“Exporting Know How”: Opportunity in Ireland’s Regulatory Opportunity.
I’m here in my capacity as Chairman of Clonakilty Chamber of Commerce and as a lawyer with a special interest in the area of food law. But I’m also here because the speaker that they really wanted to get is in China!But the fact that I’m here because of a speaker being committed to a Chinese engagement is really significant. Think about it, how often would you have heard that as a reason somebody couldn’t make it five years ago.
And it’s extremely encouraging. The obvious commitment of the government to establishing links with China and the vigour with which Irish business have embraced the opportunity that is China give great grounds for optimism. But in order to be placed to avail of this opportunity we have to prepare and consider how we might do so.
The thing that most strikes anyone about China is its scale; there are 20 cities with a population greater than Ireland, the population is almost 3 times that of the EU and more than 4 times greater than that of the USA.
So in terms of a target market for the supply of the food this country produces the opportunity presented by China is practically limitless. But we cannot produce on this scale and therefore we need to choose our niche, the premium end of the market is one possibility.
Ireland has the potential to develop a premium luxury food brand in China. And the Chinese are coming here to see how we do it. The visit of Chinese Vice President to a Co. Clare farm in February on his only stop in Europe is extremely significant. We have since seen a massive investment in the bloodstock industry in China based on Irish know how.
Dr Pat Wall has been leading the way in hosting groups of Chinese students keen to come and learn Irish skills in animal husbandry and food production. The deal recently announced between UCD a major Chinese Dairy producer is one example of this.
This is one of the most valuable exports we have to this vast Chinese market – know how. And this brings me to my own area of specialist knowledge, law. The integrity behind this premium luxury food brand is based on quality which is backed up by regulation. But things like quality, taste and provenance only get to the starting blocks if the brand is fundamentally safe.
We’ve had some big calls on food safety in recent years. The pork dioxin recall was one of those, that was a really big call made by Irish regulators. It was huge call and it was the right call, it saved Ireland’s bacon. And I had some personal skin in this particular game. The night of Saturday 6th December 2008 was the night of the West Cork Bar Association Christmas party. I awoke on the Sunday morning with a particularly sore head craving a bacon sandwich. I went to the chill counter of our excellent local Scally’s Supervalu in Clonakilty to find the shelves cleared of pork products overnight. Never mind the economic ramifications for the country, that was a devastating moment for me personally!
But that call, made as swiftly and as universally as it was, meant that Irish pork was back on the shelves and, more importantly, trusted within a very short period of time. Other jurisdictions have found that when they fudged it, they damaged the integrity of their brand based on food safety.
The decision to re-introduce of the ban on raw milk has been controversial here in recent times and the position taken by the Minister on the basis of the advice from our regulators has been the subject of some vocal criticism. But decisions like these have to be seen in the context the international market for Irish milk powder in infant milk production, one in five infant formula feeds produced globally are made from Irish milk.
Irish regulation is European regulation. The Irish government’s strategic vision is to develop Ireland as a platform for China in Europe. Our know-how in terms of our regulatory framework and the implementation of that regulation in high quality premium food production is a valuable asset available for export. Chinese inward investment in Europe will need to understand our regulatory framework and Chinese domestic production will seek to learn from it. Pat has been showing us by example how we can lead the way in this.
Minister Simon Coveney launched an event for us a Clonakilty Chamber of Commerce on 2nd April, an event which I am delighted to say was extremely well supported by our leading food production businesses. Colette Twomey’s company is one of the main sponsors and we had representatives other leading food businesses such as Carbery Milk Products, Irish Yogurts and Scally’s Supervalu. As a result of a conversation that took place at the event one of our members travelled with the Minister on a trade delegation to China. One of the food producers I spoke to at the event talked about the idea of Irish food businesses setting up production in China where they would control what he called the “black box”, the know-how which gives the production it’s integrity and quality. A big part of the know-how in that black box will be food safety regulation and Irish lawyers and regulators should be leading the way in developing this.
In the course of its emergence as a developed economy, China is facing many challenges which have already been encountered – and are still being grappled with – by the stakeholders in the European unification project.
Both entities have large diverse cultural groupings under their governance, with the result that each has to deal with a very great diversity of food products and cooking practices. How the European Union has managed (or some would say failed) to impose a regulatory regime which ensures that consumer safety is put to the fore without impeding culinary creativity and cultural expression is something the Chinese authorities could take stock from.
