FULL REGULATORY IMPACT ASSESSMENT CONSOLIDATION OF EU FOOD HYGIENE LEGISLATION CONTENTS PAGE Section 1 2 3 4 5 6 7 8 9 10 11 12 Timetable and title of legislation

Purpose and intended effect of the measure Consultation Negotiating Line and options Costs and benefits Consultation with Small Business Competition Assessment Enforcement and Sanctions Implementation and Delivery plan Post-Implementation Review Summary and Recommendation Declaration Pages 2 2-5 5-6 6-7 7-15 15-16 16 16-17 17-18 18 18-20 20

Annexes A B C D E F The proposals Existing EU Food Hygiene Legislation Hazard Analysis and Critical Control Points (HACCP) The Cost of Indigenous Foodborne Disease Balance of Costs and Benefits Current Legislative Requirements to have a HACCP or Hazard Analysis System in Place by Sector in the UK March 2005 HACCP Board paper 21-23 24 25-26 27-36 37-39 40

41-58

1.

Timetable and title of proposals

1.1 The instrument issued by the European Commission in June 2000 contained five linked proposals covering food hygiene requirements in the European Union. The proposals were presented by the European Commission to the Agriculture Council on 17th July 2000. Common Position on First Reading on the remaining four proposals was reached at the Environment Council on 27 October 2003. The package achieved second reading in the European Parliament on 30 March 2004. The proposals cleared UK Parliamentary Scrutiny. On 29 April 2004, the new EU food hygiene legislation was adopted, 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 2004 on the hygiene of foodstuffs. Regulation 853/2004 of the European Parliament and of the Council of 29 April 2004 laying down specific hygiene rules for food of animal origin. Regulation 854/2004 of the European Parliament and of the Council of 29 April 2004 laying down specific hygiene rules for the organisation of official controls on products of animal origin intended for human consumption. Directive 2004/41/EC of the European Parliament and of the Council of 29 April 2004 repealing certain Directives concerning food hygiene and health conditions for the production and placing on the market of certain products of animal origin intended for human consumption, and amending Directives 89/662/EEC and 91/67/EEC and Council Decision 95/408/EC.

1.2 The fourth proposal (now adopted as Directive 2002/99/EC), relating to animal health rules, is the responsibility of Defra and is not the subject of this RIA. Details of the 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 optimise public health protection by improving and modernising the existing EU legislation. A list of the current legislation to be replaced by the Regulations is at Annex B. Legislation needs to establish the conditions under which food is produced to prevent, eliminate or acceptably control pathogen (disease causing microorganism) contamination of food. The Regulations maintain, and set out more clearly, the duty of Food Business Operators to produce food safely a requirement that is contained in current legislation and is underpinned in General Food Law1. More risk based and flexible procedures will be 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.

This would be facilitated by the introduction of food safety management procedures based on the application of Hazard Analysis and Critical Control Points (HACCP) principles. The application of HACCP-based principles in food manufacturing and preparation is widely regarded throughout the EU and in most developed countries as crucial 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 at Annex C.) The Regulations introduce a farm to fork" approach to food safety, by including primary production in food hygiene legislation for the first time in the majority of cases. Devolution 2.2 The Regulations are directly applicable throughout the UK. Separate national legislation will be introduced for each of the four countries of the UK to give effect to the EU Regulations and provide enforcement powers. The background 2.3 The need for food hygiene legislation is generated by the risk to consumers of illness or death from pathogenic microorganisms, which can occur in or crosscontaminate food at all stages from production to consumption. Current food hygiene requirements in the European Union are contained in a raft of legislation, the earliest of which is 40 years old. The European Commission introduced, in June 2000, proposals to update and simplify current legislation. The adopted EU Regulations hold implications for 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 competent authorities. Regulation 854 would replace current legislation relating to the organisation of official controls on products of animal origin intended for human consumption. It would 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 of operators procedures based on HACCP principles, particularly in the case of meat plants. As such, the Regulation holds implications for the Meat Hygiene Service, Local Authorities, the Dairy Hygiene Inspectorate and possibly others, depending on how national rules are determined. Directive 2004/41/EC is concerned with the repeal of existing 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 and catering businesses are covered by the general food hygiene directive (93/43) which requires businesses to comply with requirements corresponding to the first five HACCP principles, which identify and control hazards. Producers of products of animal origin are covered by specific directives, most of which require the identification of critical points and control of those hazards (involving in most cases highly prescriptive detail, e.g.
The figure of 760,000 includes 160,000 businesses at primary production level (farms, fishing vessels etc) and 600,000 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.
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tiling of walls to 2 metres height). In some cases (producers of meat, fish and milk products), own checks additionally require verification and recording of procedures in place, 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 covering national rules to give effect to the EU Regulations. 2.7 A new Feed Hygiene Regulation has been adopted and is closely related Food Hygiene legislation. A separate RIA has been prepared on the Feed Hygiene legislation that 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 of duplication 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 by bringing together the requirements into three regulations rather than 16 directives and updating much of the information the older directives contained. It is clear also that many of the businesses, particularly in the catering sector, have little knowledge of the hazards inherent in the operations they undertake, or how to control them. By ensuring that businesses identify hazards and control them in an appropriate manner, the new approach will seek to address this issue. Rationale for government intervention 2.9 The background against which the new Regulations should be viewed is the incidence of foodborne disease. A major study found that in 2000, it is estimated that the total number of cases of foodborne disease (referred to hereafter as Indigenous Foodborne Disease (IFD)) in England and Wales was 1,338,772 of which, 368,516 visited 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 on evidence from laboratory reports for 2002, the incidence of foodborne disease in Scotland 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.). Evidence on 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 cases in the home are thought to originate from food containing pathogenic microorganisms when purchased. It is possible that a small proportion of cases reported may be due to organisms present in the domestic environment, but it is not possible or desirable to eliminate these cases from consideration here. The package of EU hygiene Regulations aims 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 foodborne outbreaks of Infectious Intestinal Disease (IFD) reported by vehicle of infection between 1992 and 1999, poultry accounted for 22% and red meat for 19% of cases. In the 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, but it is likely to be less than 10% of all cases. However, given the seriousness of the

pathogens that may be involved (e.g. E.coli O157, Listeria and Salmonella) it is important that appropriate controls are put in place. Bio-toxins in shellfish are responsible 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 catering businesses, the proportion of samples of unsatisfactory and unacceptable quality food was 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 was unsatisfactory or unacceptable in retail premises where there was no hazard analysis system in place (17%) compared with those that had a documented system (11%), or an 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 food hygiene training, the business was more likely to have a hazard analysis system in place.

3.

Consultation

Within Government 3.1 Other Government Departments, including devolved administrations, were consulted on the proposal through the Ministerial Sub-Committee on European Issues (EP). The Committee cleared the proposed UK negotiating lines and were updated on developments and the adoption of the legislation. Officials have had more detailed contacts with Agricultural Departments and Home Office on specific issues. Public consultation 3.2 Since July 2000, when the measures were first issued, consultation with stakeholders has been ongoing. Consultation with stakeholders was initiated in July 2000. This included issuing approximately 2000 consultation packs, supported by an initial draft RIA, and posting the documents on the FSA web-site. Some 150 responses were 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 retailing industries represent the most diverse group of stakeholders. There is widespread support for the concept of simplifying the legislation and removing the inconsistencies that have developed in the different sectors. There is a general belief in these sectors that the proposals do not go far enough to simplify the legislation, the argument being that, if a HACCP-based approach is adopted, more of the prescription could be removed. The multi-national based companies, in particular, welcome the legislation taking the form of a Regulation rather than a Directive on the basis that a Regulation would promote more consistent legislation throughout the Community. Many respondents expressed concerns about how the proposals might impact on smaller
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Microbiological quality of food in relation to hazard analysis systems and food hygiene training in UK catering and retail premises by CL Little, D Lock, J Barnes & RT Mitchell. Published in Communicable Disease and Public Health, September 2003, Volume 6, Number 6

businesses, particularly how the application of HACCP-based food safety management procedures can be effective and proportionate in these circumstances. The results have been used to develop the UK negotiating strategy. The implementation of food safety management procedures in smaller food businesses has been addressed through the development 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 stakeholders who responded to the original consultation and thereby indicated an interest and, additionally, stakeholders identified as having an interest in the sector specific subjects covered were contacted and asked for their views. The consultation document was also posted on the Food Standards Agency website for wider access. This Regulatory Impact 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 been established with meat industry interests and a stakeholder group has been set up to address issues raised by the proposal. UNISON have been the main critics of H3, with concerns over the proposed use of plant staff in red meat plants taking over certain duties from official meat inspectors. Others consulted made more detailed comments. Officials have met with the Seafish Industry Authority representatives to consider their concerns. 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-Committee on European Issues (EP) on the basis of options identified. The UK negotiated for legislation which would be flexible and pragmatic. It would allow full application of HACCP principles where appropriate (e.g. large manufacturing enterprises), but would also allow for the development of generic food safety management procedures based on HACCP principles in other circumstances and particularly in some smaller businesses. The Regulations now represent a significant improvement upon the original proposals. They are more focused on the need to protect public health in a way which is effective, proportionate and risk-based. The Regulations clearly distinguish the responsibilities of food business operators from those of the competent authorities undertaking official controls. The UK has therefore successfully negotiated flexibility in the HACCP provisions, and for documentation to be proportionate to the nature and size of the business. 4.2 A Do Nothing option would mean that the UK would not have contributed to the discussions on the proposal and have the opportunity to influence on behalf of the UK. The changes associated with making the proposals more practicable and enforceable would not have been achieved

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

4.3 The negotiation has seen the texts develop in a number of areas. The changes reflect, 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 eventual application more straightforward. In addition, the UK has been successful in attaining a number of significant changes that will make the Regulations practicable for businesses and make enforcement more achievable. What will actually be required of business under the proposals is explored in Annex A. 4.4 The financial consequences of the changes made to the proposals have been quantified where possible. As a whole they will have the result of minimising burdens arising from the new legislation for both industry and enforcement agencies. Where possible the consequences have been accounted for in the cost information detailed in section 5.

