recommendations under consideration40.

• A mandatory front-of-pack nutrition labelling system, as well as a sustainability labelling scheme that takes environmental and social impacts into account41.

• Promoting sustainable food systems on a global level.

• Promoting healthy, plant-based foods for the health of people and the environment.

• €10 billion of investment in research and innovation under the Horizon Europe programme42.

Many of these proposals are still at an early stage, as the Commission targets farming initiatives first and foremost, but each could impact food companies in the coming years, from the largest multinationals to the smallest startups.43

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Overlapping with the objectives set out for the CAP reform, organic food and farming also are major considerations under the Farm to Fork strategy. Under both, the Commission has set a target for 25% of EU farmland to be farmed organically by 2030.44 It has promised an action plan to help reach this target, and to help member states stimulate supply and demand for organic products.45 “It will ensure consumer trust through promotion campaigns and green public procurement,” the Commission said.46 New EU-wide organic production and labelling rules were due to come into force from January 1, 2021, but the European Commission has pushed back their implementation to January 1, 202247. The rules aim to prevent fraud, promote fair competition and maintain consumer trust48.

What it means For food manufacturers, some ingredients will need to come from certified organic sources when they did not before. These are: • Yeasts used as food or feed • Maté, sweetcorn, vine leaves, palm hearts, hop shoots, and other similar edible parts of plants and products produced therefrom • Sea salt and other salts for food and feed • Silkworm cocoons (suitable for reeling) • Natural gums and resins, beeswax, essential oils • Cork stoppers of natural cork (non-agglomerated and without any binding substances) • Cotton (un-carded or combed) and wool (un-carded or combed) • Raw hides and untreated skins • Plant-based traditional herbal preparations49 The use of natural flavours also will be restricted in organic processing. From 2022, only natural flavours from the mentioned ingredients can be used in organics. For example, only “natural lemon flavouring” will be allowed, meaning that at least 95% of the flavouring comes from lemon.

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New rules on origin labelling50 Starting in April 2020, manufacturers selling in the EU are now required to list the origin of primary ingredients if that differs from its place of manufacture. A product that is ‘Made in France’, for instance, needs to specify if any of its ingredients are grown in another country51.

The regulation also gives more flexibility when indicating the country or region of origin. Previously, at least 98% of a product’s ingredients had to come from the named country or region, but this has been reduced to 95%. In addition, manufacturers can identify a food as the result of agriculture in either the EU as a whole, a certain EU country, or even a region within an EU country. For example, if 95% of the ingredients are farmed in Tuscany, the manufacturer could refer to 'Tuscany agriculture' on the product packaging.52

Brexit-related changes to food labelling Following the UK’s exit from the European Union on January 1, 2021, Great Britain (England, Scotland and Wales) has opted to retain EU food legislation related to: • Food imports and exports • Safety • Traceability • Labelling and product withdrawals and recalls53 On the other hand, EU manufacturers that import food products from the UK need to comply with additional requirements in order to place their products on the EU market. For food labelling purposes, packaged food must carry an EU address, and UK addresses are no longer valid, with the exception of food business operators established in Northern Ireland54.

Origin labelling also is affected. Ingredients from the UK are no longer considered EU ingredients, and labelling must reflect this. Only ingredients of non-animal origin that were already on the EU market before January 1, 2021 are allowed to circulate freely in both the EU and UK55.

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Key takeaways • Companies must release all safety-related data when requesting an EFSA opinion • Data will be made publically available via a Common European Database • Some information may remain confidential, including commercial information and information on the production process • Insects and insect ingredients require approval under updated novel foods rules • GMOs are also subject to the new transparency requirements • CAP reform and funding will prioritise sustainable agriculture and food production • The Commission specifically intends to boost both supply and demand for organic food • The European Green Deal also targets waste reduction, sustainability labelling and plant-based food • Companies should check their labelling complies with new rules for organics, as well as origin labelling

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Sources https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal/actions-being-taken-eu/farm-fork_en https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en 3 https://www.europarl.europa.eu/RegData/etudes/BRIE/2018/630315/EPRS_BRI(2018)630315_EN.pdf 4 https://europa.eu/citizens-initiative/initiatives/details/2017/000002_en 5 https://ec.europa.eu/food/safety/general_food_law/fitness_check_en 6 https://ec.europa.eu/commission/presscorner/detail/en/MEMO_19_1031 7 https://www.europarl.europa.eu/RegData/etudes/BRIE/2018/630315/EPRS_BRI(2018)630315_EN.pdf 8 https://www.leatherheadfood.com/files/2020/09/General-Food-Law-Innovation-and-Transparency-Slides_0.pdf 9 https://www.beuc.eu/publications/beuc-x-2018-059_beuc_position_paper_general_food_law_revision.pdf 10 https://www.fooddrinkeurope.eu/uploads/statements_documents/FoodDrinkEurope_statement_on_General_Food_Law_reform1.pdf 11 Christiaan Kalk, Senior Regulatory Affairs, Health and Safety Consultant at LSBI, via email January 13, 2021.