The road which food safety law has travelled since the establishment of the European common market should also provide some salutary lessons to the Chinese. When the Treaty of Rome was adopted in 1957 there was no reference to consumer protection or public health. Instead, Article 3 was concerned with the elimination of barriers to trade and the abolition of obstacles to the free movement of goods, including foodstuffs.
For quite some considerable time the European Union’s approach to food law was driven virtually exclusively by commercial and market integration considerations. Then came the BSE calamity in the early 1990s. The crisis in consumer confidence left in its wake meant that EU legislators found themselves having to conduct a root-and-branch review of how EU food law had developed. Numerous other food scares, such as the Belgian dioxin scare in 2000 and the Spanish pomace oil recall in 2001, reaffirmed the need for effective safeguarding of consumer safety.
That the EU had learnt its lesson from this sequence of debacles and had taken measures to address prior shortcomings became clear in July of 2002 when the European Rapid Alert System for Food and Feed was activated after concerns that certain dangerous hormones had made their way into the food chain.
Our own experience in relation to pork dioxins in 2008 means that both the regulators and the regulated in this country have hands-on experience and knowledge of how a food scare is quelled effectively.
While, due to restrictions on civil liberties and media freedom, we cannot be completely certain as to the state of mind of your average Chinese consumer, we have heard of horror stories where the use of adulterants in foodstuffs has caused significant fatalities and it is safe to assume that, with an ever increasing middle class, the level of sophistication and discernment of a large cohort of food consumers in China is increasing apace.
It is therefore safe to assume that there will be a demand for the adoption of principles underpinning the regulation of food law which have emerged in the European Union in latter years. In this regard, the general principles espoused in Regulation 178/2002 will no doubt prove extremely instructive. These principles include the obligations on all food producers throughout the food chain to produce safe food and to have in place comprehensive traceability systems so that product recalls are a meaningful and effective prophylactic measure in the event of a food crisis.
Regulation 178/2002:
• Establishes the rights of consumers to safe food and to accurate and honest information to enable them to choose a healthy diet.
• Determines that regulations shall be underpinned by risk analysis carried out with reliable scientific techniques which are independent, objective and transparent.
• Establishes ‘the Precautionary Principle’ meaning that risk managers may take measures to protect human health where there is a concern in this regard but the scientific information available is not conclusive.
• Imposes rules to ensure traceability throughout the entire food production system.
• Places the primary responsibility for ensuring compliance with food law with food businesses.
• Provides that food should not be placed on the market if (i) it is injurious to health; or (ii) it is unfit for human consumption.
• Established the Rapid Alert System for Food & Feed (RASFF) which revamped the Rapid Alert System as it was not seen as fit for purpose. The Commission and the European Food Safety Authority (EFSA) operate this system in times of food emergencies.
If elements of the European experience in developing a regulatory framework for food safety are to be replicated in China, we will also see a profound divergence between those producers who seek to increase their output massively by the exploitation of modern equipment technologies and those producers who seek instead not to compete on this giant level but to identify niches for high quality, value-added products and to develop a reputation for excellence in the production of these. It is surely in this area that Irish producers and their regulatory advisers can excel in sharing their know-how and experience to their Chinese counterparts.
The reach of EU food law is ever expanding. Whereas in earlier times this was an area which was contented to confine itself to very basic food safety issues, such as the prohibition of adulteration and unsafe production techniques, in more recent times there has been an expansion into more evolved areas such as the regulation of nutritional qualities associated with foodstuffs. This is another field in which Ireland has shown itself to be a world leader both in the case of innovation of new technologies and in the designing of products which comply with the relevant regulatory constraints.
The fastest cars have the best brakes. Good regulation isn’t a hindrance to progress it is an essential component of it. Good risk management provides this industry with the brakes it needs to enable it to travel at the speed required by the opportunities. Having a dynamic food industry that consumers trust is based on good regulation. Developing food business on the scale required by market opportunities such as those presented by China will present massive regulatory challenges. As a country with proven expertise and invaluable experience at the forefront of European regulation we should be looking to realise the potential in this regulatory know how as one of our most valuable exports in this industry.
-- speech by Flor McCarthy, April 2012
No comments:
Post a Comment