5. Costs and benefits Business sectors affected 5.1 There are approximately 600,0004 food business establishments in the United Kingdom, covering catering, retail, manufacturing and distribution. In addition, there are in the region of 160,000 primary producers, including farms, aquaculture establishments and fishing vessels. The majority of the businesses will be affected by the proposals to some extent, although many will already have procedures in place that comply with the requirements of the proposals, e.g. major manufacturers, major retailers and their suppliers. The businesses affected range from low-risk one-person businesses selling e.g. wrapped confectionery, through to major businesses manufacturing high-risk products 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 would be the simplification of hygiene legislation in a way that would lead to its better application and enforcement. Enforcement of hygiene legislation would more fully reflect risk. Improved understanding and operation of hazard analysis based requirements would be expected to result in greater public health assurances, reduction in the incidence of food poisoning, and, in turn, greater consumer confidence. Documentation on the controls in place will help food business operators demonstrate to the
The figure of 600,000 is based on estimates of registered food businesses gained from returns from local authorities.
4

enforcement authorities that controls are effective. At present, the lack of documentation can make the checking of procedures by enforcement authorities very difficult. The precise effect the new requirements would have on the level of food poisoning is difficult to 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. This comprised 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 a whole these figures indicate costs of 1,534 million per year. Therefore, a reduction in the incidence of foodborne illness of between 1% and 5% will result in benefits in the region of 15.3 million to 76.5 million per year as a result of improving and modernising the conditions under which food is produced to prevent, eliminate or acceptably control pathogen (disease causing microorganism) contamination of food and the introduction of food safety management procedures based on the application of Hazard Analysis and Critical Control Points (HACCP) principles. This work indicates that 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 the way in which the regulations are applied and checked. Any resulting improvement in food safety management will mean that the overall food hygiene position would be improved. The disease incidence situation would improve in consequence. An indicative figure of 3% has been included in the RIA for the purpose of the cost/benefit analysis. In the range of consultations to date this figure has not raised any objections. The figure of 3% would seem reasonable set against the reduction (in the five foodborne disease pathogens monitored) of 20% (on the basis of provisional 2003 data) seen in the first two 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. It was based on two earlier studies, and found that consumers are willing to pay a premium for greater assurance that the food they buy has been subject to improved food safety procedures (it was assumed that this premium would be in the region of 1%). The potential benefits were found to be in the region of 500 to 1000 million per year. Benefits could be even greater if the risk of food poisoning were reduced to the lowest possible level. However, the benefits identified overlap to such a degree with those identified at paragraph 4.1 above that they have not been included in the summary 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 to quantify in pure monetary terms. Food businesses will benefit through implementation of measures that would be more likely to enable them to avoid the possible consequences of a food poisoning incident being attributed to their business. Business is increasingly aware of the dire consequences of direct litigation, cancellation of orders and the harm to reputation that can result from association with an outbreak of foodborne illness. In addition, the operation of the new requirements may open up markets that would otherwise be closed. This is a result of bringing the law into line with Codex Alimentarius provisions. For example, Saudi Arabia require that dairy products exported from the UK come from establishments operating a formal HACCP system which they do not necessarily do at the moment.
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.
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5.7 The study referred to in paragraph 2.11 provides information to suggest that there should be other direct benefits from the new requirements to both enforcement agencies and businesses. The study found that businesses in which the manager was trained 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 benefit to both. 5.8 As a result of Regulation 854, direct benefits would result to a small number of businesses in specific sectors. There should be some small savings for small slaughterhouses due to a slight reduction in official veterinarian presence, from about 4.6 million to 4.5 million, if the frequency of inspection is assumed to be reduced from 1 official veterinarian hour per day to a possible 3 hours of Meat Hygiene Inspector time per week plus 1 hour of official veterinarian per quarter. In cold stores the charge to industry 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-based audit as would other non-approved premises and so some of this saving may be offset to put the necessary procedures in place.

Costs Compliance costs 5.9 The Regulations do not substantially alter any requirements in respect of premises or equipment from the current legislation. Where the existing law requires food safety management procedures (hazard analysis) to be implemented, the main additional cost to business will be associated with the verification and documentation of those procedures, and record keeping to demonstrate that the procedures are followed in practice. The Regulations include a requirement that those responsible for the development and maintenance of food safety management procedures have received adequate training in the application of HACCP principles. These competencies may be gained by various means, such as on the job training, prior experience, short courses or self-study of appropriate guidance materials (e.g. Safer Food, Better Business in England and CookSafe in Scotland) or more traditional materials issued by local authorities in Wales. 5.10 Implementation of the hazard analysis requirements of the existing regulations is variable throughout the UK. Data are limited, but information collected from local authorities in the context of developing the FSAs HACCP strategy indicates that about 20% of food establishments (excluding primary producers) operate a documented HACCP-based system and a further 45% operate an undocumented one (see TABLE 1 below). This equates to approximately 390,000 (of the total 600,000) food establishments. An analysis of which costs are administrative and policy is provided in paragraph 11.3

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

Food Industry Sector

% Establishments with documented HACCP procedures in place

Establishments with documented HACCP procedures in place

% with hazard analysis in place

Establishments with hazard analysis in place

Establishments in sector

Restaurants & other caterers Retailers

19%

72,000

51%

194,000

380,000

16%

30,000 11,000 5,000

42% 27% 38%

78,000 5,000 6,000

185,000 18,000 17,000

Manufacturers 59% Other 27%

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 in September 2001 seeking local information on the number of establishments operating HACCP based controls. The above estimates must be indicative only, as they are more based on local authorities perceptions than objective assessments and records.

5.11 A more recent study (see paragraph 2.11) showed that 76% of retail premises and 59% of catering premises (65% combined) visited had a hazard analysis system in place. 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 and develop food safety management procedures; and, (b) the cost of the hard copy of the model; and the ongoing costs of (c) the diary per annum; (d) record keeping for 1 minute per day for those using the diary for 350 days per annum; (e) record keeping for 15 minutes per day for manufacturing for 350 days per annum; (f) record keeping for 15 minutes per day in the non-manufacturing sectors for 350 days per annum where the diary is not appropriate. These figures are more fully explained in paragraphs 5.6 to 5.10. TABLE 2a Summary of one-off compliance costs for food businesses (not primary producers) N.B. Safer Food, Better Business and Cooksafe are described in paragraph 5.6 Cost Element Adoption of Safer Food, Better Business (SFBB) Model Purchase of hard Number of Establishments 210,000 Cost per Establishment 150 Total Cost ( millions) 31.5

105,000

40

4.2

10

copy of SFBB materials

TABLE 2b Summary of ongoing compliance costs for food businesses (not primary producers) Type of Establishment and requirement SFBB Diary Completion of SFBB Diary Record keeping in manufacturing sector Record keeping in non-manufacturing where diary is not appropriate Total cost Number of Establishments 411,510 411,510 7,000 Cost per business Cost ( millions) 12.3 17.9 4.6

30 43.50 656

61,490

656

40.3

75.1

5.13 The costs to business of documenting food safety management procedures will depend on the degree to which establishments are complying with current hazard analysis 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 corrective actions. For these establishments, documenting current procedures will not be difficult or time-consuming. Year One One-off Costs

5.14 It is clear that many food establishments are not compliant with the hazard analysis requirements of the current legislation. These are mainly in the catering and retail sectors. The Agency has re-thought the way in which HACCP-based food safety management procedures can be implemented in small food businesses, and is developing an alternative to the traditional approach. These models (known in England as 'Safer Food, Better Business' and Cooksafe in Scotland), designed for small catering businesses, would take an establishment from scratch (i.e. making no assumptions on the degree to which it is compliant with hazard analysis requirements) to full compliance with the HACCP-based requirements of the forthcoming legislation. The first version is being developed for small restaurants. The cost to business is essentially the time taken to assimilate the guidance and develop food safety management procedures. On the 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 a cost 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. The testing that is now underway should help to refine this estimate. It is envisaged that the

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model will be presented in the form of a CD-ROM or in hard copy. The CD-ROM version should be made available free of charge whereas a charge of 40 would be applied to the hard copy. Whilst detailed costings have not as yet been calculated for the application of the CookSafe model in Scotland, guidance materials are being given to existing 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 all sectors, have documented HACCP-based procedures in place, and it is assumed therefore that these establishments would be compliant with the forthcoming legislation. This leaves 270,000 establishments that have hazard analysis in place and 210,000 establishments that do not. If all of these 210,000 businesses are assumed to be amenable to an approach based on Safer Food, Better Business, one of the models in operation across the UK, the initial one-off costs for them would be 31.5m. This takes as a starting point that those establishments would be employing the approach from scratch. 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 than catering. If we assume that 50% of the 210,000 establishments would require to access the model information by hard copy (105,000) they would incur a one-off cost of 40 a total one-off cost of 4.2 million to industry. As mentioned in paragraph 5.14 there are no one-off costs associated with disseminating the hard copy CookSafe manual at present 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 the establishment, as the legislation acknowledges. The Safer Food, Better Business approach for small restaurants envisages a simple diary in which the business would keep 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 a series of tick boxes. It should take no longer than 1 minute per day, per establishment. If we assume that this form of record keeping will take an establishment 1 minute per day to complete for 350 days per year, the cost involved amounts to 350 minutes or 5.8 hours per year. At an hourly rate for an establishment operative of 7.50, this amounts to 43.50 per year. Multiplied by the number of establishments where this approach is assumed to be appropriate, namely 411,510, this amounts to a total cost of 17.9 million 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. For larger establishments, or operations where more record keeping is justified, record keeping will take longer. A similar costing exercise has not as yet been carried out using the CookSafe model. 5.17 The nature of manufacturing is such that more record keeping is likely to be necessary than in catering or retail operations. The 2001 survey (Table 1) indicated that about 7,000 food manufacturing establishments in the UK did not have documented HACCP procedures in place. Assuming that record keeping takes an average of 15 minutes a day for food manufacturing establishments, this gives a cost of 7000 x 87.5 hours/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 have documented HACCP procedures in place. The Small Business Service estimate that

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87% of food businesses comprise 10 people or less. Assuming that the Safer Food, Better Business approach is suitable for establishments of this size, then the cost would be the cost of the diary itself 30 x 411,510 = 12.3 million/year. In addition the same establishments 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 of 61,490 x 87.5 hours/year x 7.50/hour = 40.3 million/year. This gives a total annual record keeping cost of 17.9m + 4.6m + 12.3m + 40.3m = 75.1m, in addition to the one-off cost of producing documented procedures of 35.7m. As yet specific costs based on using the CookSafe model are unavailable. 5.18 As Regulation 854 is exclusively limited to the role and duties of the competent authorities, the effects on business should be relatively small. Any additional costs to business will depend on the frequency of controls applied, who carries them out and the attendance of the operator at those controls. Cost implications should be neutral overall, 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 controls in meat plants and in some cases changes who will be responsible for carrying out the controls. This will have an impact as the presence of official veterinarians and meat inspectors (DARDNI officials in Northern Ireland) are charged to the operator, whereas local authority presence is not. 5.19 The cost benefit analysis as it applies to procedures based upon HACCP principles is mostly representative of large manufacturing businesses. The European Commission are presently developing guidance on procedures based on HACCP principles under the EU Food Hygiene Regulations which envisage further flexibility for small businesses (such as caterers). Discussions are ongoing in the European Commissions Standing Committee on Food Chain and Animal Health (SCoFCAH) and the UK is represented in these discussions where the interests of UK stakeholders is being taken into account. However, until the Commission guidance is finalised, it will not be possible to complete the cost benefit analysis with respect to small businesses in particular. Therefore, a separate RIA for the Commission guidance on HACCP will be developed once the Commission guidance is finalised later in the year. This will analyse the costs and benefits for small businesses based upon the flexibilities introduced. 5.20 A more recent consideration of the likely costs associated with implementing procedures based upon HACCP principles throughout the UK is set out in the March 2005 FSA Board paper regarding HACCP. A copy (including annex 2 of the paper) is attached at Annex G. The FSA Board paper also envisages a more gradual approach to ensuring compliance with the EU Regulations for all businesses and this will also need 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 operations such 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 primary products from the place of production to an establishment. Primary producers will not

