regulatory impact assessment of eu food hygiene legislation

8/4/2019 Regulatory Impact Assessment of EU Food Hygiene Legislation

1/61

1

FULL REGULATORY IMPACT ASSESSMENTCONSOLIDATION OF EU FOOD HYGIENE LEGISLATION

CONTENTS PAGE

Section Pages

1 Timetable and title of legislation 2

2 Purpose and intended effect of the measure 2-5

3 Consultation 5-6

4 Negotiating Line and options 6-7

5 Costs and benefits 7-15

6 Consultation with Small Business 15-16

7 Competition Assessment 16

8 Enforcement and Sanctions 16-17

9 Implementation and Delivery plan 17-18

10 Post-Implementation Review 18

11 Summary and Recommendation 18-20

12 Declaration 20

Annexes

A The proposals 21-23

B Existing EU Food Hygiene Legislation 24

C Hazard Analysis and Critical Control Points (HACCP) 25-26

D The Cost of Indigenous Foodborne Disease 27-36

E Balance of Costs and Benefits 37-39

F Current Legislative Requirements to have a HACCP or 40Hazard Analysis System in Place by Sector in the UK

G March 2005 HACCP Board paper 41-58


2/61

2

1. Timetable and title of proposals

1.1 The instrument issued by the European Commission in June 2000 contained fivelinked proposals covering food hygiene requirements in the European Union.The

proposals were presented by the European Commission to the Agriculture Council on17th July 2000. Common Position on First Reading on the remaining four proposals wasreached at the Environment Council on 27 October 2003. The package achievedsecond reading in the European Parliament on 30 March 2004. The proposals clearedUK Parliamentary Scrutiny. On 29 April 2004, the new EU food hygiene legislation wasadopted, came into force in May 2004 and will apply on 1 January 2006.

1.2 The proposals were finally adopted as follows:

Regulation 852/2004 of the European Parliament and of the Council of 29 April 2004on the hygiene of foodstuffs.

Regulation 853/2004 of the European Parliament and of the Council of 29 April 2004laying down specific hygiene rules for food of animal origin.

Regulation 854/2004 of the European Parliament and of the Council of 29 April 2004laying down specific hygiene rules for the organisation of official controls on productsof animal origin intended for human consumption.

Directive 2004/41/EC of the European Parliament and of the Council of 29 April2004 repealing certain Directives concerning food hygiene and health conditions for

the production and placing on the market of certain products of animal originintended for human consumption, and amending Directives 89/662/EEC and91/67/EEC and Council Decision 95/408/EC.

1.2 The fourth proposal (now adopted as Directive 2002/99/EC), relating to animalhealth rules, is the responsibility of Defra and is not the subject of this RIA. Details ofthe legislation are at Annex A.

2. Purpose and intended effect of measure

The objective

2.1 The primary objective of the package of EU food hygiene Regulations is to optimisepublic health protection by improving and modernising the existing EU legislation. A listof the current legislation to be replaced by the Regulations is at Annex B. Legislationneeds to establish the conditions under which food is produced to prevent, eliminate oracceptably control pathogen (disease causing microorganism) contamination of food.The Regulations maintain, and set out more clearly, the duty of Food BusinessOperators to produce food safely a requirement that is contained in current legislationand is underpinned in General Food Law1. More risk based and flexible procedures willbe introduced better matched to the needs of individual businesses and to enforcement.

1 Regulation (EC) No. 178/2002 of the European Parliament and of the Council of 28 January 2002.


3/61

3

This would be facilitated by the introduction of food safety management proceduresbased on the application of Hazard Analysis and Critical Control Points (HACCP)principles. The application of HACCP-based principles in food manufacturing andpreparation is widely regarded throughout the EU and in most developed countries ascrucial to the management of food safety and, in turn, consumer protection. (Information

on HACCP, its current status in the UK and a short explanation of the 7 principles is atAnnex C.) The Regulations introduce a farm to fork" approach to food safety, byincluding primary production in food hygiene legislation for the first time in the majorityof cases.

Devolution

2.2 The Regulations are directly applicable throughout the UK. Separate nationallegislation will be introduced for each of the four countries of the UK to give effect to theEU Regulations and provide enforcement powers.

The background

2.3 The need for food hygiene legislation is generated by the risk to consumers ofillness or death from pathogenic microorganisms, which can occur in or cross-contaminate food at all stages from production to consumption. Current food hygienerequirements in the European Union are contained in a raft of legislation, the earliest ofwhich is 40 years old. The European Commission introduced, in June 2000, proposalsto update and simplify current legislation. The adopted EU Regulations hold implicationsfor around 760,0002 businesses in the UK.

2.4 Regulations 852 and 853 lay down requirements on food business operators,whereas Regulation 854 concentrates on the duties of member state competentauthorities. Regulation 854 would replace current legislation relating to the organisationof official controls on products of animal origin intended for human consumption. Itwould bring together official controls governing a number of sectors into one Regulation.It changes the present supervisory role of officials more toward one of audit ofoperators procedures based on HACCP principles, particularly in the case of meatplants. As such, the Regulation holds implications for the Meat Hygiene Service, LocalAuthorities, the Dairy Hygiene Inspectorate and possibly others, depending on hownational rules are determined. Directive 2004/41/EC is concerned with the repeal ofexisting legislation and amendment of certain other legislation that will remain in force

after the new legislation is implemented.

2.5 The current legislative requirements have very uneven coverage. At present,primary producers are not generally covered by food hygiene legislation. Retail andcatering businesses are covered by the general food hygiene directive (93/43) whichrequires businesses to comply with requirements corresponding to the first five HACCPprinciples, which identify and control hazards. Producers of products of animal origin arecovered by specific directives, most of which require the identification of critical pointsand control of those hazards (involving in most cases highly prescriptive detail, e.g.

2

The figure of 760,000 includes 160,000 businesses at primary production level (farms, fishing vessels etc) and600,000 food businesses (caterers, retailers, manufacturers etc) (see paragraph 5.2). As the method of collecting the

figures varies according to business sector, the overall figure is a reasonable estimate.


4/61

4

tiling of walls to 2 metres height). In some cases (producers of meat, fish and milkproducts), own checks additionally require verification and recording of procedures inplace, effectively applying the final two HACCP principles.

2.6 Under the application of subsidiarity, certain requirements on the proposals will

be implemented by national legislation and this is covered by a separate RIA coveringnational rules to give effect to the EU Regulations.

2.7 A new Feed Hygiene Regulation has been adopted and is closely related FoodHygiene legislation. A separate RIA has been prepared on the Feed Hygiene legislationthat will highlight the links to the Food Hygiene legislation.

The Current Legislative Regime - How the New Approach will work

2.8 The current legislation exhibits inconsistencies in approach and a degree ofduplication that makes it difficult to interpret and to enforce. It has not kept up with

change and innovation in food technology. This is addressed in the new legislation bybringing together the requirements into three regulations rather than 16 directives andupdating much of the information the older directives contained. It is clear also thatmany of the businesses, particularly in the catering sector, have little knowledge of thehazards inherent in the operations they undertake, or how to control them. By ensuringthat businesses identify hazards and control them in an appropriate manner, the newapproach will seek to address this issue.

Rationale for government intervention

2.9 The background against which the new Regulations should be viewed is theincidence of foodborne disease. A major study found that in 2000, it is estimated thatthe total number of cases of foodborne disease (referred to hereafter as IndigenousFoodborne Disease (IFD)) in England and Wales was 1,338,772 of which, 368,516visited a GP and 970,256 did not. It is estimated that 480 cases resulted in death.Cases reported as arising in the home exclude those of non-food origin. Based onevidence from laboratory reports for 2002, the incidence of foodborne disease inScotland is estimated to account for 11% of cases in the UK and Northern Ireland 2%.The cost of IFD, therefore, is estimated to be in excess of 1.5 billion per year(Information on food poisoning incidence in the UK is outlined at Annex D.). Evidenceon the origin of disease is limited, but data on general outbreaks show that the majority

(80-90%) originate in catering or retail outlets of various types. Additionally, most casesin the home are thought to originate from food containing pathogenic microorganismswhen purchased. It is possible that a small proportion of cases reported may be due toorganisms present in the domestic environment, but it is not possible or desirable toeliminate these cases from consideration here. The package of EU hygiene Regulationsaims to reduce the level of food borne illness throughout the UK.