12 Christiaan Kalk, Senior Regulatory Affairs, Health and Safety Consultant at LSBI, via email January 13, 2021.

13 http://curia.europa.eu/juris/liste.jsf?language=en&td=ALL&num=C-526/19 14 https://tomorrowsfoodandfeed.khlaw.com/2020/10/the-european-unions-court-of-justice-recently-moved-to-clarify-the-status-of-wholeinsects-as-a-novel-food/ 15 https://ipiff.org/wp-content/uploads/2020/10/14-10-2020-IPIFF-PressRelease-The-European-insect-sector-welcomes-the-CJEU-ruling.pdf 16 http://curia.europa.eu/juris/document/document.jsf?docid=231847&mode=req&pageIndex=1&dir=&occ=first&part=1&text=&doclang =EN&cid=5346732 17 https://www.efsa.europa.eu/en/efsajournal/pub/6343 18 https://www.europabio.org/sites/default/files/Comitology%20PR-13.02.2017-final%20formatted.pdf 19 https://www.europarl.europa.eu/EPRS/EPRS-AaG-545708-Member-State-bans-on-GMOs-FINAL.pdf 20 https://www.europabio.org/sites/default/files/Comitology%20PR-13.02.2017-final%20formatted.pdf 21 https://www.efsa.europa.eu/sites/default/files/corporate_publications/files/Eurobarometer2019_Food-safety-in-the-EU_Full-report.pdf 22 Christiaan Kalk, Senior Regulatory Affairs, Health and Safety Consultant at LSBI, via email January 13, 2021.

23 https://www.efsa.europa.eu/sites/default/files/event/meeting-flavourings-240619-presentation.pdf 24 https://www.europarl.europa.eu/RegData/etudes/BRIE/2018/630315/EPRS_BRI(2018)630315_EN.pdf 25 https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en 26 https://ec.europa.eu/commission/presscorner/detail/en/fs_20_910 27 https://www.intereconomics.eu/contents/year/2018/number/6/article/the-cap-in-the-2021-2027-mff-negotiations.html 28 https://www.intereconomics.eu/contents/year/2018/number/6/article/the-cap-in-the-2021-2027-mff-negotiations.html 29 https://ec.europa.eu/info/food-farming-fisheries/sustainability/environmental-sustainability/climate-change_en 30 Christiaan Kalk, Senior Regulatory Affairs, Health and Safety Consultant at LSBI, via email January 13, 2021.

31 https://ec.europa.eu/commission/presscorner/detail/en/QANDA_20_1539 32 https://ec.europa.eu/info/news/organic-farming-continues-grow-dynamism-fails-boost-agricultural-employment-levels_en 33 https://www.euractiv.com/section/agriculture-food/news/the-impact-of-the-new-cap-on-organic-farming/ 34 https://ec.europa.eu/commission/presscorner/detail/en/QANDA_20_1539 35 https://ec.europa.eu/commission/presscorner/detail/en/QANDA_20_1539 36 https://www.mdpi.com/2304-8158/8/5/144/htm 37 Christiaan Kalk, Senior Regulatory Affairs, Health and Safety Consultant at LSBI, via email January 13, 2021.

38 https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal/actions-being-taken-eu/farm-fork_en 39 https://ec.europa.eu/info/sites/info/files/communication-annex-farm-fork-green-deal_en.pdf 40 https://ec.europa.eu/food/sites/food/files/safety/docs/fs_eu-actions_action_implementation_platform_key_recommendations.pdf 41 https://ec.europa.eu/food/farm2fork/sustainable-food-consumption-and-facilitating-shift-towards-healthy-sustainable-diets_en 42 https://ec.europa.eu/info/horizon-europe_en 43 https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal/actions-being-taken-eu/farm-fork_en 44 https://ec.europa.eu/commission/presscorner/detail/en/QANDA_20_1539 45 https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1596443911913&uri=CELEX:52019DC0640#document2 46 https://ec.europa.eu/commission/presscorner/detail/en/qanda_20_885 47 https://ec.europa.eu/info/food-farming-fisheries/farming/organic-farming/future-organics_en 48 https://ec.europa.eu/info/food-farming-fisheries/farming/organic-farming/organics-glance_en 49 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02018R0848-20201114 50 https://tomorrowsfoodandfeed.khlaw.com/2020/06/new-eu-origin-labelling-rules/ 51 https://ec.europa.eu/info/news/commission-adopts-new-rules-labelling-origin-primary-ingredients-food-2018-may-28_en 52 https://ec.europa.eu/info/news/commission-adopts-new-rules-labelling-origin-primary-ingredients-food-2018-may-28_en 53 https://www.food.gov.uk/business-guidance/general-food-law 54 https://www.fsai.ie/food_businesses/brexit/labelling.html 55 https://www.fsai.ie/food_businesses/brexit/labelling.html 1 2

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