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be required to apply HACCP-based procedures. Primary producers will need to follow good practice and manage their operations in such a way that hazards are acceptably controlled. In practical terms, the requirements on primary producers amount to fairly basic hygiene procedures. Primary producers must respect other existing legislation in terms 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, control pests, take account of any test results and keep some basic records. Stakeholders are being consulted on the form the controls will take to ensure they are practicable and can be addressed in Good Practice Guides to be initiated by industry with support from other stakeholders. As with other food businesses, primary producers would have to be registered with Competent Authorities. In practice, the requirements are expected to entail relatively modest change to current practice, and the FSA is in discussion with Agriculture Departments as to how they will be implemented, applied and enforced. 5.22 Research6 conducted on the proposals as issued estimated the total additional costs to the farming sector (in meeting the requirements set out in paragraph 5.11 above) as approximately 20.7 million per year, an average of 144 per business. The costs were calculated on the basis of costs shared between approximately 150,000 farm businesses7 in the UK. A range of business types and sizes was considered, but not the fishing or the game/hunting industries. The costs ranged from 94 for a very small beef or sheep farm to 620 per year for a large horticultural producer. Similar costs are assumed to apply to the c.200 game farms in the UK at a total cost of 40,000 per year. However, consultation with other government departments indicates that costs will in fact be de minimis. Since the research was undertaken, certain requirements on primary producers have been removed (e.g traceability) and hence burdens are likely to be reduced. Although the Cost benefit Analysis for this RIA assumes an upper cost limit of 20M, costs will in all likelihood range from 1M up to 21 million dependent upon the 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 vessels under the new requirements as they are very similar to existing legal requirements with very little change. There are estimated to be around 3,000 operators in the shore fishing and aquaculture sectors but the specific requirements flowing from H1 on these sectors are minimal and less than those applying to other primary producers. Costs of around 100 per producer may be a reasonable assumption amounting to 300,000 per year. Total costs for the primary production sector therefore amount to approximately 21 million per year. 5.24 As part of the project to implement the legislation in the UK, summary guidance has be produced (to be issued around November 2005) to inform stakeholders, including primary producers, of the requirements of the new legislation. This should help in forewarning stakeholders of what is being introduced. In addition, the legislation encourages the development and use of guides to good hygiene practice. Although the use of this guidance is voluntary under the legislation, industry will be encouraged to
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.
6

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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, but a new unified registration system is not being proposed. For most businesses, this will not impose a new burden as use of existing forms of registration will be allowed where feasible. In any case, existing legislation requires premises used as food businesses to be registered with local authorities if they are not otherwise registered or approved. This applies with only limited exemptions, including most primary producers and premises controlled by voluntary organisations or charities. In the case of agricultural primary production, registration systems already in place may be used, such as information from the agricultural census, the Integrated Administration and Control System or the newly introduced 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 shellfish gatherers and some shore fishermen. Industry are being consulted on this requirement as part of the policy consideration of the national measures required by this legislation. The traceability elements contained in the original proposals have been removed from the texts following the introduction of requirements in the General Principles of Food Law Regulation. No additional costs, in relation to traceability, will therefore arise from this measure.

Impact on Charities and Voluntary Organisations 5.25 Charities and voluntary organisations should already be complying with the requirements of the General Food Hygiene Regulations 1995, which require, in effect, implementation of the first five HACCP principles. These organisations will be affected by the proposals to some extent as will organisations that give out food, e.g. Shelter and Crisis at Christmas. However additional burdens should not be great. Such organisations would need to be registered as food businesses and would have to verify and record procedures, but many may be doing so at present. The Charity Commission has been consulted and commented that it did not foresee the new legislation creating an unnecessary burden on the charitable sector. A number of charitable organisations were 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 it relates only to the duties of enforcement authorities.

5.26 The Food Standards Agency does not consider that implementing these Regulations 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 been consulted about this proposal.

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6.2 Current requirements of food hygiene legislation do not in general necessarily reflect the situation in smaller businesses. These requirements tend to be prescriptive and reflect the controls necessary in larger business. This has led to attempts to deal with issues in relation to smaller businesses through the application of derogations. The approach of this proposal however, by removing prescription, means that rules can be applied to all business sizes appropriately. Controls will be more reflective of risk and targeted on critical points, moving away from mechanistic compliance. 6.3 A number of small and medium-sized businesses (SMEs), or their representative organisations responded to the consultation. In addition, in conjunction with the Small Business Service (SBS), the FSA are visiting and talking to SMEs in relation to the HACCP strategy, particularly as it impacts on caterers. At the end of March 2002, four small retail businesses which sold fresh, chilled and preserved foods were visited. These visits were arranged with the Rural Shops Alliance. All were registered with the Local 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 and advice. Although the businesses lacked knowledge of HACCP principles, they were identifying hazards and taking action to control them. Temperatures were controlled, checked and, in most cases, records kept. The businesses regarded the proposals as reasonable and proportionate, and did not consider that the proposals carried undue cost implications. The most common response was that the new requirements reflect measures businesses already undertake as part of normal operations. All accepted that the financial consequences of a food poisoning incident being attributed to a business could be very serious, and threaten its existence. The businesses encouraged the FSA to provide simple, straightforward and easy to access information. Such information is a major part of the FSA HACCP strategy independent of these proposals. It is intended to continue with further consultation and visits to SMEs in relation to implementation of the legislation. 6.4 Other concerns expressed by representatives of small businesses can be accommodated through the appropriate interpretation of small and local in the proposals. Regulation 853 allows for the provision of national law where small quantities of primary products and certain types of meat are supplied directly by the food business to the final consumer or another local retail establishment. This is particularly important in relation to sales of small quantities of game meat to the final consumer or local retail outlets. 7. Competition Assessment

7.1 The new legislation will have farm to fork coverage and apply to all sectors including retail, catering, manufacturing and distribution and primary production, some 760,000 businesses in total. 7.2 The new legislation will apply equally to all new and existing businesses and most of the requirements relating to production controls and monitoring are already likely to be used as the industry standard. The new legislation will have the potential to aid 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 be produced to the same or equivalent standards as that produced within the EU. Whilst

16

businesses may incur some adjustment costs arising from changes to the hygiene requirements, we do not expect adoption of the proposals in line with the UK negotiating objectives to have an adverse effect on competition. Indeed, they should improve competitivity. Where costs to business are likely to result, they would be proportionate to 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 not apply a commercial disadvantage to any particular business. There is no evidence that there is likely to be any significant change in market concentration following the introduction of this legislation.

8.

Enforcement and sanctions

8.1 It is very difficult to estimate the precise costs and benefits of the new legislation to enforcement agencies. Local authorities and their representative organisations (Local Authorities Coordinators Of Regulatory Services (LACORS), the Chartered Institute of Environmental Health (CIEH) and the Royal Environmental Health Institute of Scotland REHIS) were consulted on the proposals. A number provided comments, but no information on the costs involved. LACORS did welcome the proposals, but expressed concern on how HACCP could be applied to smaller businesses. They suggested that an inflexible application of HACCP would increase costs. However, the new legislation will simplify and greatly reduce the volume of EU legislation that controls food hygiene, and do much to rectify anomalies that have made enforcement difficult. Because HACCP-based procedures lend themselves to audit, and should not require constant supervision, enforcement resources could be targeted more effectively; e.g. certain enterprises may be identified as low-risk and visited less frequently. There would be a benefit to enforcement authorities from any reduction in food poisoning incidence leading to fewer post-incident investigations. For these reasons, there may be a reduced burden on local authorities in the longer term, although it is not possible to rule out the possibility that there may be some additional start-up resource implications. In particular, there may be costs associated with training some enforcement officers in auditing HACCP based procedures - a cost has been indicated in the summary of 0.2 million. 8.2 Regulation 854, in setting down the duties of enforcement authorities creates the main impact in this area. It is estimated that the costs and benefits will be approximately neutral 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 the limited scope for deploying staff. For example, plants where attendance will be newly required, may be in different geographical locations than plants where official veterinarian attendance can be reduced. In addition, the savings resulting from overall reduced attendance are likely to be offset by the requirement for increased training of staff 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 would be kept to a minimum. 8.3 Through the FSAs strategy for wider implementation of HACCP-based procedures, a role is envisaged for local authorities in helping businesses comply. Guidance and further Agency training will be provided to help enforcers assess the effectiveness of HACCP-based controls. This work should go a long way to smoothing

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the transition in the duties of enforcement authorities necessary to give appropriate effect to the proposals. Although the HACCP strategy will greatly help, implementation of 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 to these proposals through national implementing legislation which will be the subject of a separate RIA. 8.5 Regarding primary production specifically, work is still ongoing regarding responsibilities for enforcement at this level. It is not possible to estimate the costs involved 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 fully consulted on the legislation regarding their responsibilities under the new legislation. This has involved FSA public written consultations, meetings and attendance at conferences and other events. The FSA has also produced guidance on the requirements of food business operators under the new legislation based upon their activities. Summary guidance has also been produced for small businesses. Guidance is also being issues to enforcement authorities in the form of a revision to the Code of Practice and practice guidance under the Food Safety Act. Training on the requirements of the new legislation for local authorities is also being organised, commencing later this year. We are discussing how to communication information about the legislation more widely for stakeholders. 9.2 Post implementation, we will continue engaging with stakeholders and consider any further training of local authorities require. We will also develop any FSA guidance as appropriate. 10. Post Implementation review The proposals include a revision clause under which the Commission will report to the European Parliament and the Council on the implementation of the Regulation after five years of its implementation. This is a worthwhile exercise where the lessons of experience can be learned and, if appropriate, amendments can be proposed. UK stakeholders will be consulted on the review process. The European Commission are also bringing forward legislation on implementing and transitional measures for the main EU Regulations. Any further costs and burdens associated with these measures will be covered by a separate RIA later in the year. A separate RIA for the Commission guidance 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 of the food chain. As initially assessed, costs to business across all of the sectors affected

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(c.760,000 businesses including primary producers) are likely to be in the region of 132 million in the first year and 96.1 million per year thereafter. This includes one-off costs of approximately 35.7 million for establishments to introduce food safety management procedures based on the various UK models. Additional costs to enforcement 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 thought to be in the region of 15 million to 75 million per year assuming that the new requirements result in a 1% to 5% reduction in food poisoning incidents. Those benefits are likely to build up over a number of years and will outweigh costs in a 5 year or 6 year period in the case of a 3% reduction scenario (See Annex E). The 3% scenario developed in Annex E has been used for indicative purposes in producing the summary in TABLE 4. TABLE 3 provides information on the major elements of the evidence on costs 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 contradicted in consultation responses as a reasonable assumption. TABLE 3 Summary of compliance costs for food businesses
Requirement/cost element Number of businesses affected/cost per business 210,000 businesses at a cost of 150 per business 105,000 businesses at a cost of 40 per business One-off business costs 31.5 m Annual business costs

1.Adoption of Safer Food, Better Business (SFBB) or CookSafe model 2. SFBB information hard copy

4.2 m (not applicable in Wales and Scotland) 12.3 m 4.6 m 40.3 m

3. SFBB diary 4. Record keeping in manufacturing sector 5. Record keeping in nonmanufacturing sectors where diary is not appropriate 6. Completion of SFBB diary 7. Costs to the primary production sector Total costs for 600,000 food businesses

413,250 businesses at a cost of 30 per business 7,000 businesses at a cost of 656 per business 61,750 businesses at a cost of 656 per business 413,250 businesses at a cost of 88 per business 160,000 businesses at an average cost of 130 per business

17.9 m 21 m

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, 5 and 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 policy and administrative costs.