2.10 In a separate study (by the PHLS in England and Wales) of 1210 general food-borne outbreaks of Infectious Intestinal Disease (IFD) reported by vehicle of infectionbetween 1992 and 1999, poultry accounted for 22% and red meat for 19% of cases. Inthe same study, fish and shellfish were found to account for 14% of cases. Precise

information on outbreaks specifically due to milk and dairy products is not available, butit is likely to be less than 10% of all cases. However, given the seriousness of the


5/61

5

pathogens that may be involved (e.g. E.coli O157, Listeria and Salmonella) it isimportant that appropriate controls are put in place. Bio-toxins in shellfish areresponsible for only a small number of food poisoning incidents in the UK each year.

2.11 The relationship between hazard analysis systems, knowledge and training and

safety is highlighted in a recent study3

. The study found that, in small retail and cateringbusinesses, the proportion of samples of unsatisfactory and unacceptable quality foodwas greater in premises where the manager had received no food hygiene training(20% retail and 27% catering) compared with those where the manager had done so(retail 11% and catering 19%). In addition, a greater proportion of samples wasunsatisfactory or unacceptable in retail premises where there was no hazard analysissystem in place (17%) compared with those that had a documented system (11%), oran undocumented system (13%). In catering premises, the equivalent figures are (22%),(18%) and (22%). It was also found that where the manager had received some foodhygiene training, the business was more likely to have a hazard analysis system inplace.

3. Consultation

Within Government

3.1 Other Government Departments, including devolved administrations, wereconsulted on the proposal through the Ministerial Sub-Committee on European Issues(EP). The Committee cleared the proposed UK negotiating lines and were updated ondevelopments and the adoption of the legislation. Officials have had more detailedcontacts with Agricultural Departments and Home Office on specific issues.

Public consultation

3.2 Since July 2000, when the measures were first issued, consultation withstakeholders has been ongoing. Consultation with stakeholders was initiated in July2000. This included issuing approximately 2000 consultation packs, supported by aninitial draft RIA, and posting the documents on the FSA web-site. Some 150 responseswere received. A summary of the comments received was posted on the FSA web-site.Consumer groups have generally welcomed the strategic direction of the proposals,especially with regard to a farm to fork approach, a HACCP-based food safety

management approach and simplified legislation. The food manufacturing and retailingindustries represent the most diverse group of stakeholders. There is widespreadsupport for the concept of simplifying the legislation and removing the inconsistenciesthat have developed in the different sectors. There is a general belief in these sectorsthat the proposals do not go far enough to simplify the legislation, the argument beingthat, if a HACCP-based approach is adopted, more of the prescription could beremoved. The multi-national based companies, in particular, welcome the legislationtaking the form of a Regulation rather than a Directive on the basis that a Regulationwould promote more consistent legislation throughout the Community. Manyrespondents expressed concerns about how the proposals might impact on smaller

3

Microbiological quality of food in relation to hazard analysis systems and food hygiene training in UK cateringand retail premises by CL Little, D Lock, J Barnes & RT Mitchell. Published in Communicable Disease and

Public Health, September 2003, Volume 6, Number 6


6/61

6

businesses, particularly how the application of HACCP-based food safety managementprocedures can be effective and proportionate in these circumstances. The results havebeen used to develop the UK negotiating strategy. The implementation of food safetymanagement procedures in smaller food businesses has been addressed through thedevelopment of the Safer Food, Better Business and CookSafe models and more

traditional documents across the UK.

3.3 Separate consultation on proposal H3 (now Regulation 854) was undertaken,with interested parties both internal and external, in August 2002. All of the stakeholderswho responded to the original consultation and thereby indicated an interest and,additionally, stakeholders identified as having an interest in the sector specific subjectscovered were contacted and asked for their views. The consultation document was alsoposted on the Food Standards Agency website for wider access. This RegulatoryImpact Assessment has been amended in the light of the consultation.

3.4 The meat industry generally supports a more risk-based approach to reflect

operator responsibility with the aim of reducing costs. An ongoing dialogue has beenestablished with meat industry interests and a stakeholder group has been set up toaddress issues raised by the proposal. UNISON have been the main critics of H3, withconcerns over the proposed use of plant staff in red meat plants taking over certainduties from official meat inspectors. Others consulted made more detailed comments.Officials have met with the Seafish Industry Authority representatives to consider theirconcerns. Those concerns have been reflected in the negotiating strategy.

4. Negotiating Line and Options

4.1 Officials have pursued a negotiating line agreed by the Ministerial Sub-Committeeon European Issues (EP) on the basis of options identified. The UK negotiated forlegislation which would be flexible and pragmatic. It would allow full application ofHACCP principles where appropriate (e.g. large manufacturing enterprises), but wouldalso allow for the development of generic food safety management procedures basedon HACCP principles in other circumstances and particularly in some smallerbusinesses. The Regulations now represent a significant improvement upon the originalproposals. They are more focused on the need to protect public health in a way which iseffective, proportionate and risk-based. The Regulations clearly distinguish theresponsibilities of food business operators from those of the competent authorities

undertaking official controls. The UK has therefore successfully negotiated flexibility inthe HACCP provisions, and for documentation to be proportionate to the nature and sizeof the business.

4.2 A Do Nothing option would mean that the UK would not have contributed to thediscussions on the proposal and have the opportunity to influence on behalf of the UK.The changes associated with making the proposals more practicable and enforceablewould not have been achieved

Changes to the original text made during the course of the negotiations


7/61

7

4.3 The negotiation has seen the texts develop in a number of areas. The changesreflect, to a significant degree, success by the UK in achieving its negotiating objectives.Detailed changes have made the meaning clearer and help to make the eventualapplication more straightforward. In addition, the UK has been successful in attaining anumber of significant changes that will make the Regulations practicable for businesses

and make enforcement more achievable. What will actually be required of businessunder the proposals is explored in Annex A.

4.4 The financial consequences of the changes made to the proposals have beenquantified where possible. As a whole they will have the result of minimising burdensarising from the new legislation for both industry and enforcement agencies. Wherepossible the consequences have been accounted for in the cost information detailed insection 5.

5. Costs and benefits

Business sectors affected

5.1 There are approximately 600,0004 food business establishments in the UnitedKingdom, covering catering, retail, manufacturing and distribution. In addition, there arein the region of 160,000 primary producers, including farms, aquaculture establishmentsand fishing vessels. The majority of the businesses will be affected by the proposals tosome extent, although many will already have procedures in place that comply with therequirements of the proposals, e.g. major manufacturers, major retailers and theirsuppliers. The businesses affected range from low-risk one-person businesses sellinge.g. wrapped confectionery, through to major businesses manufacturing high-riskproducts and employing hundreds of people.

5.2 Regulation 853 would affect, in particular, slaughterhouses, meat cutting plants,cold stores, game handling establishments, meat wrapping and re-packaging plants,farmed game processing facilities, producers and processors of live bivalve molluscs,the fishery product sector and processors of milk and dairy products.

Issues of equity and fairness

5.3 These proposals do not introduce any new questions of equity or fairness.

Benefits

5.4 The most significant benefit from adopting the Regulations as negotiated wouldbe the simplification of hygiene legislation in a way that would lead to its betterapplication and enforcement. Enforcement of hygiene legislation would more fully reflectrisk. Improved understanding and operation of hazard analysis based requirementswould be expected to result in greater public health assurances, reduction in theincidence of food poisoning, and, in turn, greater consumer confidence. Documentationon the controls in place will help food business operators demonstrate to the

4 The figure of 600,000 is based on estimates of registered food businesses gained from returns from local

authorities.


8/61

8

enforcement authorities that controls are effective. At present, the lack of documentationcan make the checking of procedures by enforcement authorities very difficult. Theprecise effect the new requirements would have on the level of food poisoning is difficultto predict or to measure, but work carried out on behalf of the FSA provide information.Work, undertaken by a consultant economist, on IFD (see report at Annex D) in

England and Wales found that the estimated total cost in 2000 was 1,366 million. Thiscomprised the basic costs to the health service, loss of earnings etc. of 164 million,and costs of pain, grief and suffering of 1,202 million. When applied to the UK as awhole these figures indicate costs of 1,534 million per year. Therefore, a reduction inthe incidence of foodborne illness of between 1% and 5% will result in benefits in theregion of 15.3 million to 76.5 million per year as a result of improving andmodernising the conditions under which food is produced to prevent, eliminate oracceptably control pathogen (disease causing microorganism) contamination of foodand the introduction of food safety management procedures based on the application ofHazard Analysis and Critical Control Points (HACCP) principles. This work indicatesthat benefits are likely to build up cumulatively over a number of years (over a period of

10 years in the summary) as both business and enforcement authorities improve theway in which the regulations are applied and checked. Any resulting improvement infood safety management will mean that the overall food hygiene position would beimproved. The disease incidence situation would improve in consequence. An indicativefigure of 3% has been included in the RIA for the purpose of the cost/benefit analysis. Inthe range of consultations to date this figure has not raised any objections. The figure of3% would seem reasonable set against the reduction (in the five foodborne diseasepathogens monitored) of 20% (on the basis of provisional 2003 data) seen in the firsttwo years of the Food Hygiene Campaign, and may be an underestimate.

