Select Committee on European Scrutiny Second Report


WELFARE OF LAYING HENS: COMPULSORY LABELLING OF EGGS


(21587)
11244/00
COM(00) 522

Draft Council Regulation amending Regulation (EEC) No. 1907/90 on certain marketing standards for eggs.


Legal base: Article 2(2) of Council Regulation (EEC) No. 2771/75; qualified majority voting
Department: Agriculture, Fisheries and Food
Basis of consideration: Minister's letter of 18 December 2000
Previous consideration: HC 23-xxix (1999-2000), paragraph 19 (15 November 2000)
Discussed in Council: 19-20 December 2000
Committee's assessment: Politically important
Committee's decision: Cleared, but see paragraph 8.12 below

Background

  8.1  In 1998 and 1999, the Council considered Commission proposals on the welfare of laying hens[21]. As we noted in our Report of 13 May 1998, the Commission had said that, in addition to the measure it was putting forward, it would subsequently be proposing the compulsory labelling of eggs, including the method of rearing used. When the welfare measure was adopted in July 1999, the Council asked the Commission to fulfil by 1 January 2002 its earlier undertaking on labelling.

  8.2  The present proposal is in response to that request, and its main effect would be to introduce, as from 1 January 2001, a requirement that the method of production for Class A fresh eggs should be indicated both on the eggs themselves and on the packs. With the exception of organic production (whose labelling is the subject of separate Community regulations), this condition would apply to all eggs sold in the Community other than at the place of production. It is also intended to apply irrespective of whether the eggs were produced within the Community or in Third Countries. However, where the Community considers that the labelling procedures in force in the exporting country are equivalent to those in the Member States, the application of the indications proposed would seem to be permissive, rather than mandatory; and, where the labelling procedures are not equivalent to those within the Community, the indication of farming method could be replaced by one or other of the indications "farming method not specified" or "origin: non-EC", or by the country of origin.

  8.3  In her Explanatory Memorandum of 12 October 2000, the Minister of State at the Ministry of Agriculture, Fisheries and Food (the Rt. Hon. Joyce Quin) said that the Government was strongly in favour of compulsory labelling of eggs with their system of production, but that the proposal to stamp eggs on shell was less welcome. She maintained that, provided adequate traceability systems were in place, there was very little justification for repeating the same information contained on the pack. The Minister also pointed out that some 70% of UK egg production is already stamped under the industry-run Lion Code scheme with a best-before date, which also requires an indication of alternative system production methods (which we understand covers free range and barn production, but not that in cages). She said that the new requirement would, therefore, place on existing Lion Code members the additional burden of stamping cage production, whilst non-Lion Code producers, particularly small and medium-sized enterprises, would struggle with the capital outlay required to install printing equipment. In view of this, she considered that a longer lead-in period than that proposed would be needed.

  8.4  As regards eggs imported into the Community, she said that the proposed indicators would assist consumers to differentiate between home-produced and non-EC eggs. However, whilst she considered this to be a "welcome" development in terms of fresh shell eggs sold at retail, she suggested that the industry and welfare campaigners will oppose a lesser requirement for eggs imported from certain Third Countries.

  8.5  Finally, the Minister pointed out that, so far as both home-produced and imported eggs are concerned, information differentiating the system of production will not be available on egg products or to consumers of eggs eaten outside the home. However, she suggested that, while such information would be desirable, it "could appear disproportionate" to industry to impose the full range of egg marketing regulations onto egg products, which she said are already covered by general food labelling requirements.

  8.6  More generally, the Minister said that a consultation exercise on the proposal was currently under way, and that a Regulatory Impact Assessment would be submitted once this was complete. In view of this, we indicated in our Report of 15 November 2000 that we would reserve judgement on this proposal until we had seen that Assessment. In the meantime, we commented that, although we appreciated the difficulty of explaining a complex and technical area such as this, we had found it difficult to form a clear impression of exactly what was proposed. Consequently, when the Minister provided her Assessment, we said we would find it helpful if she could set out both for eggs themselves and for their packaging precisely what the present Community Regulations require; the arrangements under the Lion Code scheme; what would be required of Community producers in future were the Commission's proposal to be adopted; and what this proposal would require as regards imports on the one hand from Third Countries which have labelling procedures equivalent to those of the Member States and, on the other hand, from those which do not.