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11.4 The recommendation is to agree the legislation in line with the adopted EU Regulations. It would introduce a hazard-based approach at primary production and consolidate HACCP-based food safety management procedures throughout the remainder 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 132 96 96 96 96 96 Benefits (3% p.a.) million 45 90 136 181 226 226

1 2 3 4 5 6 to 10

Col. 2 - Costs are higher in the first year and lower in subsequent years due to start-up costs 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 indigenous foodborne 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 is 862million and the value of the stream of benefits is 1510 million. Over ten years benefits 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 is 648 million.

12.

Declaration

I have read the regulatory impact assessment and I am satisfied that the benefits justify the costs. Signed.. (Date) Caroline Flint Minister for Public Health Department for Health Contact Point: Gary Taylor Food Hygiene Implementation Division Food Standards Agency 125 Kingsway London WC2B 6NH Tel: 020 7276 8939 20

Email: gary.taylor@foodstandards.gsi.gov.uk

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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 of animal origin). It would extend the existing principles embodied in Council Directive 93/43/EEC, namely: the paramount concern to protect human health, the use of procedures based on HACCP principles (but not necessarily HACCP per se) to identify, control and monitor critical food safety points in food businesses, the possibility of adopting microbiological criteria and temperature control measures in 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 harmful to 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 consumption and the direct supply, by the producer, of small quantities of primary products to the final consumer or to local retail establishments supplying the final consumer. (This is to be controlled nationally). 3. The Regulation contains "horizontal" rules which are those which will apply across 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). It introduces for all food sectors, other than for primary production, a requirement for food safety management procedures based on HACCP principles. It establishes the voluntary use of either national or Community good practice guides. These are to be developed by the food business sectors concerned and are intended to assist food business operators to comply with the general high-level requirements and objectives of the regulation. The guides will be able to include more detailed requirements, specific to the sectors concerned, than would be necessary or appropriate in the simplified legislation. 4. The Regulation establishes the idea that food businesses need to be registered with the competent authority so that enforcers know where food businesses are and may factor them into official control programmes. This Regulation also lays down basic hygiene requirements for premises, staff, packaging, storage, transport, and handling of foodstuffs.

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5. With regard to primary production, the Regulation does not require the application of HACCP procedures at this level. It does however require that primary producers control the hazards associated with their operations. As with other food sectors, good practice guides may need to be produced. 6. The Regulation will require that food imported into the Community complies with same or equivalent standards. It also contains the capacity for Member States to adapt certain of the provisions (without compromising the objectives of the Regulation) in certain circumstances, subject to Commission "approval" under comitology. Regulation 853/2004 7. This Regulation reflects the fact that products of animal origin tend to represent the highest risk, so that additional controls are needed. It lays down specific controls which 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 and processed products of animal origin. 8. In bringing all the existing controls together, it has been possible for the Commission to remove some repetition and inconsistency which existed in the current legislation. However, the extent to which further rationalisation and simplification might be possible will be dependent on the experience gained with the new legislation. 9. The Regulation will require the approval by enforcement authorities of premises handling products of animal origin. Products of animal origin will have to bear an identification mark displaying information about where the product was produced or handled. Fresh red meat and game meat will have to bear a health mark, applied under the supervision of the Official Veterinarian (OV). As with the first proposal, the same, or equivalent, standards are to be applied to imported products. Regulation 854/2004 10. The majority of this Regulation concerns detailed rules for the conduct of meat hygiene controls, although rules are also laid down for controls on live bivalve molluscs and the areas from which they may be gathered, fishery products and raw milk and dairy 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 account of the introduction of HACCP-based procedures in slaughterhouses. It is also intended to take account of the fact that the traditional meat inspection regime is not equipped to cope with the presence of pathogenic micro-organisms which now account for most meat-related foodborne disease incidents. 12. The proposed system of meat inspection does not affect current TSE or animal welfare controls but introduces a number of other changes: Although ante-mortem inspection will still be carried out by the OV and post-mortem inspection will remain his or her responsibility, operators are given clear

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responsibility for the hygienic production of meat, with the role of officials changing from supervision to audit. All animals will have to be accompanied to slaughter by chain information supplied by 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 be allowed into the food chain. Unnecessary post-mortem inspections for some conditions may not have to be carried 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 for individual types of animal.

Ante and post-mortem inspection findings of significance for public health or animal health and welfare will be required to be included on relevant databases and communicated to public and animal health officials as appropriate, as well as to the farmer of origin and his/her veterinary surgeon. The strict requirement for the full time presence of an OV is removed allowing OAs to take on more of the OV duties.

Directive 2004/41/EC 13. This measure would repeal the existing EU legislation and amend other related legislation.

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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 and placing 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 by Directive 94/59/EC. Council Directive 77/99/EEC of 21 December 1976 on health problems affecting the production and marketing of meat products and certain other products of animal origin, as last amended by Directive 97/76/EC. Commission Directive 89/362EEC of 26 May 1989 on general conditions of hygiene in milk production holdings. Council Directive 89/437/EEC of 20 June 1989 on hygiene and health problems affecting the production and 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 and the 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 and placing 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, as last 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 the killing of wild game and the placing on the market of wild game meat, as last amended by Directive 97/79/EC. Council Directive 92/46/EEC of 16 June 1992, laying down the health rules for the production and placing on the market of raw milk, heat-treated milk and milk-based products, as last amended by Directive 96/23/EC. Council Directive 92/48/EEC of 16 June 1992 laying down the minimum hygiene rules applicable to fishery 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 trade in and imports into the Community of products not subject to the said requirements laid down in specific Community rules referred to in Annex A(I) to Directive 89/662/EEC and, as regards pathogens, to Directive 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 and placing on the market of minced meat and meat preparations.

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Annex C Hazard Analysis and Critical Control Points (HACCP) Background to HACCP 1. HACCP is a system of food safety management based on the prevention of food safety problems. HACCP is internationally accepted by governments and the food industry alike as the system of choice in the management of food safety in food businesses. It provides a documented, structured approach to ensuring food safety and places a requirement on food businesses to identify, manage and control hazards inherent in their food handling and production process. It is proportionate and flexible and offers the best protection to consumers when implemented effectively. In line with modern thinking on a wide variety of matters, it is a risk-based system. Wider application of effective HACCP based controls is considered as key to the FSA achieving its wider food borne disease targets. 2. Increasing uptake of HACCP was confirmed as Government policy when accepting the recommendations of the Pennington Report into the 1997 E.coli O157 outbreak in Scotland. Indeed, the need to overhaul European hygiene legislation was a specific recommendation of the Pennington Report that was accepted by Government. In addition, HACCP is promoted by the main international bodies with an interest in this field, e.g. the WHO and the Codex Alimentarius Commission. In recent years a clear international trend has developed to adopt a HACCP approach to food safety. 3. The FSA has a publicly declared Service Delivery Agreement target for 30 per cent of food businesses to be operating documented HACCP based controls by April 2004. The target is aimed at complementing and assisting wider Agency action to reduce food-borne disease by 20 per cent by April 2006. The FSA has a strategy in place to achieve this target. The Proposal 4. The Regulations will require food business operators to put in place, implement and 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 full HACCP systems. Food businesses will need to operate procedures based on the principles. 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 enforcers with 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 application of procedures based on HACCP principles is not a new requirement. In most areas of food production the law requires that the main elements of HACCP should be applied already. Since the implementation of the General Food Hygiene Directive in 1995, food businesses including retail and catering businesses (by far the biggest two sectors in terms 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, many of the sector specific hygiene directives require manufacturers to operate own checks,

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based on HACCP principles. What is new in the proposals as they apply to all food businesses 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 of the present legal requirements, many businesses that are applying the five principles of HACCP will actually be keeping documentary records for their own purposes. The proposals will remove a degree of prescriptive detail contained in the current legislation and so will mean a reduced compliance burden for some sectors of the industry. For example, in the case of slaughterhouses, the proposals make no additional requirements of operators, but do clarify what is required of all food businesses as opposed to what is specific to slaughterhouses. Paragraphs 5.10 and 5.11 provide an overview of HACCP uptake by the main sectors. Annex F provides an overview of the current legislative requirement to have hazard analysis procedures in place. 6. a) b) c) The HACCP principles are: identifying any hazards that must be prevented, eliminated or reduced to acceptable levels; identifying the critical control points at the step or steps at which control is essential to prevent or eliminate a hazard or to reduce it to acceptable levels; establishing critical limits at critical control points which separate acceptability from unacceptability for the prevention, elimination or reduction of identified hazards; establishing and implementing effective monitoring procedures at critical control points; establishing corrective actions when monitoring indicates that a critical control point is not under control; establishing procedures, which shall be carried out regularly, to verify that the measures outlined in subparagraphs (a) to (e) are working effectively; and establishing documents and records commensurate with the nature and size of the food business to demonstrate the effective application of the measures outlined in subparagraphs (a) to (f).

d) e) f) g)

When any modification is made in the product, process, or any step, food business operators 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 in reducing the level of foodborne illness. In the USA, the Food Safety and Inspection Service have issued a report (Enhancing Public Health: Strategies for the Future, 2003 FSIS Food Safety Vision) that welcomes a 16% reduction in foodborne illness in the last 6 years. This is attributed to the implementation of HACCP procedures in all meat and poultry plants in the USA.

