Select Committee on Environment, Food and Rural Affairs Appendices to the Minutes of Evidence


Memorandum submitted by the British Retail Consortium (G1)


  The British Retail Consortium (BRC) represents the whole range of retailers including large multiples, department stores and independent shops, selling a wide selection of products through centre of town, out of town, rural and virtual stores.

  In December 2001, the retail sector employed some 2.8 million people[1] and retail sales were £221 billion 2001[2]. Grocery retailing is equally significant in macro economic terms and was valued in 2001 at £99.8 billion[3].

  The spectrum of government departments, non-departmental public bodies and directorate generals of the European Commission the policies of which impact on the retail sector is considerable. BRC therefore welcomed the change in structure which amalgamated environment, food and farming policy as in principle, this promises better opportunities for "joined up" Government and in time a better understanding of the impact of proposals on the retail sector.

  We also welcomed the importance placed on the promotion of a competitive and integrated food supply chain which is responsive to the needs of consumers. UK grocery retailing relies heavily on the domestic supply base and, where possible prefers, to source from within the UK. However our primary focus must be to meet the needs of the British consumer and the importance of the global supply base must be recognised in this respect. While retailers are willing to work together and with other food chain partners on non-competitive food chain issues, food retailers are instinctively competitive. To survive in the market they must provide real value for money to the consumer and to respond faithfully to his or her changing demands as a primary and overriding objective.

  It is difficult to comment definitively on DEFRA's performance after only 12 months of operation, particularly given the unforeseen consequences of the Foot and Mouth Disease outbreak which has been dominant over the past year.

  We can however offer the following comments and hope that they will be useful in the Committee's Inquiry.

Is the vision set out by the Secretary of State appropriate and what progress has been made towards that vision?

  The BRC supports the aims and objectives of the new Department and on balance believes it has a sound appreciation of the importance of preserving economic viability while pursuing environmental sustainability goals.


  In May 1999 Government published its strategy for a UK sustainable development programme entitled "A better Quality of Life, a Strategy for Sustainable Development in the UK". This called for concerted action by business sectors, encouraging trade associations to develop sectoral sustainability strategies. The retail sector was one of the first to publish a strategy, joining the Sustainability Pioneers Group with likeminded trade associations committed to developing sectoral sustainability strategies. BRC is currently investigating the extension of its retail sustainability strategy to cover food as part of its response to the Curry Report.[4]

  However, retailers feel that there have been times where the important partnership between industry and Government has not been fully exploited. Closer involvement with the retail sector could have provided important early warning signs during negotiations on the Ozone Depleting Substances Regulations that would have highlighted problems with implementation. Had industry concerns been acknowledged the resulting fridge mountain may have been avoided. The DTI retail sponsor function played no role in helping to make the retail case which leads us to question Government's ability to think across departments and again to suggest that a greater examination and definition of the sponsorship role takes place.[5]


  Much of food retail's relationship with DEFRA has been dominated by the outbreak of the foot and mouth disease in the UK. FMD created significant operational problems for the food retail sector, not least in distributing food to Northern Ireland. If we have one criticism to make of the Department it is that it tended to view the crisis solely as an animal health issue and not one which also had the potential to undermine consumer confidence in food safety and to disrupt the supply of food to the consumer.

  The BRC also welcomes the increasing Government recognition of food retail as equal partner in an integrated food chain. We welcome the recent enhancements to the Food Industry Division and in particular the creation of a special responsibility for food retailing. While we are optimistic that the division will help ensure that the concerns of food retail are heard across Government, we note that at current staffing levels this will be an ambitious task. As an interim suggestion, we would welcome the introduction of a more formal programme of secondments between Government and food retailing to ensure that officials are given the opportunity to witness first hand the practical impact of policy making. The BRC would be happy to co- ordinate such a programme. Certainly, in crisis situations, it is important that DEFRA look for the experts in issues to help them, even if they come from industry. It is also important that the communication channels for issues are clear. During FMD for example it was difficult to get through to key staff. For food retail it is important to have queries dealt with so we are in a position to reassure customers.

  As regards the role of DEFRA as the food retail sponsor, we believe that this area would benefit further definition to promote a clear mutual understanding between food retailing and Government.


  BRC has had little contact with the Department during the development of the rural agenda. This is regrettable given the potential for retail-led regeneration in rural areas. We look forward to developing a closer relationship with the department in this area in the coming year. We believe that the option of moving responsibility for rural development from DEFRA to the Department for Local Government and the Regions may have some merits. It could then be considered alongside the strategy for the regeneration of urban areas.

Is the Department engineered to deliver its objectives?


  We have mixed views about effectiveness of the DEFRA structure. In principle the amalgamation of farming, food and environmental policy should create opportunities for joined up Government. However in reality, on the environment side we feel that in recent negotiations the department has displayed a lack of understanding of the practical impact of proposals on retail. Industry has already expressed concerns over the possible implications of both the Landfill and Waste Electronic Equipment Directives. While the transition of European policy has been well tracked by officials, the lack of understanding of industry impact and practical measures required for implementation has once again been disappointing.


  For food retailers the biggest challenge of recent and future times is to respond positively to the recommendations of the Curry report. The Committee should be aware however of overlaps in policy responsibility between Government bodies which will have a bearing on our response. For example the Food Standards Agency is currently working on consumer expectations of farm assurance schemes which we will need to take into account. We raise this, as in the past, we feel that early cross Government working between DEFRA and FSA could have improved the way issues have been dealt with. For example, earlier involvement of the Food Standards Agency during the FMD outbreak might have created a greater awareness among officials that FMD had the potential to undermine consumer confidence in food safety and was not simply an animal health issue. Nutrition is another example of an area where DOH, DEFRA and FSA have a stake. In handling all these issues it is important that the sector not only sees joined up Government, but also clarity of response.

  Finally on the question of structure we would underline the importance of policy decisions driven in England being co-ordinated as far as possible with the devolved administrations of Scotland, Wales and Northern Ireland. Part of the success UK retailing can be attributed to its centralised/national approach to business which has afforded new efficiencies and economies of scale. These economies can be undermined if opportunities for synergy between territories are overlooked.

May 2002

1   Labour Market Trends, National Statistics. Back

2   SDM28 Retail Sales, National Statistics. Back

3   IGD. Back

4   Towards Retail Sustainability-Protecting our Environment for the future-BRC. Back

5   The pioneers group is a joint initiative from the Sustainable Development Commission (SDC), DTI and DEFRA providing a forum for the exchange of best practice amongst around 20 organisations. Back

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