5.5 A second study5 looked at the concept of willingness to pay by consumers. Itwas based on two earlier studies, and found that consumers are willing to pay apremium for greater assurance that the food they buy has been subject to improvedfood safety procedures (it was assumed that this premium would be in the region of1%). The potential benefits were found to be in the region of 500 to 1000 million peryear. Benefits could be even greater if the risk of food poisoning were reduced to thelowest possible level. However, the benefits identified overlap to such a degree withthose identified at paragraph 4.1 above that they have not been included in thesummary of costs and benefits.

5.6 Benefits would be shared between all the individuals affected; consumers, food

businesses, business generally, the NHS and enforcers. However, these are difficult toquantify in pure monetary terms. Food businesses will benefit through implementationof measures that would be more likely to enable them to avoid the possibleconsequences of a food poisoning incident being attributed to their business. Businessis increasingly aware of the dire consequences of direct litigation, cancellation of ordersand the harm to reputation that can result from association with an outbreak offoodborne illness. In addition, the operation of the new requirements may open upmarkets that would otherwise be closed. This is a result of bringing the law into line withCodex Alimentarius provisions. For example, Saudi Arabia require that dairy productsexported from the UK come from establishments operating a formal HACCP systemwhich they do not necessarily do at the moment.

5 Report by Drew Associates. Project Code B18005 Proposals to Consolidate and Simplify EU Food Hygiene

Legislation. Work to Inform the Preparation of a Regulatory Impact Assessment.


9/61

9

5.7 The study referred to in paragraph 2.11 provides information to suggest thatthere should be other direct benefits from the new requirements to both enforcementagencies and businesses. The study found that businesses in which the manager wastrained in food hygiene and hence were more likely to operate a hazard analysis

system, produced less food samples of unsatisfactory or unacceptable quality. In turn,those businesses were visited less often by the enforcement agencies a clear benefitto both.

5.8 As a result of Regulation 854, direct benefits would result to a small number ofbusinesses in specific sectors. There should be some small savings for smallslaughterhouses due to a slight reduction in official veterinarian presence, from about4.6 million to 4.5 million, if the frequency of inspection is assumed to be reduced from1 official veterinarian hour per day to a possible 3 hours of Meat Hygiene Inspector timeper week plus 1 hour of official veterinarian per quarter. In cold stores the charge toindustry would reduce from 160,000 to zero as cold stores would no longer be required

to have veterinary supervision. Cold stores would, however, be subject to risk-basedaudit as would other non-approved premises and so some of this saving may be offsetto put the necessary procedures in place.

Costs

Compliance costs

5.9 The Regulations do not substantially alter any requirements in respect ofpremises or equipment from the current legislation. Where the existing law requiresfood safety management procedures (hazard analysis) to be implemented, the mainadditional cost to business will be associated with the verification and documentation ofthose procedures, and record keeping to demonstrate that the procedures are followedin practice. The Regulations include a requirement that those responsible for thedevelopment and maintenance of food safety management procedures have receivedadequate training in the application of HACCP principles. These competencies may begained by various means, such as on the job training, prior experience, short courses orself-study of appropriate guidance materials (e.g. Safer Food, Better Business inEngland and CookSafe in Scotland) or more traditional materials issued by localauthorities in Wales.

5.10 Implementation of the hazard analysis requirements of the existing regulations isvariable throughout the UK. Data are limited, but information collected from localauthorities in the context of developing the FSAs HACCP strategy indicates that about20% of food establishments (excluding primary producers) operate a documentedHACCP-based system and a further 45% operate an undocumented one (see TABLE 1below). This equates to approximately 390,000 (of the total 600,000) foodestablishments. An analysis of which costs are administrative and policy is provided inparagraph 11.3

TABLE 1 - HACCP and Hazard Analysis Uptake by Food Business Sector in the UK


10/61

10

Food Industry

Sector

% Establishments

with documented

HACCP

procedures in

place

Establishments

with

documented

HACCP

procedures inplace

% with

hazard

analysis in

place

Establishments

with hazard

analysis in place

Establishments

in sector

Restaurants &

other caterers

19% 72,000 51% 194,000 380,000

Retailers 16% 30,000 42% 78,000 185,000

Manufacturers 59% 11,000 27% 5,000 18,000

Other 27% 5,000 38% 6,000 17,000

Total 20% 120,000 45% 270,000 600,000

N.B. This information was drawn from the results of a questionnaire sent to UK food authorities inSeptember 2001 seeking local information on the number of establishments operating HACCP basedcontrols. The above estimates must be indicative only, as they are more based on local authoritiesperceptions than objective assessments and records.

5.11 A more recent study (see paragraph 2.11) showed that 76% of retail premisesand 59% of catering premises (65% combined) visited had a hazard analysis system inplace. Of those, it found that at least 57% of the retail and at least 36% of catering

premises (43% combined) had a documented system in place.

5.12 The cost elements for compliance (in all sectors other than primary production)are the one-off costs of (a) the 10 hours setting-up time to assimilate the guidance anddevelop food safety management procedures; and, (b) the cost of the hard copy of themodel; and the ongoing costs of (c) the diary per annum; (d) record keeping for 1minute per day for those using the diary for 350 days per annum; (e) record keeping for15 minutes per day for manufacturing for 350 days per annum; (f) record keeping for 15minutes per day in the non-manufacturing sectors for 350 days per annum where thediary is not appropriate. These figures are more fully explained in paragraphs 5.6 to5.10.

TABLE 2a Summary of one-off compliance costs for food businesses (not primaryproducers) N.B. Safer Food, Better Businessand Cooksafeare described in paragraph5.6

Cost Element Number ofEstablishments

Cost perEstablishment

Total Cost( millions)

Adoption of SaferFood, Better

Business(SFBB)

Model

210,000 150 31.5

Purchase of hard 105,000 40 4.2


11/61

11

copy of SFBBmaterials

TABLE 2b Summary of ongoing compliance costs for food businesses (not primary

producers)

Type ofEstablishment and

requirement

Number ofEstablishments

Cost per business Cost( millions)

SFBB Diary 411,510 30 12.3Completion of SFBB

Diary411,510 43.50 17.9

Record keeping inmanufacturing

sector

7,000 656 4.6

Record keeping innon-manufacturingwhere diary is not

appropriate

61,490 656 40.3

Total cost 75.1

5.13 The costs to business of documenting food safety management procedures willdepend on the degree to which establishments are complying with current hazardanalysis requirements. If a business is fully compliant, then it will have identified the

food safety hazards and will have the appropriate controls in place with correctiveactions. For these establishments, documenting current procedures will not be difficultor time-consuming.

Year One One-off Costs

5.14 It is clear that many food establishments are not compliant with the hazardanalysis requirements of the current legislation. These are mainly in the catering andretail sectors. The Agency has re-thought the way in which HACCP-based food safetymanagement procedures can be implemented in small food businesses, and isdeveloping an alternative to the traditional approach. These models (known in Englandas 'Safer Food, Better Business' and Cooksafein Scotland), designed for small cateringbusinesses, would take an establishment from scratch (i.e. making no assumptions onthe degree to which it is compliant with hazard analysis requirements) to full compliancewith the HACCP-based requirements of the forthcoming legislation. The first version isbeing developed for small restaurants. The cost to business is essentially the timetaken to assimilate the guidance and develop food safety management procedures. Onthe basis of very preliminary work on Safer Food, Better Business in small restaurants,it is estimated that, from scratch, an average time of 10 hours would be needed, at acost to the business of 150 based on the cost of a manager's time of 15/hour. This

is, in effect, the training required for businesses to be able to apply the model. Thetesting that is now underway should help to refine this estimate. It is envisaged that the


12/61

12

model will be presented in the form of a CD-ROM or in hard copy. The CD-ROM versionshould be made available free of charge whereas a charge of 40 would be applied tothe hard copy. Whilst detailed costings have not as yet been calculated for theapplication of the CookSafe model in Scotland, guidance materials are being given toexisting premises free of charge through targeted local authority funding. In Wales, local

authorities issue their guidance materials free of charge.