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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 Statistics mortality 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

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).

28

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 relatively recent Report of The 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 proportion that 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.

29

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 estimated by 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 examplev, consider a safety improvement expected to reduce the number of premature deaths in 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 potential range suggested by the researchvii.

30

The VPF, and related values for preventing casualties of varying severity, are updated annually and published by DTLR. The latest one is for 2000 (HEN 2000)viii where the estimate of the VPF is 1,144,890 in June 2000 prices. This is the sum of lost output (393.580) medical and ambulance cost (670) and human cost (750, 640). The HSE uses the WTP element of the DTLR estimates of the VPF to derive an estimate of the monetary value of pain, grief and suffering in the case of death. This is calculated as the human cost component of the VPF plus 80% of the lost output component and yields (detailed calculations in Appendix 1) an estimate for the monetary value of pain, grief and suffering in a case of death in 2000 of 1,065,504 (June 2000 prices). HSE add this cost to independent estimates of actual, out of pocket, costs to individuals, employers, the NHS and other costs central and local government to estimate the total cost of a fatality due to work accident or illness.ix HSE also produces estimates of the cost of pain, grief and suffering for minor cases of ill health, defined as those ill for up to 7 days, for other cases of ill health, defined as those ill for more than 7 days, and for permanently incapacitating ill health. The costs for minor and other illness is derived using the standard gamble approach, a variant of the WTP approach, where individuals are asked what they are willing to pay to reduce the risk of varying severity of illness or injury x. The latest published estimates are for Q3 1999xi and these are uprated to Q2 2000 by the rate of increase of nominal GDP per capita between the two periodsxii (see appendix 1 for detailed calculations). The estimated monetary values of pain, grief and suffering for the four levels of severity of illness, uprated to mid 2000 are: 1. Minor illness of up to 7 days 155 2. Illness lasting more than 7 days 1,960 3. Permanently incapacitating ill health 188,870 4. Death 1,065,504

Matching quantities on the number of cases of IFD occurring at each level of severity of illness utilises the estimates by PHLS/CDSC, information from the IID Study on the duration of intestinal illness and a few additional assumptions. The CDSC paper provides information on the total number of IFD cases and a breakdown into those cases presenting to a GP (368,516) and those not visiting a GP (970,256). The IID Study estimates that 97% of those not seeing a GP are ill for up to 7 days and 3 % for longer than 7 daysxiii. For those who do see a GP it is estimated that close to 60% are ill for up to 7 days while 40% are ill for longer than 7 daysxiv. There is no information on the number of cases that become permanently disabled due to IFD but CDSC estimate that there were 480 cases of deaths due to IFD in the year 2000. A conservative assumption is added that the number of cases of permanent disablement is the same, 480. In the calculations of costs it is also reasonably assumed that all cases resulting in permanent disability or death consulted a GP.

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The monetary value of pain, grief and suffering from IFD is estimated at a total of 1,126 million, the (rounded) sum of: 145.9 million for cases that do not see a GP and ill for up to 7 days; 57.1 million for cases that do not see a GP and ill for more than 7 days; 34.3 million for cases that see a GP and ill for up to 7 days; 287.9 million for cases that see a GP and ill for more than 7 days; 90.7 million for cases of permanent disability; 511.4 million for cases of death; (Detailed calculations of the above estimates are provided in Appendix 1.) The estimated total cost of IFD in England and Wales is the sum of (i) the estimated actual, out of pocket, cost of 164 million and (ii) the monetary value of pain, grief and suffering due to such illness of 1,126 million, a total of 1,290 million in the year 2000. The average cost per case is 1,290 / 1,338,772 = 964 per case. Assuming that the incidence and outcome of IFD is the same in Scotland and Northern Ireland as in England and Wales, the estimated total cost of IFD can be scaled up to UK level, by the ratio of the population in UK to that in England and Wales. The estimated total cost of IFD in the UK in 2000 is 1,456 million.

Adak G.K., Long S.M., OBrien S.J. Trends in Indigenous Foodborne Disease and Deaths, England and Wales 1992 to 2000 (Gut 2002; 51: 832 - 841). 2 A Report of the Study of Infectious Intestinal Disease in England (2000) Food Standards Agency, HMSO. 3 Source of information see (i) above. 4 There are estimates of the average costs of cases of Salmonella (606), Campylobacter (315), Enterovir E. coli (214), C. difficili (287), Rotavirus (164) and SRSV (177) in 1994/5 prices. 5 Advise by Dr J Roberts, the economist on the IID study team. 6 Quoted from HSE document GAP 23: Regulatory Impact Assessment Policy Appraisal and Evaluation. Version: 3rd version, January 2001. 7 Though the HSE has not formally endorses any single VPF figure. 8 For further details refer to GAP 23 above and to HSE Book published by HMSO (1999), The Costs to Britain of workplace accidents and work-related ill health in 1995/6. 9 DTLR Highways Economic Notes No1: 2000. 10 It is relevant to note that while the HSE uses this statistical value of life for most death cases, for death due to work related cancer a value double this estimate is used to reflect the particular aversion of people (the dread factor) to this illness. 11 See HSE The cost to Britain of workplace accidents (reference in viii above) pages 32 & 33 and Appendix 4 pages 77 & 78. 12 Source GAP 23, January 2001, reference iii above. 13 See paragraph 10 in HEN2000, reference vi above for method of uprating WTP estimates. 14 Data from the Population Component of the IID Study matching diagram A4.48, provided by Dr J Roberts. 15 Same as xiv to match diagram A4.44.

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Appendix 1: Calculations of cost of illness in 2000 (i) (ii) Actual cost of illness Additional monetary value of pain, grief and suffering 1,338,772 368,516 970,256

(i) Total number of IFD cases in 2000 of which: visited GP did not visit GP

For those visiting a GP the average cost of illness is based on the estimated cost in the PG control component of the IID Study (see Table 8.7. IID). Costs are centred in 1994/5 and uprated with appropriate indices to mid 2000. The average cost comprise of: NHS costs = GP 44.80 + Hospital 17.82 = 80.44 * 1.206 (NHS composite inflation index 1994/5 = 97.0 Direct personal cost 15.21 * 1.1355 (RPI excluding housing 1944Q4 to 2000Q2) = 17.3 to mid 2000. See Appendix 3 for data and uprating factor)

Lost earnings of ill person and carers 139.97 +35.98 = 175.95 * 1.253 (Average Earnings Index 1994Q4 to 2000Q2) = 220.5

Average actual cost for those visiting a GP

= 334.8

Total cost for those visiting a GP 334.8 * 368,516

= 123 million.

[Note that these costs do not include any estimate of direct cost for cases of fatality and those ill for more than six months since the IID Study, on which the above costs are based did not include such cases. Some, partial, correction for these missing costs is provided at the end of the calculations in this appendix.] {Due to rounding, the total actual cost of those visiting a GP is 123 million, even if the lost earning of those dying or permanently disabled ( 2*480) are deducted from the calculation above see correction at end} For those not visiting a GP the average cost of illness is based on the cost in the Population/community component in the IID Study (see Table 8.7). The average cost comprise of: Direct cost 3.72 * 1.1355 (RPI) Lost earnings 17.21 + 13.38 = 30.59 * 1.253 (AEI) = 4.22 = 38.33

Average cost for those not visiting a GP

= 42.55 33

Total actual cost for those not visiting a GP 42.55 * 970,256

=41million

Total actual cost for all cases of IFD

123 + 41

=164million

(ii) Additional monetary value of pain, grief and suffering based on estimates of values by DTLR as used by HSE to add monetary value for pain, grief and suffering to actual cost of work related illness and death. HSE uses four classifications of the severity of illness: minor illness lasting up to 7 days, other illness lasting more than 7 days, permanent disability and death. For death the estimates of the monetary value of pain, grief and suffering used in this paper are taken from components of the cost of fatality for June 2000 published by DTLR in the Highways Economic Notes No1: 2000. The components of Human costs and Lost output are combined, using the formulae used by HSE: Value of pain etc. in case of death = Human cost + 0.8 * Lost output = 750,640 + 0.8* 393,580 = 1,065,504 in June 2000. The monetary value of pain grief and suffering of permanent disability, other ill health and minor illness are taken from the latest published estimates for the third quarter of 1999 by HSE (GAP23: Regulatory Impact Assessment Policy Appraisal and Evaluation, 3rd Version, January 2001). These estimates are uprated from Q3 1999 to Q2 2000 by the nominal growth of GDP between the two periods, an addition of 3.15%. (No correction is made for change in population since the period is short.) The monetary values of pain grief a suffering for various severity of illness are: Minor illness in Q3, 1999 Other illness in Q3, 1999 150 * 1.0315 = 155 in Q2, 2000;

1,900 *1.0315 = 1,960 in Q2, 2000;

Permanent incapacitating ill health Q3, 1999 183,100 * 1.0315= 188,870 in Q2, 2000.

Quantities of illness of various severities have to be matched to the above estimates of costs per case. Quantities estimates are based on the CDSC estimates of the total number of IFD in the year 2000 (data in Appendix 2). The CDSC researchers estimate that there were 480 cases of death from IFD in 2000. There is no information on the number of cases of permanent incapacity. An assumption is made that the number of cases of permanent incapacitating IFD is of a similar scale to that of fatality, 480 cases in 2000. There is some evidence from the US for a few pathogens on the level of very long-term illness and this suggests that our assumption is reasonable and may be conservative. There are in total 1,338,772 of cases of IFD in 2000 (CDSC estimates). Of this total 368,516 see a GP and 970,256 dont see a GP.

