RPC Bites #18
Welcome to RPC Bites. Our aim in the next 2 minutes is to provide you with a flavour of some key legal, regulatory and commercial developments in the Food & Drink sector over the last fortnight… with the occasional bit of industry gossip thrown in for good measure. Enjoy!!
Access the full edition of RPC Bites here
Quorn warned over carbon footprint reduction claims
On 30 September 2020, the Advertising Standards Authority (ASA) upheld 32 complaints against a TV ad run by Marlow Foods Ltd (trading as 'Quorn'). The ad claimed that 'Quorn Thai Wondergrains', a product launched in 2019, had a beneficial effect on climate change and could help viewers to reduce their carbon footprints. Complainants argued that the claims were insufficiently substantiated and were misleading, in breach of the UK Code of Broadcast Advertising (the BCAP Code).
The ad, which aired in April 2020, included a voiceover which stated “I care about climate change and I love my food. So new Quorn Thai Wondergrains is a step in the right direction because it helps us reduce our carbon footprint and that’s got to be good.” On-screen text read, “Quorn Wonder Grains. Awarded Carbon Reduction Footprint certification by the Carbon Trust for the full life cycle of the product." Read more
Dismay for Subway as Irish Supreme Court rules that its sandwiches do not contain bread
On 29 September 2020, the Irish Supreme Court found that the sugar content of the 'bread' used in Subway sandwiches is so high that it falls outside the legal definition of 'bread', for the purposes of Irish VAT rules.
The judgment is the latest instalment in a long running saga, which began life when Galway-based Subway franchisee, Brookfinders Ltd ("Brookfinders") attempted to claim a refund of taxes paid in certain months of 2004 and 2005. Under the Irish Value-Added Tax Act 1972, bread is defined as a 'staple' food and attracts a 0% VAT rate. For some time now, Brookfinders has therefore argued that VAT should not have been levied on its heated sandwiches, on the basis that they contain bread. Read more
Farming unions push for milk pricing reform
The dairy sector has long been grappling with how best to price milk contracts. Since 2012, around 85% of British milk producers have signed up to the Dairy Contracts Voluntary Code of Practice (DCVCP). The DCVCP requires producers to agree either: (i) a price for the duration of the contract; or (ii) a discretionary pricing mechanism, which provides for at least 30 days' written notice in advance of any price reductions.
As far back as 2016, the Department for Environment, Food & Rural Affairs (Defra) found "evidence of poor contractual relations in the dairy industry" and in 2019, the then-Minister for Agriculture, George Eustice, was quoted as saying that the DCVCP "has not worked", due to the continued imposition of opaque pricing structures by certain buyers, on producers. The fluctuations in demand for milk brought about by the COVID-19 pandemic have brought these challenges to the fore for producers. In response to this, Defra launched a further consultation, which closed on 15 September 2020. Read more
Aldi looks to further its already notable growth
At the end of last month, Aldi announced plans to invest £1.3bn in expansion - opening 100 new stores, creating 4,000 jobs and renovating a number of existing stores by the end of 2021. The statement released on its website (available here) refers to Aldi's long-term goal of operating 1,200 stores in the UK, by 2025. The announcement comes hot on the heels of Aldi's recent financial success, having achieved an 8.3% year on year increase in turnover for FYE December 2019. Read more
Tesco pledges a 300% increase in sales of plant-based meat alternatives
On 29 September 2020, Tesco announced that it has committed to a 300% increase in the sale of plant-based meat alternatives by 2025. With costs often cited as a barrier to the success of sustainable food products, Tesco has detailed plans to achieve its target by increasing the affordability and availability of plant-based foodstuffs. The supermarket will also work to improve the visibility of plant-based products by ensuring that it offers a meat alternative for every meat product sold. As part of its pledge, Tesco has also promised transparency regarding progress, publishing the sales of plant-based proteins as a percentage of overall protein sales each year. Read more