RPC Bites

RPC Bites #28 - Northern Ireland Protocol breakthrough extended, the future of Easter eggs and an environmentally friendly beer partnership

01 April 2021. Published by Ciara Cullen, Partner and Ben Mark, Partner

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.

A win for supermarkets as GB­NI grace periods extended

In Issue 23 of RPC Bites, we reported on the Brexit breakthrough that was the Northern Ireland Protocol. Under the Protocol, 'authorised' traders exporting from the UK to Northern Ireland were granted a 3­month grace period to comply with certification requirements for products of animal origin, composite products and plant products. A similar 6­month grace period was granted for chilled meat products.

On 3 March 2021, Brandon Lewis, Secretary of State for Northern Ireland confirmed that these grace periods will be extended to 1 October 2021, in order to "support the effective flow of goods between Great Britain and Northern Ireland." From this date, certification requirements will be introduced in 4 phases:

  • Phase 1 ­ Export Health Certificates (EHC) will be necessary for fresh meat products;
  • Phase 2 ­ EHCs will be required for dairy products and additional certificates for plants, seeds and wine;
  • Phase 3 ­ the introduction of phytosanitary certificates for fruit and vegetables and EHCs for pet food; and
  • Phase 4 ­ all remaining certification to be introduced, including for ambient and composite products.

Seemingly, this extension will apply to the composite food products that may lose their exempt status as discussed in Issue 27 of RPC Bites. However, further clarity is needed to confirm the position.

As expected, the news has been well­received by supermarkets but concerns that the extension unfairly prioritises these stores and their suppliers over hospitality supply chains have been raised.

The EU response has not been so enthusiastic. On 15 March 2021, the European Commission commenced formal legal action against the UK for allegedly breaching the substantive provisions of the Protocol and good faith obligations under the UK­EU Withdrawal Agreement. The UK has a month to respond before the EU takes stock and considers its next steps. Read more...

Is the future of Easter eggs online?

The high street is no stranger to evolution and as we pass our one­year in lockdown anniversary, further changes may be on the horizon for specialist high street food names.

Last month, via a statement on its website (here), popular British chocolatier, Thorntons announced the closure of its retail store portfolio. In a move to adapt to changing consumer habits and to combat the disruption of intermittent Covid­19 restrictions, the company will focus on growing its online presence whilst continuing to retail in supermarkets and with its high street franchise partners.

The road has been far from smooth for chocolatiers on the high street who have already had to innovate and flex to consumer demand through the opening of hybrid shops cum cafes. However, in the wake of Covid­19, with the pull of e­commerce stronger than ever, this no longer seems enough for the luxury chocolate space. Read more...

Jump on it! Mondelez acquires Grenade

An investigation by the European Commission for price fixing, as reported in Issue 25 of RPC Bites, doesn't seem to have phased Mondelez International. The company is now set to acquire a significant majority interest in sports nutrition front runner, Grenade.

The acquisition will see Mondelez diversify into the wellbeing space and with Grenade's 'Carb Killa' bars having been the best­selling product in the high protein bar section since 2016, the attraction is clear to see. Mondelez will pivot its traditional snacking focus towards the performance nutrition sector, which has seen significant growth in recent years. The confectionary giant will likely capitalise on Grenade's strong position in the e­commerce market. Grenade sells 25% of its products through online channels and as worldwide lockdowns have caused an exponential rise in online sales, Mondelez's strategic acquisition seems to have been perfectly timed.

For Grenade, the backing of Mondelez could see the home grown brand created by husband and wife duo, Alan and Juliet Barratt with a humble budget of just $700 dollars, become a global leader in sports nutrition. The Barratts will continue to run Grenade from its UK headquarters, whilst retaining a minority equity interest as Mondelez promises to "maintain the authenticity of the brand" whilst injecting "resources, support and international scale". Read more...

Environmentally friendly beer? Sign me up!