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Using information collected in the IID Study, these totals are divided into cases that are ill for up to 7 days and those that are ill for longer than 7 days: For those not seeing a GP 97% are ill for up to 7 days and 3% for longer (population component, diagram A4.48, data provided by authors). For those presenting to a GP some 60% are ill for up to 7 days and 40% are ill for longer (GP component, diagram A4.44, data provided by authors). Applying these proportions we get: Cases not seeing a GP and ill for up to 7 days Cases not seeing a GP ill for longer than 7 days Cases seeing a GP and ill for up to 7 days Case seeing a GP and ill for longer than 7 days 970, 256 * 0.97 = 941,148 970,256 * 0.03 = 29,108 368,516 * 0.6 = 221,110 368,516 * 0.4 = 147,406

Assuming that all cases of death and permanent incapacity see a GP and are ill for longer than 7 days, we deduct 960 (=480+ 480) from the last category to yield: Cases seeing a GP and ill for longer than 7 days, net 147,406-960 = 146,446. Multiplying quantities by prices, costs, we get the following monetary values in year 2000 for pain, grief and suffering for the various categories of IFD illness:

Mortality

480 cases * 1, 065,504 480 cases * 188,870 941,148 cases * 155

= 511.4 million = 90.7 million = 145.9 million

Permanent disability

Not presenting to GP, up to 7 days illness

Not presenting to GP, more than 7 days illness 29,108 cases * 1,960 = 57.1 million Presenting to GP, up to 7 days illness 221,110 cases * 155 Presenting to GP, more than 7 days illness Total 146,446 * 1,960 = 34.3 million = 287.0 million = 1,126.4 million

[Correction for missing estimates of output, or expected income, of those suffering permanent disability and cases of fatality. In the estimated direct cost there is no allowance for the lost output in cases where foodborne illness causes permanent incapacity or death. A minimal correction for cases of fatality is to add the 20% of estimated lost output not included already in the estimate of pain, grief and suffering in section (ii) above. This adds 37.8 million (=78,716 *480 cases) to the total cost. There is no obvious source for an estimate of lost output in cases of permanent incapacity but since, by definition, those suffering from permanent incapacity will not work again, a correction of similar order of magnitude to cases of mortality is used adding another 37.8 million to total cost. 35

The total correction for lost output for these two small groups is conservatively estimated at 75.6.] The estimated total cost of IFD in England and Wales is the sum of (i) the estimated actual, out of pocket, cost of 164 million and (ii) the monetary value of pain, grief and suffering due to such illness of (rounded) 1,126.4 million, a total of 1,290.4 million in the year 2000. [Adding the correction for lost output of 75.6 brings this total to 1,366 million.] The average cost per case is 1,336 / 1,338,772 = 979 per case. To scale the estimates of total cost of indigenous foodborne disease in England and Wales to the UK level an assumption is added that the number and outcome of cases of IFD in Scotland and Northern Ireland is similar to that in England and Wales. The UK costs can then be calculated scaling up the costs in England and Wales by the ratio of their population to the UK population. The population ratio in 1999, the latest available data, was 59,501/52,690 thousand = 1.129 (source: Social Trends 2001 Table 1.1)
The estimates total cost of IFD in the UK in 2000 is:1,336 million * 1.129 =1,508 million

Based on evidence from laboratory reports for 2002, the incidence of foodborne disease in Scotland is slightly higher than its population share and estimated to account for 11% of cases in the UK. The differences in healthcare systems imply that the associated costs may not be directly comparable and so are expressed with caution. However, if the costs of foodborne illness to England and Wales of 1,336 million represent 87% of the cases of illness in the UK, then 11% of cases in Scotland suggest costs in the region of 168 million. The remaining 2% of cases indicate costs in the region of 30 million for Northern Ireland.

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Appendix 2: Data and uprating factors NHS Composite Inflation Estimates of annual inflation increase of NHS total costs, percentages. Source: DOH Increase from 1994/5, when data from the IID Study is centred to the latest available year 1999/00 and an assumed addition of 2% from the middle of 1999/00 (September/October) to mid 2000. Base year 1994/5 1995/6 1996/7 1997/8 1998/9 1999/00 % increase 3.7 2.9 2.1 3.9 4.5 Index (1994/5=100) 103.7 106.7 108.9 113.2 118.3

Adding 2% for the period mid 1999/00 to mid 2000 the index is120.6. The uprating factor between 1994/5 and mid 2000 is 1.206. Retail Price Index excluding housing Source: National Statistics StatBase. Dataset Name:rpi1 Index of all items excluding housing (CHAZ), Quarterly series (update 12/2/02). Index in 1994 4 Index in 2000 2 142.4 161.7

Uprating factor between the two periods 161.7/142.4 = 1.1355. Average Earnings Index Source: National Statistics StatBase. Dataset Name: aei. Average Earnings Index for the Whole Economy, s.a. (LNMQ), Quarterly series (update 13/2/02). Index in 1994 Q4 Index in 2000 Q2 98.3 123.2

Uprating factor between the two periods 123.2/98.3 = 1.253. Gross domestic product (GDP) at market prices Source: National Accounts Table A1. GDP at market prices, s.a. million. 1999 Q3 2000 Q2 224,686 231,773

Uprating factor between the two periods 231,773/224,686 = 1.0315.

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ANNEX E BALANCE OF COSTS AND BENEFITS Benefits The benefits of the new regulations will mostly be due to the extension of all seven HACCP principles to all food businesses, that is the addition of verification and documentation of HACCP procedures in those businesses currently required to apply only the first five principles of HACCP.9 Benefits from improved food safety will manifest themselves in a reduction of indigenous foodborne illness and the consequent savings in costs. A way of assessing the likely scale of benefits from the introduction of the new regulations is to examine the reduction in indigenous foodborne disease (IFD) over the last decade and consider how much of this reduction is likely to be due to the introduction of partial HACCP in 1995. Estimates by CDSC of indigenous foodborne illness are of a total 2,869,753 in 1992, 2,365,909 in 1995 and 1,338,772 in 2000. The reduction between 1992 and 1995 was of 17.5% and between 1995 and 2000 of 43.5%. Though these estimates are approximate and annual variations in IFD from year to year can be expected, these reductions do indicate the likely scale of reduction in foodborne illness due to tightening food safety regulations. The effect of introducing the new regulations can be expected to build up over a number of years as both businesses and the enforcement authorities improve the way in which the regulations are applied and checked. We assume that the full effect of the implementation of the new regulations will build up over five years and that a reduction of 3% a year will be achieved andfor the purposes of the summary of costs and benefits a 3% reduction has been assumed. The benefits implications will be the following savings in costs in the UK (based on estimates in The Cost of IFD paper costing illness in 2000): First year Second year Third year Fourth year Fifth year Every year thereafter 45 million 90 million 135 million 180 million 225 million 225 million.

One important reason why the extension of the HACCP requirement to include the last two principles can be expected to bring about a significant improvement in foodborne illness is that the legal requirement for documentation should make the enforcement of procedures based on the HACCP principles more effective.

Current requirements are the Food Safety (General Food Hygiene) Regulations 1995.

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Costs The main costs of the new regulations will be due to the extension of the last two principles of HACCP, verification and documentation, in catering and retail industry. Currently these businesses are only required to implement the first five principles of HACCP including identifying potential hazards and measures for their control, determining critical control points (CCP), establishing critical limits for each CCP, establishing a monitoring system and establishing corrective actions when monitoring indicated any CCP is not controlled. A commissioned study of the cost of implementing the last two principles of HACCP in the retail and catering sectors estimates that the set up costs are very small. The running costs of verification and documentation are estimated at 96 million each year. Year one costs amount to 132 million. Costs and benefits Comparing the costs and benefits the schedules look as follows (benefits in 2000 prices, costs in 2000 prices): 3% Scenario Col. 2 - Costs are higher in the first year and lower in subsequent years; Col. 1 (England / Wales); 2 (Scotland) and 3 (Northern Ireland) - Benefits are a reduction of 3% in indigenous foodborne illness in the first five years and constant thereafter. This assumes that a 3% reduction scenario is reflected in each country and that the current costs of foodborne disease are in the same proportion as the percentage share of cases indicated by laboratory reports, as described in Annex D, appendix 1..
Year 1 2 3 4 5 6 to 10 Cost million 132 96 96 96 96 96 Benefits (3% p.a.) million 1 2 Eng / Wales Scotland 39 5 78 10 117 15 157 20 196 25 196 25 3 NI 1 2 3 4 5 5 Total 45 90 135 180 225 225

The year one value over 10 year deflated by 3.5% p.a. of the stream of costs is 862 million and the value of the stream of benefits is 1510 million. Over ten years benefits outweigh the costs by some 75%. The break-even point, when costs are equal to benefits is after about five years. The NPV therefore is 648 million. The 3% scenario has been used in the main assessment shown in Table 3 on page 17.

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Sensitivity Analysis
% Reduction Due to new legislation Cost Estimates 0% higher 2.5% higher 5% higher 10% higher 25% higher 50% higher 0.5 -610 -632 -653 -696 -826 -1041 0.75 -483 -505 -526 -569 -699 -914 1 -359 -381 -402 -445 -575 -790 2 144 122 101 58 -72 -287 3 648 626 605 562 432 217 5 1654 1632 1611 1568 1438 1223 10 4170 4148 4127 4084 3954 3739

The above table displays the Net Present Values10 (NPV) for a range of scenarios under which the percentage reduction in foodborne illness due to HACCP vary, as well as variations to the present value cost estimate of 862 million. The highlighted NPV value of 648 reflects the 3% reduction scenario used for indicative purposes in TABLE 4. The sensitivity table clearly demonstrates a positive and robust NPV for percentage reductions of foodborne illness in the 3% (or above) scenario, even after allowing for costs to be 50% higher than currently estimated. A positive net present value remains for a very small reduction in foodborne illness of 2% and is robust for cost estimates up to 10% higher than currently anticipated. Unless the benefits in terms of percentage reductions in foodborne illness are very low (1%) or the costs vastly higher than estimated, then the implementation of the new legislation is likely to be cost beneficial.

10

NPV calculations ( million) over 10 year period, discounted to 2002 at 3.5% discount rate.

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Annex F Current Legislative Requirement to have a HACCP or Hazard Analysis System in Place by Sector in the UK Current Legislative Requirement Sector Full HACCP Hazard Analysis or 1st 5 No. businesses in principles of HACCP Primary Producers Approved Manufacturers Of which: Meat products Minced meat and Meat preparations Fish products Yes Yes 2,273 (includes LBMs) Milk products Other products Egg products Fresh meat * No Yes No Yes 99 1,149 (red) 307 (poultry) Wild Game Fresh dairy Non-approved Manufacturers Of which: Non-animal products origin No Yes No No No Yes 37 27684 animal origin Yes Yes Yes Yes 1,410 Yes Yes Yes Yes 1,293 231 No No sector 160,000

Distributor/ transporter Retailers Caterer/Restaurants

No No No

Yes Yes Yes

11,270 185,000 380,000

* Commission Decision 201/471/EC requires the implementation of HACCP principles and microbiological testing in fresh meat and poultry meat slaughterhouses, cutting plants and cold stores by June 2002, and for smaller plants, June 2003. N.B. The requirements outlined above refer to the legislative position flowing from the current EU Directives. Those Directives will be repealed and replaced by the new legislation.

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Annex G FSA 05/03/02 AGENDA ITEM 2, 10 MARCH 2005

IMPLEMENTATION OF FOOD SAFETY MANAGEMENT

Executive Summary

1. This paper updates the Board on progress made since the last discussion in March 2004 [ref FSA 04/03/03]. 2. The Board is asked to: note the background to the new EU legislative requirement for improved consumer protection through food safety management procedures in food businesses and the challenge this requirement presents for small businesses and particularly small caterers; note the results of evaluation on approaches to HACCP-based procedures to assist implementation of this EU requirement in small businesses; agree the proposals to assist implementation of the requirements in the different countries of the UK reflecting circumstances and resources; agree that the Agency should not propose new butcher shop licensing legislation when the current requirements are repealed on 1 January 2006; agree to review the effect of the new hygiene legislation in 2 years and consider then whether a scheme for prior approval of food premises should be introduced.