Minister's letter of 18 December 2000

  8.7  In her letter of 18 December 2000, the Minister says that the UK — with "significant" support from other Member States — has pressed hard for stronger provisions relating to Third Country production, but that the Council Legal Services have advised that the current text goes as far as is compatible with WTO rules. However, she suggests that the implications for the UK market may not be great, in that shelf-life requirements make it unlikely that consumers here will see Third Country eggs in supermarkets. Where Third Country production is involved, the country of origin will continue to be required.

  8.8  As regards our request for information on labelling, the Minister says that much is left to detailed implementation rules which will follow through Management Committee procedure, but that:

  

—  currently the stamping of eggs and the labelling of packs is allowed on a voluntary basis throughout the Community;

  

—  the industry-run voluntary "Lion code" requires eggs sold as free range, barn or perchery to be stamped and labelled as such (although legally they can still be marketed as Class A eggs without any reference to the method of production): non-UK eggs are not currently covered by the scheme;

  

—  under the current proposal, all Class A eggs sold at retail would be required to be stamped with the method of production or a producer code which also informs the consumer of the method, and packs would have to be labelled with the method of production: this would for the first time include a compulsory indicator for caged eggs; and

  

—  all Third Country eggs to be sold as Class A at retail are expected also to have to be stamped and labelled: those from systems recognised as being the same as Community systems will be able to use the same EC terms or "farming system not known", and would have to show the country of origin.

  8.9  The Minister has also enclosed with her letter a Regulatory Impact Assessment. This suggests that the compulsory labelling of packs will only impact on those packing stations supplying the retail trade which do not already include the method of production on labelling, but that in practice all alternative system packers label their packaging as this ensures they can obtain a premium. Cage eggs supplied other than to the major retailers will require extra information on packs. She says that compulsory stamping of eggs will affect businesses according to whether stamping is to take place on the farm or at the packing station. In the latter case, the main burden will fall to non-Lion code members, whereas in the former case, all egg producers (other than those selling at the farm gate or to local markets) will be affected. However, she adds that the Commission has stated that stamping will be allowed at packing station level, provided traceability systems between producer and packer are in place. She puts the one-off capital costs involved (which would fall on 1641 non-Lion packers, or up to 26,500 egg producers) at around £5,000, with annual labour costs in excess of £10,000, equivalent to about 1p per dozen eggs, depending on throughput.

  8.10  Finally, the Minister says in her letter that this subject was likely to be before the Agriculture Council on 19-20 December 2000, and that it was the Government's intention to agree to its adoption. In part, this was because neither the UK, nor the other opposing Member States, felt able to pursue the "inadequacies" of the Third Country labelling provisions since anything beyond the proposal could lead to a breach of WTO requirements. In addition, she says that, in response to concerns about the cost and burden on small producers, the Presidency had proposed a long lead-in time, until 1 January 2004, which gives time to prepare industry for these changes. This, together with the Commission statement (for which the UK had pressed) that on-egg stamping would be allowed at the packing station rather than on farm, made the proposal as a whole more acceptable. Consequently, if (as expected) it were to be presented to the Council, the UK would accept it, in order to retain the compulsory labelling provision, which it fully supports.

  8.11  We have since learned that the proposal was adopted.

Conclusion

  8.12  We are grateful to the Minister for the answers she has given to our earlier questions, but we are extremely concerned that she should have agreed to this proposal being adopted at the Council on 19-20 December whilst the scrutiny reserve was still in place. Whilst we recognise that there can be circumstances where such an outcome is difficult to avoid, we do not accept that this was the case in this instance. In particular, we raised our questions on 15 November 2000, thus giving the Minister over a month in which to respond before the Council in question. We therefore find it deplorable that the points were not dealt with in time to allow the proper application of the scrutiny process, to which the House rightly attaches considerable importance.


21  (18999) 6985/98: see HC 155-xxviii (1997-98), paragraph 3 (13 May 1998); HC 34-vi (1998-99), paragraph 2 (20 January 1999); and HC 34-xii (1998-99), paragraph 1 (10 March 1999); and (20173) 8411/99 and (20233) 8624/99: see HC 34-xxiv (1998-99), paragraph 10 (30 June 1999). Back


 
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