5.15 On the basis of the figures in TABLE 1, 120,000 establishments, across allsectors, have documented HACCP-based procedures in place, and it is assumedtherefore that these establishments would be compliant with the forthcoming legislation.This leaves 270,000 establishments that have hazard analysis in place and 210,000establishments that do not. If all of these 210,000 businesses are assumed to beamenable to an approach based on Safer Food, Better Business, one of the models inoperation across the UK, the initial one-off costs for them would be 31.5m. This takesas a starting point that those establishments would be employing the approach fromscratch. These costs will be refined as work continues on the applicability of this

approach. This assumes that the model can be adapted for use in sectors other thancatering. If we assume that 50% of the 210,000 establishments would require to accessthe model information by hard copy (105,000) they would incur a one-off cost of 40 atotal one-off cost of 4.2 million to industry. As mentioned in paragraph 5.14 there areno one-off costs associated with disseminating the hard copy CookSafe manual atpresent in Scotland or those in Wales.

Year Two and Onward Ongoing Record Keeping Costs

5.16 The on-going costs of record keeping depend upon the nature and size of theestablishment, as the legislation acknowledges. The Safer Food, Better Businessapproach for small restaurants envisages a simple diary in which the business wouldkeep the appropriate records, and (if necessary) a record of any corrective action taken.The time taken for this level of record keeping is very short as it consist of completing aseries of tick boxes. It should take no longer than 1 minute per day, per establishment. Ifwe assume that this form of record keeping will take an establishment 1 minute per dayto complete for 350 days per year, the cost involved amounts to 350 minutes or 5.8hours per year. At an hourly rate for an establishment operative of 7.50, this amountsto 43.50 per year. Multiplied by the number of establishments where this approach isassumed to be appropriate, namely 411,510, this amounts to a total cost of 17.9million per year. The cost of the diary itself is currently assumed to be 30/year. The

review of procedures could take place at the time of a Local Authority inspection. Forlarger establishments, or operations where more record keeping is justified, recordkeeping will take longer. A similar costing exercise has not as yet been carried outusing the CookSafe model.

5.17 The nature of manufacturing is such that more record keeping is likely to benecessary than in catering or retail operations. The 2001 survey (Table 1) indicatedthat about 7,000 food manufacturing establishments in the UK did not have documentedHACCP procedures in place. Assuming that record keeping takes an average of 15minutes a day for food manufacturing establishments, this gives a cost of 7000 x 87.5hours/year x 7.50/hour = 4.6 million/year. Outside of the food manufacturing sector,

the 2001 survey indicated that about 473,000 establishments in the UK did not havedocumented HACCP procedures in place. The Small Business Service estimate that


13/61

13

87% of food businesses comprise 10 people or less. Assuming that the Safer Food,Better Businessapproach is suitable for establishments of this size, then the cost wouldbe the cost of the diary itself 30 x 411,510 = 12.3 million/year. In addition the sameestablishments would have to complete the diary as described in paragraph 5.8 above.For the 13%, or 61,490, of establishments where the diary is not appropriate, record

keeping has been assumed to take about 15 minutes per day. This gives a cost of61,490 x 87.5 hours/year x 7.50/hour = 40.3 million/year. This gives a total annualrecord keeping cost of 17.9m + 4.6m + 12.3m + 40.3m = 75.1m, in addition to theone-off cost of producing documented procedures of 35.7m. As yet specific costsbased on using the CookSafe model are unavailable.

5.18 As Regulation 854 is exclusively limited to the role and duties of the competentauthorities, the effects on business should be relatively small. Any additional costs tobusiness will depend on the frequency of controls applied, who carries them out and theattendance of the operator at those controls. Cost implications should be neutraloverall, but some sectors will win and others lose. The winners will be those who adopt

effective procedures and in turn, gain the confidence of the enforcement authorities,which will result in less frequent inspection. The proposal changes the focus of controlsin meat plants and in some cases changes who will be responsible for carrying out thecontrols. This will have an impact as the presence of official veterinarians and meatinspectors (DARDNI officials in Northern Ireland) are charged to the operator, whereaslocal authority presence is not.

5.19 The cost benefit analysis as it applies to procedures based upon HACCPprinciples is mostly representative of large manufacturing businesses. The EuropeanCommission are presently developing guidance on procedures based on HACCPprinciples under the EU Food Hygiene Regulations which envisage further flexibility forsmall businesses (such as caterers). Discussions are ongoing in the EuropeanCommissions Standing Committee on Food Chain and Animal Health (SCoFCAH) andthe UK is represented in these discussions where the interests of UK stakeholders isbeing taken into account. However, until the Commission guidance is finalised, it will notbe possible to complete the cost benefit analysis with respect to small businesses inparticular. Therefore, a separate RIA for the Commission guidance on HACCP will bedeveloped once the Commission guidance is finalised later in the year. This will analysethe costs and benefits for small businesses based upon the flexibilities introduced.

5.20 A more recent consideration of the likely costs associated with implementingprocedures based upon HACCP principles throughout the UK is set out in the March2005 FSA Board paper regarding HACCP. A copy (including annex 2 of the paper) isattached at Annex G. The FSA Board paper also envisages a more gradual approachto ensuring compliance with the EU Regulations for all businesses and this will alsoneed to be taken into account when further developing the cost benefit analysis.

Impact on Primary Producers

5.21 The rules applying to primary production also cover certain associated operationssuch as the transport, storage and handling of primary products at the place of

production, the transport of live animals and, for certain products, the delivery of primaryproducts from the place of production to an establishment. Primary producers will not


14/61

14

be required to apply HACCP-based procedures. Primary producers will need to followgood practice and manage their operations in such a way that hazards are acceptablycontrolled. In practical terms, the requirements on primary producers amount to fairlybasic hygiene procedures. Primary producers must respect other existing legislation interms of veterinary medicines, plant protection products, feed additives, zoonoses and

disposal of waste. In addition, primary producers will need to keep facilities, vehicles,equipment etc. clean and, as necessary disinfected. They will need to use clean water,ensure staff handling foodstuffs are in good health and trained on health risks, controlpests, take account of any test results and keep some basic records. Stakeholders arebeing consulted on the form the controls will take to ensure they are practicable and canbe addressed in Good Practice Guides to be initiated by industry with support fromother stakeholders. As with other food businesses, primary producers would have to beregistered with Competent Authorities. In practice, the requirements are expected toentail relatively modest change to current practice, and the FSA is in discussion withAgriculture Departments as to how they will be implemented, applied and enforced.

5.22 Research6 conducted on the proposals as issued estimated the total additionalcosts to the farming sector (in meeting the requirements set out in paragraph 5.11above) as approximately 20.7 million per year, an average of 144 per business. Thecosts were calculated on the basis of costs shared between approximately 150,000farm businesses7 in the UK. A range of business types and sizes was considered, butnot the fishing or the game/hunting industries. The costs ranged from 94 for a verysmall beef or sheep farm to 620 per year for a large horticultural producer. Similarcosts are assumed to apply to the c.200 game farms in the UK at a total cost of 40,000per year. However, consultation with other government departments indicates that costswill in fact be de minimis. Since the research was undertaken, certain requirements onprimary producers have been removed (e.g traceability) and hence burdens are likely tobe reduced. Although the Cost benefit Analysis for this RIA assumes an upper cost limitof 20M, costs will in all likelihood range from 1M up to 21 million dependent uponthe nature and size of the business concerned.

5.23 It is estimated that there will be no new costs for the 7,000 UK fishing vesselsunder the new requirements as they are very similar to existing legal requirements withvery little change. There are estimated to be around 3,000 operators in the shore fishingand aquaculture sectors but the specific requirements flowing from H1 on these sectorsare minimal and less than those applying to other primary producers. Costs of around100 per producer may be a reasonable assumption amounting to 300,000 per year.

Total costs for the primary production sector therefore amount to approximately 21million per year.

5.24 As part of the project to implement the legislation in the UK, summary guidancehas be produced (to be issued around November 2005) to inform stakeholders,including primary producers, of the requirements of the new legislation. This should helpin forewarning stakeholders of what is being introduced. In addition, the legislationencourages the development and use of guides to good hygiene practice. Although theuse of this guidance is voluntary under the legislation, industry will be encouraged to

6 Report by ADAS Consulting Ltd. Project B18004 Proposals to Consolidate and Simplify EU Food Hygiene

Legislation. Work to Inform the Preparation of a Regulatory Impact Assessment.7 Approximately 150,000 farm businesses derived from VAT registrations. It does not include fishing, fish farming

or game business numbers.