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FSA 05/03/02

AGENDA ITEM 2, 10 MARCH 2005

IMPLEMENTATION OF FOOD SAFETY MANAGEMENT Issue

1. The Board is asked to agree proposals described in this paper to assist UK food businesses to comply with forthcoming EU food hygiene legislation requiring procedures to manage food safety and consequently improve standards to the benefit of consumers. The Board is also asked agree the way forward on butchers licencing and prior approval, taking account of forthcoming legislative requirements. Strategic Aims 2. The programme of work proposed is designed to improve standards in the food industry and through this deliver a reduction in foodborne disease and increased protection to consumers. It is part of the Agencys 2005-10 Strategic Plan, specifically the commitment to: Develop tailored guidance on food safety management (based on HACCP principles) especially for small businesses. Guidance to the catering sector will start to be rolled out in 2005 following tests of guidance in 2004. [Chapter Food Safety]; and; Work closely with industry and local authority partners on helping UK food businesses prepare for new EU food hygiene legislation from January 2006. [Chapter 6 How we will deliver]. Background 3. The Agency is committed to improving peoples health by reducing food-borne disease by working collaboratively with stakeholders to improve standards in the food industry. In EU discussions, the UK has argued successfully for a move away from prescriptive legislation on food hygiene towards a risk-based approach that targets food-safety activity on critical issues in a business - achieving the greatest benefit for consumers in a way that is also proportionate for the business. The Council and the European Parliament have recently adopted

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consolidated food hygiene legislation: the new regulations apply directly from 1January-2006. A separate paper [FSA 05/03/03] to the Board provides information on the legislation and actions proposed for the Agency to implement it in the UK. 4. A key part of the legislation is the requirement for food businesses to put in place and maintain food safety management procedures (based on HACCP principles). The legislation represents a significant step forward for consumer protection, delivering our aim of a risk-based approach, placing responsibility for food safety squarely with the business. Recognising the challenges that this will pose for smaller and less developed businesses, the Agency, along with some of our counterparts in other Member States, successfully negotiated flexibility in the legislation that allows it to be applied for all sizes and types of business. Developing practical guidance for businesses is now the challenge. The UK is well advanced with this, learning from, and sharing progress, with other Member States and the European Commission. The Commission expects to produce an explanation of the legislation for the simplest food businesses during 2005. The work the Agency has undertaken to produce guidance for businesses described in this paper should sit comfortably within this explanation. 5. Food safety procedures are an existing requirement for some sectors of the food industry for example businesses handling raw meat, and the Agency has helped industry by producing guidance. The new EU legislation will cover the whole food industry except primary production. 6. Research shows that larger food businesses already have food safety procedures in place; the challenge is with small businesses, particularly catering and retailing. The Agency has worked closely with stakeholders to develop and test a range of innovative and practical guidance that will allow these small businesses to adopt and manage good food safety practice in a way that complements their methods of working and recognises craft skills. We are also working collaboratively with ethnic communities and sectors of the food industry to ensure appropriate guidance is made available for this large and diverse industry. 7. The Board previously considered HACCP issues in March 2004 [FSA 04/03/03]. At that meeting it noted the large numbers of small businesses and the challenges they face. The Board agreed the Agency should:

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develop guidance focused on small catering and retail business, provide direct assistance to businesses within available resources, and; recognise different situations in each of the UK countries in developing assistance for businesses.

8. Various approaches have been developed to reflect the diversity of different business types and the situation in different UK countries and taking account of the need to protect consumers and the requirements of local stakeholders. A novel approach Safer Food Better Business [SFBB] has been developed in England aimed at small catering businesses that face the greatest challenges. The Agency in Northern Ireland has refined an existing well-used pack for caterers called Safe Catering, whilst the Agency in Scotland has worked with their local authorities and industry representatives to produce a pack called CookSafe. These approaches are targeted at the situations in each country, and are applicable across the UK as a whole. Evaluation of approaches 9. The Agency has completed a significant pilot exercise to evaluate the effectiveness of these different approaches to provide support to small catering businesses. Details are summarised below and described in more detail at Annex 2. 10. The pilot project was a major Randomised Control Test evaluating SFBB alongside HACCP in Practice (an earlier version of CookSafe) and Safe Catering. In summary, the trial has shown that: All of the approaches work well with the types of business they were developed to target; With all approaches, progress is most effective where businesses receive one toone coaching in their premises and where coaches [enforcement officers, trainers etc.] have an appreciation of the craft skills for food preparation; SFBB can deliver cost-effective food safety management in very small businesses;

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1 1. This trial and other pilot exercises have shown that progress can be made, even with smaller businesses where previous guidance had only limited success, and that effective guidance on food safety management can be developed and made practical and proportionate. However, evaluation work has confirmed the challenges to be addressed if this is to be taken forward on a national basis in the UK. Also confirmed is the need for co-ordinated working by the Agency, industry, local authorities and other stakeholders. Implications 12. The lessons learned from development and piloting work have informed the evolving strategy and the proposals for implementation. 13. Recognising the different circumstances in Scotland, Wales, Northern Ireland and England, including resource issues, proposals have been developed to target, and deliver support to businesses taking account of the circumstances in each country. High level plans are described below, more detail is provided in the annexes to this paper. Activity proposed in England 14. The strategy for food safety management already agreed by the Board was to target small catering businesses and retailers as the sectors with most challenges and where the largest public health gain could be made. Safer Food, Better Business was specifically designed to address this target. 15. In evaluation work, SFBB has proved to be a simple but effective approach. Based on the completion of factsheets tailored to the nature of the operation, together with a page-a-day diary for record-keeping, SFBB embodies HACCP principles in a practical way, well-liked by small businesses. 16. SFBB was developed directly with small catering businesses and subsequently tested and refined. Significant trials have been carried out with English local authorities, and the North-West Regional Development Agency. In addition, collaborations with industry stakeholders and community groups have been undertaken to adapt the approach for specific sectors of the food industry and for specific ethnic cuisines. This work has helped refine the approach and allowed

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the Agency to develop valuable networks. Annex 3 describes this work in detail, the main conclusions are: Active involvement of enforcement officers is essential; To help businesses, an initial workshop followed by one-to-one coaching proved most cost-effective; Packs of material left with businesses or made available on the internet would by themselves have only limited effect; Regional support through the RDA network can play an effective part in delivering the Agencys aims; There is emerging evidence that SFBB, correctly introduced, can improve small businesses generally, and not just in terms of food safety; Material developed in association with trade organisations has more credibility and is more acceptable to small businesses; Use of practical language and pictures, and a sensitivity to cultural communication issues is important to gain acceptance in diverse communities.

17. The Agency believes that appropriately implemented, SFBB is a tool that enables small catering businesses to comply with the new legislation. Evaluation has shown that different businesses will need varying degrees of support for successful implementation. 18. The success of SFBB, and the need for support to achieve its implementation at a local level, has been discussed with industry and enforcement stakeholders. It has been generally acknowledged that the different support needs of individual businesses, and the ability of individual local authorities to respond to those needs within finite enforcement resources, needs to be taken into account in the promotional approach proposed by the Agency. 19. Reflecting this and the successful trials where local authorities used SFBB, a twin-track implementation approach is proposed. Details of the components of this approach is set out in Annex 4. In summary, it involves:(1) A central package of SFBB promotional material:to be available through local authorities, trade bodies, other local organisations who can assist businesses; consisting of:

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a core pack diary, safe methods factsheets; supplementary factsheets for different types of cuisine, such as Thai, Chinese, South Indian and Balti; supplementary material for specific operations such as function catering, sandwich making and small care homes. information on how to use the pack; a website aimed at enforcers Including downloadable safe methods factsheets and diary pages, backing information and support material; training/continuous professional development for enforcement officers about the new legislation and using SFBB; support material: case studies, posters, leaflets etc. (2) Financial support to selected local enforcement authorities: a scheme for local authorities that want to fast-track SFBB support to businesses in their area; building on the success of the step change initiative for imported foods; a bidding process, Inviting local authorities to bid for a pool of resources to fund initiatives; encouragement of local collaborations with food groups, RDAs, colleges etc.; bids to be evaluated by Agency team including key stakeholders; evaluation criteria drawn from evidence through trials with local authorities; work to be monitored and evaluated, success criteria to be updated to inform future years bidding rounds.

20. Initially, the focus of the work in England will be with SFBB into small catering and retail premises. Some 3.5m each year for 3 years from Agency funds will be available to support this. Evidence from trials and modelling suggest these approaches will support some 20,000 small catering and retail businesses each year towards food safety management compliance. A table showing progress is given in Annex 4. 21. There are 480,000 food establishments in England. Some 15% of these are very simple businesses like greengrocers and sweet shops that are subject to an alternative enforcement strategy requiring less frequent inspection. The Agency believes these businesses will not require food safety management systems in the same manner as caterers and other higher risk businesses do. The European Commission is currently drawing up guidance on flexibility for these types of

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business likely to confirm this position. The programme proposed here should enable significant progress to be made with small catering and retail businesses, moving from the current 30% compliance in 2005 to a projected ~60% compliance by end 2010/11. 22. In summary:England Number of food establishments Current compliance level Proposal cost Target businesses Target compliance Activity proposed in Scotland 23. Additional resources of 2m p.a. have been provided in 2004/05 and 2005/06 by the Scottish Ministers, FSA Scotland have worked with the Scottish Food Enforcement Liaison Committee, Scottish Food Advisory Committee and others to develop an approach to HACCP called CookSafe (the earlier version of this model was called HACCP in Practice). CookSafe is a manual that provides a step by step approach to developing a food safety management system, combining good hygiene practice and HACCP principles. It is designed to take account of the inherent difficulties facing caterers in implementing food safety management systems. 24. CookSafe is currently being extensively utilised in all 32 Scottish local authorities with funds awarded to specific projects. FSAS will also use some of its additional funds to provide central support, including: Providing workshops on CookSafe and additional support material to local authorities; Producing an e-learning version of CookSafe; Making translated versions available for key ethnic communities in Scotland; Working in collaboration with Scottish Catering Colleges; Launching the Eatsafe award scheme (developed in Northern Ireland) to Scotland.