A partnership between Brewdog and a range of craft brewers (so­called 'Friends of Brewdog') will see customers receive what is being heralded as the world's first carbon­negative beer subscription box. For each box shipped, Brewdog will offset 2.5kg of CO2, plus every beer in the box will be brewed at Brewdog's carbon neutral Ellon premises.

With each box containing eight beers, half of which are Brewdog own brands and the other half guest beers, the partnership is designed to expose customers not only to a selection of Brewdog's products, but to a diverse offering of breweries and types of beer. The first box will be free for customers, so for those looking for an environmentally conscious tipple, they're perfectly entitled to try before they buy.

There is no doubt that Brewdog has established itself as an environment­first company that has ESG values at its core. Readers will remember from Issue 22 of RPC Bites that Brewdog got into trouble with the ASA for proclaiming that it was carbon­negative. The objectionable advert read, "F**K YOU CO2. BREWDOG BEER IS NOW CARBON NEGATIVE". Although Brewdog receives no points for subtlety, it received top marks in gaining B Corp certification this February. B Corp status means that Brewdog is verified as having the highest standards of social and environmental performance, transparency and accountability. The revolutionary brewer's B Impact Report can be found here. Read more...

Supreme Court loss for Asda over equal pay claims

Asda has lost one part of a gargantuan legal claim brought against it by over 44,000 individual claimants over the right to equal pay. The longstanding litigation centres around the battle by Asda store staff, to be paid the same as Asda warehouse staff.

Equal pay claims are three­pronged, addressing each of the following fundamental questions in stages:

  1. Are the jobs comparable?
  2. If so, are they of equal value?
  3. If they are, is there are a reason why the roles should not be paid equally?

Back in 2016, an employment tribunal found that the jobs of store staff and warehouse staff were comparable. The Court of Appeal concluded likewise in 2019. Asda subsequently took the question to the Supreme Court, which last week ruled in the same way as the two lower courts. The decision means that lower­paid store staff (who are majority female), can indeed compare themselves with higher paid warehouse staff (who are majority male).

The next stage of the litigation will consider the question of whether the jobs of store and warehouse staff are of 'equal value'. Whilst this is by no means the end of the road for the parties, the Supreme Court's decision on the first limb of the claim is being described as a 'watershed' moment, which is set to have a ripple effect across the retail sector. Read more...

Low and no alcohol drinks ­ the ASA position

Following the boom in low and no alcohol sales over recent years and the increasing number of entrants into the market, the ASA has published a helpful summary of the rules in relation to the marketing of such drinks.

The ASA reminds readers that the CAP Code on Alcohol (the Code) applies not only to the advertising of alcoholic drinks (which the Code defines as a drink containing more than 0.5% alcohol by volume (ABV)), but also to the advertising of drinks which have the effect of promoting alcoholic drinks such as mixers.

It also highlights that descriptors such as 'alcohol­free' and 'low­alcohol' are subject to the official UK guidance on low­alcohol descriptors which can be found here. Under this guidance, 'alcohol­free' refers to drinks which have had the alcohol extracted from them to contain no more than 0.05% ABV. As such, the ASA warns of using the term to mislead consumers into thinking that a product does not contain any alcohol whatsoever and therefore recommends that ads for alcohol­free products also contain a reference to the product's exact ABV.

The temptation may be to market any drink containing less than the traditional ABV of that kind of drinks as 'low­alcohol'. However, the UK guidance defines 'low­alcohol' drinks as those containing less than 1.2% ABV. Accordingly, the ASA reminds readers that the CAP Code prohibits drinks which are stronger than 1.2% ABV from being advertised as 'low­alcohol', even if they have a lower ABV than the average drink of the same type.

Finally, tackling the naming of drinks, the ASA points out that the CAP Code prohibits advertisers from implying that a product may be legally sold if that is not the case. In other words, if a low/no alcohol drink is named after its alcoholic counterpart without meeting the criteria to be legally sold under that name, the advertising of that drink could amount to a breach of the CAP Code. Read more...