15/61

15

take forward its development. Industry sectors, such as the National Farmers Union,have already expressed an intention to be involved in driving this forward.

Registration of Food Businesses

5.25 All food businesses will have to be registered with the competent authorities, buta new unified registration system is not being proposed. For most businesses, this willnot impose a new burden as use of existing forms of registration will be allowed wherefeasible. In any case, existing legislation requires premises used as food businesses tobe registered with local authorities if they are not otherwise registered or approved. Thisapplies with only limited exemptions, including most primary producers and premisescontrolled by voluntary organisations or charities. In the case of agricultural primaryproduction, registration systems already in place may be used, such as information fromthe agricultural census, the Integrated Administration and Control System or the newlyintroduced registration of laying hens legislation. It is considered that registration will be

a new requirement in only very minor sectors of primary production, e.g. hand shellfishgatherers and some shore fishermen. Industry are being consulted on this requirementas part of the policy consideration of the national measures required by this legislation.The traceability elements contained in the original proposals have been removed fromthe texts following the introduction of requirements in the General Principles of FoodLaw Regulation. No additional costs, in relation to traceability, will therefore arise fromthis measure.

Impact on Charities and Voluntary Organisations

5.25 Charities and voluntary organisations should already be complying with therequirements of the General Food Hygiene Regulations 1995, which require, in effect,implementation of the first five HACCP principles. These organisations will be affectedby the proposals to some extent as will organisations that give out food, e.g. Shelter andCrisis at Christmas. However additional burdens should not be great. Suchorganisations would need to be registered as food businesses and would have to verifyand record procedures, but many may be doing so at present. The Charity Commissionhas been consulted and commented that it did not foresee the new legislation creatingan unnecessary burden on the charitable sector. A number of charitable organisationswere included in the original consultation, including the National Federation of Womens

Institutes and the Townswomens Guild, but no comments were received from them.Regulation 854 would have no impact on charities and voluntary organisations as itrelates only to the duties of enforcement authorities.

5.26 The Food Standards Agency does not consider that implementing theseRegulations will have any impact on racial equality issues.

6. Consultation with small business: the Small Firms Impact Test

6.1 The Small Business Service and Improving better regulation Unit have beenconsulted about this proposal.


16/61

16

6.2 Current requirements of food hygiene legislation do not in general necessarilyreflect the situation in smaller businesses. These requirements tend to be prescriptiveand reflect the controls necessary in larger business. This has led to attempts to dealwith issues in relation to smaller businesses through the application of derogations. The

approach of this proposal however, by removing prescription, means that rules can beapplied to all business sizes appropriately. Controls will be more reflective of risk andtargeted on critical points, moving away from mechanistic compliance.

6.3 A number of small and medium-sized businesses (SMEs), or their representativeorganisations responded to the consultation. In addition, in conjunction with the SmallBusiness Service (SBS), the FSA are visiting and talking to SMEs in relation to theHACCP strategy, particularly as it impacts on caterers. At the end of March 2002, foursmall retail businesses which sold fresh, chilled and preserved foods were visited.These visits were arranged with the Rural Shops Alliance. All were registered with theLocal Authority (LA), or the LA was aware that they were operating. All received visits

by Environmental Health Officers which they found a useful source of information andadvice. Although the businesses lacked knowledge of HACCP principles, they wereidentifying hazards and taking action to control them. Temperatures were controlled,checked and, in most cases, records kept. The businesses regarded the proposals asreasonable and proportionate, and did not consider that the proposals carried unduecost implications. The most common response was that the new requirements reflectmeasures businesses already undertake as part of normal operations. All accepted thatthe financial consequences of a food poisoning incident being attributed to a businesscould be very serious, and threaten its existence. The businesses encouraged the FSAto provide simple, straightforward and easy to access information. Such information is amajor part of the FSA HACCP strategy independent of these proposals. It is intended tocontinue with further consultation and visits to SMEs in relation to implementation of thelegislation.

6.4 Other concerns expressed by representatives of small businesses can beaccommodated through the appropriate interpretation of small and local in theproposals. Regulation 853 allows for the provision of nationallaw where small quantitiesof primary products and certain types of meat are supplied directly by the food businessto the final consumer or another local retail establishment. This is particularly importantin relation to sales of small quantities of game meat to the final consumer or local retailoutlets.

7. Competition Assessment

7.1 The new legislation will have farm to fork coverage and apply to all sectorsincluding retail, catering, manufacturing and distribution and primary production, some760,000 businesses in total.

7.2 The new legislation will apply equally to all new and existing businesses andmost of the requirements relating to production controls and monitoring are alreadylikely to be used as the industry standard. The new legislation will have the potential toaid business by helping to create a level playing field and possibly driving out

substandard competition. This is particularly true for imported food which will have to beproduced to the same or equivalent standards as that produced within the EU. Whilst


17/61

17

businesses may incur some adjustment costs arising from changes to the hygienerequirements, we do not expect adoption of the proposals in line with the UK negotiatingobjectives to have an adverse effect on competition. Indeed, they should improvecompetitivity. Where costs to business are likely to result, they would be proportionateto the size of business and would not be sufficient to raise concerns for competition. As,

for example, the new requirements would apply to all catering businesses, it would notapply a commercial disadvantage to any particular business. There is no evidence thatthere is likely to be any significant change in market concentration following theintroduction of this legislation.

8. Enforcement and sanctions

8.1 It is very difficult to estimate the precise costs and benefits of the new legislationto enforcement agencies. Local authorities and their representative organisations (LocalAuthorities Coordinators Of Regulatory Services (LACORS), the Chartered Institute of

Environmental Health (CIEH) and the Royal Environmental Health Institute of ScotlandREHIS) were consulted on the proposals. A number provided comments, but noinformation on the costs involved. LACORS did welcome the proposals, but expressedconcern on how HACCP could be applied to smaller businesses. They suggested thatan inflexible application of HACCP would increase costs. However, the new legislationwill simplify and greatly reduce the volume of EU legislation that controls food hygiene,and do much to rectify anomalies that have made enforcement difficult. BecauseHACCP-based procedures lend themselves to audit, and should not require constantsupervision, enforcement resources could be targeted more effectively; e.g. certainenterprises may be identified as low-risk and visited less frequently. There would be abenefit to enforcement authorities from any reduction in food poisoning incidenceleading to fewer post-incident investigations. For these reasons, there may be areduced burden on local authorities in the longer term, although it is not possible to ruleout the possibility that there may be some additional start-up resource implications. Inparticular, there may be costs associated with training some enforcement officers inauditing HACCP based procedures - a cost has been indicated in the summary of 0.2million.

8.2 Regulation 854, in setting down the duties of enforcement authorities creates themain impact in this area. It is estimated that the costs and benefits will be approximatelyneutral in the meat, fishery product, milk and dairy sectors. On meat inspection,

reductions in hours of attendance may not lead to immediate savings because of thelimited scope for deploying staff. For example, plants where attendance will be newlyrequired, may be in different geographical locations than plants where officialveterinarian attendance can be reduced. In addition, the savings resulting from overallreduced attendance are likely to be offset by the requirement for increased training ofstaff contained in the proposal. In the live bivalve mollusc sector it is envisaged that,with the changes to the Regulation negotiated by the UK, implementation costs wouldbe kept to a minimum.

8.3 Through the FSAs strategy for wider implementation of HACCP-basedprocedures, a role is envisaged for local authorities in helping businesses comply.

Guidance and further Agency training will be provided to help enforcers assess theeffectiveness of HACCP-based controls. This work should go a long way to smoothing


18/61

18

the transition in the duties of enforcement authorities necessary to give appropriateeffect to the proposals. Although the HACCP strategy will greatly help, implementationof the modernised requirements is not dependent upon the outcome of the strategy.

8.4 The issue of sanctions is covered by the separate recently agreed regulation on

official feed and food controls. However, the UK will have to apply penalties specific tothese proposals through national implementing legislation which will be the subject of aseparate RIA.

8.5 Regarding primary production specifically, work is still ongoing regardingresponsibilities for enforcement at this level. It is not possible to estimate the costsinvolved until responsibilities in this area are decided.

