In its third batch of technical notices, the UK Government set out guidance for food and drinks businesses on potential changes to the regulation of their products in the event that the UK exits the EU without a deal on 29 March 2019, and it is currently consulting on a number of areas.
The potential changes which we consider below cover (1) origin labelling and addresses; (2) geographical indications; (3) organic foods; and (4) natural mineral waters.
(1) Origin labelling and addresses on labels
In the event of a no-deal Brexit, food or ingredients from the UK would no longer be able to refer to the 'EU' in their origin labelling.
The labels of pre-packaged foods sold across the UK and EU would also need to be changed to include a UK address and an EU address of a responsible business operator. At present, the labelling of pre-packaged products sold in the EU only needs to include a name and address in the EU. In practice, this means that a food business would need to ensure that it had hubs established in both the UK and the EU or was otherwise able to include in the labelling the address of the importer of its product.
To mitigate impacts on businesses, foods bearing an EU address which had already been placed on the UK market would be allowed to be sold until stocks ran out, and the UK Government is also considering allowing food labelled with an EU address to continue to be placed on the UK market for up to six months following any no-deal exit.
(2) Geographical indications (GI)
There are currently 86 GI-protected UK product names (including Welsh laverbread, Melton Mowbray pork pie and Cornish Pasty), which together make up 25 per cent of the value of UK food and drink exports.
A new UK regime of GI schemes will be put in place for after the UK's exit from the EU and the UK Government is consulting on proposed changes until 1 November 2018. All 86 UK GIs would be given the new UK GI status automatically, but EU producers would likely have to apply for UK GI status for their products. A new UK logo for GI products will replace the EU logo.
UK producers wishing to have EU GI status, and the right to use the EU GI logo, after a no-deal Brexit would need to submit applications to the European Commission as ‘third country’ producers and show that the GI was protected in the UK – and they may also need to consider whether trademark protection would also be necessary.
(3) Organic foods
In a no-deal scenario, UK organic food businesses would not be allowed to use the EU organic logo on the packaging of their products after existing stocks had ran out. A new UK imports traceability system would also be set up to replace the current EU system.
UK organic food operators would also only be able to export to the EU if they were certified by an organic control body recognised and approved by the EU to operate in the UK. The UK Government is seeking to negotiate an equivalency arrangement with the EU and organic food businesses operating in the EU will want to follow developments in this area closely.
(4) Natural mineral waters
Natural mineral waters currently undergo a specific recognition process in order to be able to be marketed across the EU. The Government has said that UK mineral water producers would not need to renew their recognition in the UK market. However, in a no-deal scenario, mineral waters granted recognition in the UK would no longer be recognised in the EU. UK mineral water producers therefore need to be prepared to apply for recognition of their water through a Member State. The UK Government is consulting until 13 November 2018 on options for the recognition in the UK of natural mineral waters which are or may in the future be recognised in the EU.
The need for contingency planning
It's clear that a no-deal scenario would lead to a number of practical issues for food and drink businesses which operate across the UK and the rest of Europe. Whether a deal is reached (and approved by the UK Parliament) is unlikely to be known for some months, leaving a vanishingly small time for businesses to make the necessary arrangements for the risk of no-deal. Some key preparations now will help to limit – so far as possible – any unexpected obstacles to businesses' operations arising from a no-deal Brexit and may well prove more-cost effective than waiting for absolute clarity in the negotiations.