480,000 30% 3.5m p.a. ~ 20,000 food establishments p.a. ~60% by 04/2011

25. There are an estimated 53,000 food establishments in Scotland, 30,000 of which are caterers. Information collated at the beginning of the project indicates that

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some 38% of caterers already have documented food safety management systems in place. It is envisaged that the proposed approach will provide support to 9000 catering businesses by 2007 to work toward food safety management compliance (30% of total) and that this could reach 12,000 (40% total). 26. In summary:Scotland Number of food establishments Current compliance level Proposal cost Target businesses

Target compliance

53,000 approx. 38% estimated 2m p.a. for 2 years ~ 12,000 food establishments over 2 years 57% by 04/2007 75% by 04/2011

27. Fuller details are given in Annex 5. Activity proposed in Northern Ireland 28. The Safe Catering food safety management model developed by stakeholders in Northern Ireland over a number of years is already in use by all 26 district councils and is widely accepted by the catering sector. 29. The findings from the trial of different approaches to food safety management (reported in Annex 2) have reinforced the perceived success of the pack in Northern Ireland in terms of improvement in understanding, change in behaviour and implementation of food safety management systems. 30. There are some 16,250 food establishments in Northern Ireland of which some 9450 are caterers. Around 3,450 copies of a previous version and 2,750 copies of an updated version of the Safe Catering pack have been distributed amongst these caterers in Northern Ireland. Any catering business operating in accordance with any version of Safe Catering is deemed to have a documented food safety management system in place and hence compliant. A baseline survey of EHOs conducted in 2003 prior to roll-out of the most recent version, estimated that about 3,300 caterers (35%) were compliant, mostly based on use of the previous version of the pack. The survey also estimated that around 30% of all food businesses had

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a documented food safety management system in

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place and that a further 37% were compliant with the current hazard analysis requirement. 31. The Food Safety Authority of Ireland wishes to work jointly with FSA and intends to co-operate with the Agency in developing a version for use in the RoI. Joint activity with FSAI would ensure a common approach throughout Ireland and be a novel mutually beneficial approach between two Member States. 32. The 16 Catering Colleges in Northern Ireland are keen to support training of students in use of the Safe Catering pack. 33. The Eat Safe food hygiene award scheme which is being piloted in Northern Ireland and Scotland is moving forward rapidly and is a key part of FSA NIs HACCP strategy. The requirement for businesses to have HACCP-based procedures is a key criterion for the award. 34. Some 125,000 will be allocated in the next financial year to promote food safety management/HACCP. This funding will be allocated to FSA NIs toolkit of measures as follows: Further enhancements to Safe Catering to include elements of other packs shown to be effective. The Food Safety Authority of Ireland will be involved in the revision, which may include extension of the pack to some retailing businesses. It is intended to have the revised version ready for distribution by December 2005; Supply of copies of the updated pack to at least a further 1500 caterers. Provision of at least 4 training workshops on the revised pack for district council EHOs; Provision of at least 5 training seminars for caterers on the revised model; Continuation of the approach of using existing district council EHOs to deliver the Safe Catering guidance supported by additional district council staff funded by FSA NI if resources permit; Investigation into providing guidance materials and training seminar for the Chinese catering sector in NI; Working collaboratively with catering colleges to ensure training of appropriate catering students in the use of the Safe Catering model. Each final year catering student (approx. 250) will be supplied with a copy of the pack; Extending the scope of the existing Eat Safe award scheme.

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35. FSANI has set targets of 4,725 (50%) of caterers having a documented food safety management in place by April 2006 and 75% of all businesses being in compliance by April 2011 36. Fuller details are given in Annex 5. In summary:Northern Ireland Number of food establishments Current compliance level Proposal cost Target businesses Target compliance

16,250 30% 125,000 in 05/06 1500 caterers 50% of caterers by April 2006 and 75% of all food businesses by April 2011

Activity proposed in Wales 37. FSA Wales is working closely with the 22 Welsh unitary authorities, the Welsh Development Agency and others in Wales to promote food safety management systems to catering businesses. A budget of at least 100,000 will be used to enhance the provision of training and guidance available to food businesses. A steering group comprising of FSAW staff with representatives of each of the three Welsh Regional Food Groups has been set up and will consider how to channel resources to best effect. Previous projects involving awareness-raising seminars, training courses and the development of multi-lingual guidance packs, provide a sound base on which to build. 38. Links are being forged with the Welsh Tourist Board and the Tourism Training Foundation for Wales who are interested in developments regarding food safety management and the Welsh Food Hygiene Award. 39. Details of proposal are given in Annex 7.

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40. In summary:Wales Number of food establishments Current compliance level Proposal cost Target businesses Target compliance

34,000 ~ 30% 100,000+ in 05/06 ~2000 food establishments p.a. ~60% by 04/2011

Monitoring and Evaluation 41. An integral part of the approach proposed by the Agency for each of the 4 UK countries will be:

Arrangements to track progress with implementation within target sectors; Evaluation of promotional materials and support provided to businesses to feed into the evolution of Agency actions in future years.

Other Supporting Actions across the UK 42. Reflecting the Agencys wider strategic agenda on food safety, the Agency has work in hand which provides synergy with the HACCP promotional activity described in this paper. These include: Work with industry and other parts of government to influence National Occupational Standards for training as they relate to food. This should lead to appropriate vocational and short courses for all types of food business (details given in Annex 8); Work with a number of food industry sectors to revise statutory Industry Guides focusing on food safety compliance; Revision of the Enforcement Code of Practice and accompanying guidance to inform local authority enforcement action including consistency of judgements and compliance by food businesses.

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Butchers Licencing 43. The Board is also asked to decide the future of our national licensing legislation for retail butcher shops. It is necessary to review this legislation because the current licensing requirements will otherwise cease on 1 January 2006 when the new EU food hygiene legislation takes effect. The Board is recommended to agree that the Agency should not propose new butcher shop licensing legislation when the current requirements are repealed on 1 January 2006. Supporting arguments for this recommendation are discussed in Annex 9. The discussion reflects the results of a public consultation exercise undertaken to inform Agency policy on this. Prior approval 44. Prior approval is permission for a food business to commence trading provided they meet agreed criteria. It could apply to all new establishments other than those subject to approval under current regulations and the new hygiene regulations from January 2006 (i.e. producers of food of animal origin). Prior approval is a potential way to improve standards and increase the number of food premises with effective food safety management, targeting businesses as they open making sure they are right, from the start. When the Board discussed HACCP in February 2003 it was agreed that the issue should be revisited after the target for HACCP implementation in 30% of food businesses had been reached this has now been achieved [Board paper March 2004 reported this: FSA 04/03/03]. 45. Prior approval would be an opportunity to address consumer concerns by ensuring all businesses meet the standards required of existing approved premises before they can commence trading. However, in order to introduce such a scheme, the Agency would have to show it was a proportionate measure giving proven public health benefit and in line with Cabinet Office Better Regulation principles. To demonstrate this fully, a period for food businesses to operate under the new hygiene legislation is needed, bearing in mind that from January 2006 the requirements on all food businesses, enforceable by local authorities, include maintenance of food safety management procedures based on HACCP principles. Fuller details of these discussions are given at Annex 10.

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Conclusions 46. Application of HACCP-based food safety management procedures represents a significant challenge, particularly for small businesses. The Agency has developed a range of innovative material to help support businesses and has developed implementation support packages taking account of evaluation work, and in conjunction with industry and enforcement stakeholders. This takes account of circumstances in each UK country including central and local resource constraints. 47. On Prior Approval, the Board is recommended to await the results of monitoring and evaluation of the effectiveness of the new hygiene legislation and progress in the food industry with food safety management, and to return to the discussion after the legislation has been in place for two years. 48. On Butchers Licencing, the Board is recommended to agree that the Agency should not propose new butcher shop licensing legislation when the current requirements are repealed on 1 January 2006. Board Action Required 49. The Board is asked to: note the background to the new EU legislative requirement for improved consumer protection through food safety management procedures in food businesses and the challenge this requirement presents for small businesses and particularly small caterers; note the results of evaluation on approaches to HACCP-based procedures to assist implementation of this EU requirement in small businesses; agree the proposals to assist implementation of the requirements in the different countries of the UK reflecting circumstances and resources; agree that the Agency should not propose new butcher shop licensing legislation when the current requirements are repealed on 1 January 2006;

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 agree to review the effect of the new hygiene legislation in 2 years and consider then whether a scheme for prior approval of food premises should be introduced.

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ANNEX 2 TRIALS 3 APPROACHES TO FOOD SAFETY MANAGEMENT IN SMALL CATERING BUSINESSES IN ENGLAND 1. The FSA commissioned a large scale randomised control test to compare the Safer Food, Better Business model with the more traditional models developed in Scotland, HACCP in Practice and Northern Ireland Safe Catering, to determine which models are most appropriate for which situations and to add statistical rigour by comparing to a nil intervention. The pack HACCP in Practice has been substantially refined since the trials and has evolved into the current pack called CookSafe. The work was undertaken by CMi Ltd who were selected following a competitive tender. Evaluation work was undertaken by the University of Wales College of Medicine (UWCM). The trials were in England only, working with independent (i.e. non-chain) catering micro-businesses [EU definition >10 full time staff equivalent & turnover > 2m p.a.] 3. The trial tested the three approaches in some 1000 randomly selected businesses in 40 randomly selected Local Authorities (LAs). The packs were introduced into the businesses through one to one coaching and evaluated in terms of systems implementation, improvements in understanding and behaviour on a scale (0-10) devised by the UWCM. Headline information:4. All three models led to improvements in the businesses with the early prototypes of the evolving HACCP-based methodology, Safer food, better business providing comparable improvements to the more traditionally implemented HACCP-based approaches developed in Scotland and Northern Ireland. All models show marked improvement against a nil intervention. Qualitative findings, indicate that each model is appropriate for different types of business, with the Safer food, better business model being indicated as most effective in both small and micro businesses. The 'Safe Catering' pack developed in Northern Ireland was found to be very effective within businesses with less than two staff and simple menus. 'HACCP in Practice' the approach developed in Scotland, has been found to be most applicable for the larger of the small businesses where there is a greater understanding of the technical issues associated with a food safety management system.

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5. The table below summarises the findings.

Model Previous experience and understanding of food safety required? Types of business where most effectivea

SFBB No

Safe Catering Yes Very small simple businesses 2.2 5.2 1.4 4.4 2.4 5.1

HACCP in practice Yes Larger Small businesses 0.5 4.5 0.5 3.8 0.5 5.2

Range of increase in food safety management Min movement max movement (0-10 point scale) Average model Implementation timec

Smaller businesse s Understanding 1.3 3.8 Behaviour 0.7 3.2 Systems 1.2 3.7 implementation

4 hrs 11 minsd

5 hrs 14 mins

6 hrs 28 mins

a Qualitative feedback - all businesses were independent with <10 FTE staff b increase from 1st to 2nd assessment for mid 50% range of businesses trialled for each model c implementation through 1 to 1 direct assistance d results from phase 2 trialling of latest version of SFBB are stated.

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