U.K. RETAILERS WELCOME FOOD-SAFETY AGENCY, BUT FIGHT FEE

JAMES FALLON

LONDON (FNS) -- British food retailers are welcoming government plans for a new food-safety watchdog, but are also worried about an attendant proposed licensing system, which could cost them, as well as manufacturers and distributors, up to $324 million (200 million British pounds) a year.

The U.K. government said Jan. 14 that it plans to foster a new Food Standards Agency, one that would monitor the safety and standards of all foods for human consumption.

The new agency would also commission research and develop new policies, coordinate and monitor all enforcement of food-standard laws, and advise the public, the Ministry of Agriculture and the industry on food-safety issues, according to Jack Cunningham, the British Minister of Agriculture, Fisheries and Food.

One of the government's intentions in planning the Food Standards Agency is to allay fears among British consumers about the safety of the nation's food supply.

The agency would operate independently of government, the food industry or any other interests, "and would play a major part in building consumer confidence in food safety," Cunningham said.

It would be headed by a 12-person commission of food hygiene and public health experts and laymen, and would report to the Department of Health. Its staff would be drawn from civil servants.

The plans still must be approved by the British parliament and the earliest the agency could begin work would be in 1999.

The plans estimate that the agency would cost about $162 million a year to run, of which $56.7 million is already raised through fees to industry.

But the government said it wants to shift more of the costs of monitoring food safety from the taxpayer to the food industry, including the cost of local authority enforcement, which totals up to $243 million a year.

To effect that shift, the government is proposing a flat-rate fee on Britain's 600,000 food premises, from manufacturers to restaurants, claiming a fee of $162 would raise $97.2 million.

The food industry, however, objected immediately to the plan for licensing and a fee, saying it would increase consumers' food bills.

"We are concerned at the proposals to impose a comprehensive system of licensing," J. Sainsbury plc, London, Britain's second-largest food retailer, said in a statement. "A registration system already exists and the new proposals will add to government bureaucracy without, of themselves, adding to food safety.

"The suggestion that the industry should pay the full public costs of food safety will inevitably lead to consumer concern at undue influence by the industry and undermine consumer confidence in the independence of the agency," Sainsbury said.

Cunningham stressed the government wants to consult widely on how the agency would be funded and that no decisions have yet been taken.

Still, government officials said the license fee would amount to less than 0.5% of the industry's sales of $84.2 billion a year. It also disputed the industry's claims that food prices would rise.

The government's proposal for establishing the food-safety agency comes as food-safety issues continue to grow in importance for U.K. food retailers, manufacturers and the British consumer, and especially as concerns continue to persist over bovine spongiform encephalopathy, or mad cow disease, and its possible links to British beef.

One retailer, Terry Leahy, chief executive of Tesco plc, Cheshunt, England, Britain's largest supermarket chain, said in a speech to the Oxford Farming Conference that food safety and quality are of prime importance to his company, an emphasis shared by Tesco's competitors as well.

"Food safety and food quality are everyone's concern," Leahy said, adding that the matter "is a national priority and the achievement of the highest possible food-safety standards is in the interests of consumers, producers, retailers and the people we employ."