9. Implementation and Delivery Plan

9.1 Throughout the negotiations on the EU proposals, all stakeholders have been fullyconsulted on the legislation regarding their responsibilities under the new legislation.This has involved FSA public written consultations, meetings and attendance atconferences and other events. The FSA has also produced guidance on therequirements of food business operators under the new legislation based upon theiractivities. Summary guidance has also been produced for small businesses. Guidanceis also being issues to enforcement authorities in the form of a revision to the Code ofPractice and practice guidance under the Food Safety Act. Training on the requirementsof the new legislation for local authorities is also being organised, commencing later thisyear. We are discussing how to communication information about the legislation morewidely for stakeholders.

9.2 Post implementation, we will continue engaging with stakeholders and consider anyfurther training of local authorities require. We will also develop any FSA guidance asappropriate.

10. Post Implementation review

The proposals include a revision clause under which the Commission will report to theEuropean Parliament and the Council on the implementation of the Regulation after fiveyears of its implementation. This is a worthwhile exercise where the lessons of

experience can be learned and, if appropriate, amendments can be proposed. UKstakeholders will be consulted on the review process. The European Commission arealso bringing forward legislation on implementing and transitional measures for the mainEU Regulations. Any further costs and burdens associated with these measures will becovered by a separate RIA later in the year. A separate RIA for the Commissionguidance on HACCP will also be developed once it is finalised later this year.

11. Summary and Recommendation

11.1 The proposals are likely to have some financial implications for most sectors ofthe food chain. As initially assessed, costs to business across all of the sectors affected


19/61

19

(c.760,000 businesses including primary producers) are likely to be in the region of132 million in the first year and 96.1 million per year thereafter. This includes one-offcosts of approximately 35.7 million for establishments to introduce food safetymanagement procedures based on the various UK models. Additional costs toenforcement authorities, in terms of additional training, are likely to amount to

approximately 0.2 million per year.

11.2 The monetary benefits, in basic foodborne disease reduction terms, are thoughtto be in the region of 15 million to 75 million per year assuming that the newrequirements result in a 1% to 5% reduction in food poisoning incidents. Those benefitsare likely to build up over a number of years and will outweigh costs in a 5 year or 6year period in the case of a 3% reduction scenario (See Annex E). The 3% scenariodeveloped in Annex E has been used for indicative purposes in producing the summaryin TABLE 4. TABLE 3 provides information on the major elements of the evidence oncosts and benefits used to produce TABLE 4 in relation to the UK negotiating position.Although it is not possible to claim categorically any particular level of reduction in

foodborne illness to result from the new legislation, the figure has not been contradictedin consultation responses as a reasonable assumption.

TABLE 3 Summary of compliance costs for food businesses

Requirement/cost element Number of businesses affected/costper business

One-offbusinesscosts

Annualbusinesscosts

1.Adoption of Safer Food,Better Business(SFBB) orCookSafe model

210,000 businesses at a cost of 150per business

31.5 m

2. SFBB information hardcopy

105,000 businesses at a cost of 40per business

4.2 m (notapplicablein WalesandScotland)

3. SFBB diary 413,250 businesses at a cost of 30per business

12.3 m

4. Record keeping inmanufacturing sector

7,000 businesses at a cost of 656 perbusiness

4.6 m

5. Record keeping in non-manufacturing sectors wherediary is not appropriate

61,750 businesses at a cost of 656 perbusiness

40.3 m

6. Completion of SFBB diary 413,250 businesses at a cost of 88

per business

17.9 m

7. Costs to the primaryproduction sector

160,000 businesses at an averagecost of 130 per business

21 m

Total costs for600,000 food businesses 35.7m 96.1

*Detailed costings using models other than SFBB have not as yet been calculated

11.3 According to recent Cabinet Office guidelines, requirements/cost element 1, 4, 5and 6 would be considered policy costs. Requirements/cost element 2 and 3 would be

considered administrative costs. The costs for primary production are inclusive of policyand administrative costs.


20/61

20

11.4 The recommendation is to agree the legislation in line with the adopted EURegulations. It would introduce a hazard-based approach at primary production andconsolidate HACCP-based food safety management procedures throughout theremainder of the food chain in a flexible and pragmatic manner.

TABLE 4 - Food Hygiene Legislation Summary of Evidence on Costs and Benefits

Year Cost million

Benefits(3% p.a.)million

1 132 452 96 903 96 1364 96 1815 96 2266 to 10 96 226

Col. 2 - Costs are higher in the first year and lower in subsequent years due to start-upcosts of putting food safety management procedures in place that will not be recurring;Col. 3 - Benefits are calculated on the assumption of a reduction of 3% in indigenousfoodborne illness in the first five years and constant thereafter.

The year one value over 10 year deflated by 3.5% p.a. of the stream of costs is862million and the value of the stream of benefits is 1510 million. Over ten yearsbenefits outweigh the costs by some 75%. The break-even point, when costs are equal

to benefits is after about five or six years. The Net Present Values (NPV) therefore is648 million.

12. Declaration

I have read the regulatory impact assessment and I am satisfied that the benefits justifythe costs.

Signed..

(Date)

Caroline FlintMinister for Public HealthDepartment for Health

Contact Point:Gary TaylorFood Hygiene Implementation DivisionFood Standards Agency125 Kingsway

London WC2B 6NHTel: 020 7276 8939


21/61

21

Email: [email protected]


22/61

22

ANNEX A

PROPOSALS TO SIMPLIFY AND CONSOLIDATE EU FOOD HYGIENE LEGISLATION- Draft instruments concerning 5 linked proposals.

Regulation 852/2004

1. This Regulation applies to the production of all foodstuffs (including products ofanimal origin). It would extend the existing principles embodied in Council Directive93/43/EEC, namely:

the paramount concern to protect human health,

the use of procedures based on HACCP principles (but not necessarily HACCP perse) to identify, control and monitor critical food safety points in food businesses,

the possibility of adopting microbiological criteria and temperature control measuresin accordance with scientifically accepted principles,

the development of good practice guides to aid compliance,

the monitoring of food hygiene by the competent authorities of the Member States,

the obligation on food business operators to ensure that only foodstuffs not harmfulto human health are placed on the market.

2. This is the cornerstone of the package. It applies to all stages of production,processing and distribution of food (including primary production) other than:

primary production for private domestic use

domestic preparation, handling or storage of food for private domestic consumptionand

the direct supply, by the producer, of small quantities of primary products to the finalconsumer or to local retail establishments supplying the final consumer. (This is tobe controlled nationally).

3. The Regulation contains "horizontal" rules which are those which will applyacross all food sectors. The proposal describes the duties of food business operators(as opposed to describing how control is to be exercised by enforcement authorities). Itintroduces for all food sectors, other than for primary production, a requirement for foodsafety management procedures based on HACCP principles. It establishes thevoluntary use of either national or Community good practice guides. These are to bedeveloped by the food business sectors concerned and are intended to assist food

business operators to comply with the general high-level requirements and objectives ofthe regulation. The guides will be able to include more detailed requirements, specific tothe sectors concerned, than would be necessary or appropriate in the simplifiedlegislation.

4. The Regulation establishes the idea that food businesses need to be registeredwith the competent authority so that enforcers know where food businesses are andmay factor them into official control programmes. This Regulation also lays down basichygiene requirements for premises, staff, packaging, storage, transport, and handling offoodstuffs.


23/61

23

5. With regard to primary production, the Regulation does not require theapplication of HACCP procedures at this level. It does however require that primaryproducers control the hazards associated with their operations. As with other foodsectors, good practice guides may need to be produced.

6. The Regulation will require that food imported into the Community complies withsame or equivalent standards. It also contains the capacity for Member States to adaptcertain of the provisions (without compromising the objectives of the Regulation) incertain circumstances, subject to Commission "approval" under comitology.

Regulation 853/2004

7. This Regulation reflects the fact that products of animal origin tend to representthe highest risk, so that additional controls are needed. It lays down specific controlswhich apply additional to those in Regulation 852. They do not (in general) apply at the

level of retail sale, nor do they apply to food containing both products of plant origin andprocessed products of animal origin.

8. In bringing all the existing controls together, it has been possible for theCommission to remove some repetition and inconsistency which existed in the currentlegislation. However, the extent to which further rationalisation and simplification mightbe possible will be dependent on the experience gained with the new legislation.

9. The Regulation will require the approval by enforcement authorities of premiseshandling products of animal origin. Products of animal origin will have to bear anidentification mark displaying information about where the product was produced orhandled. Fresh red meat and game meat will have to bear a health mark, applied underthe supervision of the Official Veterinarian (OV). As with the first proposal, the same, orequivalent, standards are to be applied to imported products.

Regulation 854/2004

10. The majority of this Regulation concerns detailed rules for the conduct of meathygiene controls, although rules are also laid down for controls on live bivalve molluscsand the areas from which they may be gathered, fishery products and raw milk anddairy products. The Regulation also lays down rules for the approval of establishments.

11. The changes proposed to controls on meat hygiene are intended to take accountof the introduction of HACCP-based procedures in slaughterhouses. It is also intendedto take account of the fact that the traditional meat inspection regime is not equipped tocope with the presence of pathogenic micro-organisms which now account for mostmeat-related foodborne disease incidents.

12. The proposed system of meat inspection does not affect current TSE or animalwelfare controls but introduces a number of other changes:

Although ante-mortem inspection will still be carried out by the OV and post-morteminspection will remain his or her responsibility, operators are given clear


24/61

24

responsibility for the hygienic production of meat, with the role of officials changingfrom supervision to audit.

All animals will have to be accompanied to slaughter by chain information suppliedby the farmer. This will contain information relevant to food safety. If this

information is not available the animals will be slaughtered, but their meat will not beallowed into the food chain.

Unnecessary post-mortem inspections for some conditions may not have to becarried out, where area or herd guarantees of disease freedom can be provided.

Post-mortem handling of the carcases and offal will be progressively minimised,following advice from the European Food Safety Authority (EFSA) on procedures forindividual types of animal.

Ante and post-mortem inspection findings of significance for public health or animalhealth and welfare will be required to be included on relevant databases andcommunicated to public and animal health officials as appropriate, as well as to thefarmer of origin and his/her veterinary surgeon.

The strict requirement for the full time presence of an OV is removed allowing OAsto take on more of the OV duties.

Directive 2004/41/EC

13. This measure would repeal the existing EU legislation and amend other relatedlegislation.


25/61

25

Annex B

EXISTING EU FOOD HYGIENE LEGISLATION

Council Directive 64/433/EEC of 26 June 1964, on health conditions for the production and marketing of

fresh meat, as last amended by Directive 95/23/EC.

Council Directive 71/118/EEC of 15 February 1971, on health problems affecting the production andplacing on the market of fresh poultry meat, as last amended by Directive 97/79/EC.

Council Directive 77/96/EEC of 21 December 1976 on the examination for trichinae (trichinella spiralis)upon importation from third countries of fresh meat derived from domestic swine, as last amended byDirective 94/59/EC.

Council Directive 77/99/EEC of 21 December 1976 on health problems affecting the production andmarketing of meat products and certain other products of animal origin, as last amended by Directive97/76/EC.

Commission Directive 89/362EEC of 26 May 1989 on general conditions of hygiene in milk productionholdings.

Council Directive 89/437/EEC of 20 June 1989 on hygiene and health problems affecting the productionand the placing on the market of egg products as last amended by Directive 96/23/EC.

Council Directive 91/492/EEC of 15 July 1991, laying down the health conditions for the production andthe placing on the market of live bivalve molluscs, as last amended by Directive 97/79/EC.

Council Directive 91/493/EEC of 22 July 1991, laying down the health conditions for the production andplacing on the market of fishery products, as last amended by Directive 97/79/EC.

Council Directive 91/495/EEC of 27 November 1990, concerning public health and animal health

problems affecting the production and placing on the market of rabbit meat and farmed game meat, aslast amended by the act of accession of Austria, Finland and Sweden.

Council Directive 92/45/EEC of 16 June 1992 on public health and animal health problems relating to thekilling of wild game and the placing on the market of wild game meat, as last amended by Directive97/79/EC.

Council Directive 92/46/EEC of 16 June 1992, laying down the health rules for the production and placingon the market of raw milk, heat-treated milk and milk-based products, as last amended by Directive96/23/EC.

Council Directive 92/48/EEC of 16 June 1992 laying down the minimum hygiene rules applicable tofishery products caught on board certain vessels in accordance with Article 3(1)(a)(i) of Directive

91/493/EEC.

Council Directive 92/118/EEC laying down animal health and public health requirements governing tradein and imports into the Community of products not subject to the said requirements laid down in specificCommunity rules referred to in Annex A(I) to Directive 89/662/EEC and, as regards pathogens, toDirective 90/445/EEC, as last amended by Directive 97/79/EC.

Council Directive 93/43EEC of 14 June 1993 on the hygiene of foodstuffs.

Council Directive 94/65EC of 14 December 1994 laying down the requirements for the production andplacing on the market of minced meat and meat preparations.


26/61

26

Annex CHazard Analysis and Critical Control Points (HACCP)

Background to HACCP

1. HACCP is a system of food safety management based on the prevention of foodsafety problems. HACCP is internationally accepted by governments and the foodindustry alike as the system of choice in the management of food safety in foodbusinesses. It provides a documented, structured approach to ensuring food safety andplaces a requirement on food businesses to identify, manage and control hazardsinherent in their food handling and production process. It is proportionate and flexibleand offers the best protection to consumers when implemented effectively. In line withmodern thinking on a wide variety of matters, it is a risk-based system. Widerapplication of effective HACCP based controls is considered as key to the FSAachieving its wider food borne disease targets.

2. Increasing uptake of HACCP was confirmed as Government policy whenaccepting the recommendations of the Pennington Report into the 1997 E.coli O157outbreak in Scotland. Indeed, the need to overhaul European hygiene legislation was aspecific recommendation of the Pennington Report that was accepted by Government.In addition, HACCP is promoted by the main international bodies with an interest in thisfield, e.g. the WHO and the Codex Alimentarius Commission. In recent years a clearinternational trend has developed to adopt a HACCP approach to food safety.

3. The FSA has a publicly declared Service Delivery Agreement target for 30 percent of food businesses to be operating documented HACCP based controls by April2004. The target is aimed at complementing and assisting wider Agency action toreduce food-borne disease by 20 per cent by April 2006. The FSA has a strategy inplace to achieve this target.

The Proposal

4. The Regulations will require food business operators to put in place, implementand maintain a permanent procedure, or procedures, based on the HACCP principles.The HACCP principles are set out in paragraph 6 below. The requirement is not for fullHACCP systems. Food businesses will need to operate procedures based on theprinciples. The legislation is structured this way so that it can be applied flexibly in all

food businesses regardless of their type or size. The FSA is looking to provide enforcerswith guidance on how to comply with the new legislation.

Current Status of HACCP and Hazard Analysis in the UK

5. For the vast majority of the businesses affected by the proposals, the applicationof procedures based on HACCP principles is not a new requirement. In most areas offood production the law requires that the main elements of HACCP should be appliedalready. Since the implementation of the General Food Hygiene Directive in 1995, foodbusinesses including retail and catering businesses (by far the biggest two sectors interms of numbers of businesses affected), have been required to analyse and control

hazards on the basis of applying five of the seven HACCP principles. In addition, manyof the sector specific hygiene directives require manufacturers to operate own checks,


27/61

27

based on HACCP principles. What is new in the proposals as they apply to all foodbusinesses is the requirement to verify that the procedures in place actually work.Businesses operating under General Food Hygiene law, and some sector specific law,will also have to keep documentary records of the procedures in place. Regardless ofthe present legal requirements, many businesses that are applying the five principles of

HACCP will actually be keeping documentary records for their own purposes. Theproposals will remove a degree of prescriptive detail contained in the current legislationand so will mean a reduced compliance burden for some sectors of the industry. Forexample, in the case of slaughterhouses, the proposals make no additionalrequirements of operators, but do clarify what is required of all food businesses asopposed to what is specific to slaughterhouses. Paragraphs 5.10 and 5.11 provide anoverview of HACCP uptake by the main sectors. Annex F provides an overview of thecurrent legislative requirement to have hazard analysis procedures in place.

6. The HACCP principles are:

a) identifying any hazards that must be prevented, eliminated or reduced toacceptable levels;

b) identifying the critical control points at the step or steps at which control isessential to prevent or eliminate a hazard or to reduce it to acceptable levels;

c) establishing critical limits at critical control points which separate acceptabilityfrom unacceptability for the prevention, elimination or reduction of identifiedhazards;

d) establishing and implementing effective monitoring procedures at critical controlpoints;

e) establishing corrective actions when monitoring indicates that a critical controlpoint is not under control;

f) establishing procedures, which shall be carried out regularly, to verify that themeasures outlined in subparagraphs (a) to (e) are working effectively; and

g) establishing documents and records commensurate with the nature and size ofthe food business to demonstrate the effective application of the measuresoutlined in subparagraphs (a) to (f).

When any modification is made in the product, process, or any step, food businessoperators shall review the procedure and make the necessary changes to it.

7. There is growing evidence, from around the world, that the effective

implementation of procedures based on HACCP principles can have a real effect inreducing the level of foodborne illness. In the USA, the Food Safety and InspectionService have issued a report (Enhancing Public Health: Strategies for the Future, 2003FSIS Food Safety Vision) that welcomes a 16% reduction in foodborne illness in the last6 years. This is attributed to the implementation of HACCP procedures in all meat andpoultry plants in the USA.


28/61

28

Annex D

THE COST OF INDIGENOUS FOODBORNE DISEASE (England and Wales)

Introduction

The aim of food safety regulations is to ensure the production of safe food and reduce the

incidence of foodborne disease. The benefits of any new food safety regulation are mainly any

consequent reduction in indigenous foodborne illness, i.e. illness due to food consumed within

the country. The economic savings due to the reduction in indigenous foodborne illness therefore

measures the benefits of the new regulation.

This note provides an estimate of the total economic cost of foodborne illness at a baseline year,

the year 2000. Any proportionate reduction in foodborne illness attributed to the new regulations

can then be estimated using this benchmark.

The amount of indigenous foodborne disease

In a recently published paper researchers at PHLS Communicable Disease Surveillance Centre

(CDSC)8

estimate the number of cases of Indigenous Foodborne Disease (IFD) in England and

Wales in 1992, 1995 and 2000. This information is available classified by foodborne pathogen

(16 bacteria, 3 parasites, 3 viruses and those of unknown origin) and for each pathogen there are

estimates of the total number of cases, cases presented to a GP, hospital admissions, hospital bed

days and deaths (data in table1, Appendix 2).

The CDSC estimates are based on data from routinely available surveillance data, special survey

data (including the IID Study discussed below), hospital episode statistics and National Statisticsmortality data. Adjustments to the data were made to reflect available estimates on the

proportion of total disease, by pathogen, confirmed in laboratory tests and included in the

surveillance data. A further adjustment was made to deduct foodborne disease imported through

foreign travel.

For the purpose of costing the effectiveness of any change in UK food safety legislation the

relevant measure is the indigenous foodborne disease level and not all foodborne illness. In

estimating the cost of indigenous foodborne disease the CDSC estimates will be used as a base

for the quantity and outcome of foodborne illness in the year 2000 and these quantities will be

matched by a price vector based on available estimates on the cost of such disease, taking into

account the outcomes of such illness.

The cost of foodborne disease

The cost of illness, including foodborne disease, can be assumed to comprise two main

components: (i) the actual, out of pocket, costs of the illness to individuals, employers and the

NHS and (ii) the additional monetary value to individuals of the pain, grief and suffering due to

the disease. Information on actual costs is based on data collected from individuals and includes

expenses of ill individuals and their carers, lost output and the costs to the NHS. Estimates of the

8 Adak G.K., Long S.M., O'Brien S.J. Trends in Indigenous Foodborne Disease and Deaths, England and Wales -

1992 to 2000 (Gut 2002; 51: 832 - 841).


29/61

29

monetary value individuals attribute to the pain, suffering and grief due to illness are based on

studies of individuals willingness to pay (WTP) to reduce the risk of death or of getting ill.

(i) Actual price/cost of illness

A source of information on the actual cost of all intestinal illness is available from the relativelyrecent Report ofThe Study of Infectious Intestinal Disease in England (IID study)

i. This

comprehensive study includes survey data collected between August 1993 and January 1996

(centred in 1994/5). The study includes estimates of the actual costs of all IID for a long but not

complete list of intestinal diseases, for example Listeria is missing and though the number of

cases of Listeria is small, 194 cases estimated in 2000, the mortality rate is high, 68 deaths in

2000ii. The costs are for all IID, including both foodborne diseases and those transmitted in other

ways. To utilise these estimates in the RIA, an assumption is made that the average cost of

foodborne disease is similar to that of all IID.

The design of the IID Study was complex and aimed to answer a range of questions including

estimates of the total number and proportion in the population suffering from IID, the proportionthat present to GP and the proportion where the infectious organism is identified. Costs of IID

were estimated from samples of individuals and provide details on the financial burdens incurred

by the NHS, individuals and employers.

The IID study collected information on individual for a period of 6 months and does not include

information on long-term consequences of IID. The study does not provide information on cases

of permanent incapacity due to the illness nor does it include any cases of death. Estimates of the

actual costs based on this data are therefore likely to be biased downward.

For the RIA we would ideally want an estimate of the total cost of illness at some base date and a

breakdown of the costs by foodborne organism. Such a breakdown would allow monitoring or

estimating the cost of reducing specific sources of foodborne disease due to the introduction of

the new legislation. However, such detailed estimates are not available. The IID study only

includes details of costs for a few pathogensiii

and it is not possible to estimate the cost of total

IFD by adding up the costs of illness attributed to each of the pathogens. The estimates below

are, by necessity, based on the average cost estimates for all IID for two groups, patients who

visit a GP and patients who do not visit a GP.

The costs in the IID study were centred in 1994/5 and to apply them to estimate the costs of IFD

in the year 2000 the costs are uprated using appropriate price indices.

Estimate of actual cost of IFD, England and Wales 2000

Table 1 in Appendix 1 presents the CDSC estimates of Indigenous Foodborne Disease in 1995

and 2000. The estimated total number of cases of IFD in 2000 was 1,338,772 of these 368,516

visited a GP and 970,256 did not.

For the 368,516 cases who visited a GP the actual cost of illness is based on the GP control

component in the IID Study. This component is a sample of 1652 individuals with intestinal

disease who visited their doctor and is considered to be the more accurate source of information

in the IID Study for this groupiv

.


30/61

30

For the 970,256 individuals who suffered from IFD in 2000 and did not visit their doctor the

only source of information on costs is from the population or community component in the IID

Study. This component is a smaller sample of 397.

Costs in the IID Study were classified into three categories: costs to the NHS including GP,

laboratory and hospital costs, direct personal cost and costs of lost output which were estimatedby lost earnings. For our purpose, of estimating the cost of illness in 2000, each of these

components has to be uprated by a suitable price index from 1994/5, taken as Q4 1994, to mid

2000.

For the NHS cost the price index used is the NHS Composite Inflation Index (see Annex 3 for

information on uprating factors) produced by DOH. This index includes the prices of both

primary and secondary NHS care and is considered to be the most appropriate of available

health care price indices. The direct personal costs borne by the ill person and their carers are

uprated by the RPI index excluding housing costs between Q4 1994 and Q2 2000. Lost earnings

are uprated by the rise in the Average Earnings Index between Q4 1994 and Q2 2000.

The estimated total actual costs in 2000 of those who suffered IFD and visited a doctor are

estimated as 123 million in 2000 prices and for those who did not visit a doctor the total cost

are estimated as 41 million (detailed calculations are in Annex 1). The estimated overall total

actual cost is 164million in 2000. As explained above, the estimate of total actual costs is

based on a study that followed individuals for a period of six months and do not include the cost

of cases of long term illness. The total estimate of actual cost is therefore likely to be biased

downward.

The actual, out of pocket, costs do not include the monetary value of pain, grief and suffering

due to illness, injury and death. Such costs are usually included in Cost/Benefit analysis and

RIAs of government policy, and to these we turn next.

(ii)Monetary value of pain, grief and suffering due to IFD, England and Wales 2000

Monetary value for pain, grief and suffering are included in RIAs produced by Department for

Transport Local Government and the Regions (DTLR) and the Health and Safety Executive

(HSE). Such values are part of the estimates of the cost of road accidents and illness due to

work. The basis for estimates of the cost of pain grief and suffering is the measurement of

individuals willingness to pay (WTP) to reduce the risk of premature death due to road

accidents.

For example

v

, consider a safety improvement expected to reduce the number of premature deathsin a year by one in a population of 100,000. Each persons risk of dying is thus reduced by an

average of 1 in 100,000. Assume people are prepared to pay (on average) 50 extra a year to

effect the safety improvement. For each death prevented there are a 100,000 people willing to

pay 50, or a total of 5 million: the Value of Fatality Prevention (VFP) is 5 million.

There are practical difficulties involved in determining appropriate values and the value used

here is the one formally adopted by DTLR (formerly DETR) and also used, with some

modifications, by HSEvi

. This VFP is based on a major empirical study and was subjected to

public consultation. The final figure chosen by DTLR is towards the bottom end of the

regulatory impact assessment of eu food hygiene legislation

Documents