Agricultural Products, Food and Drink (Amendment etc.) (EU Exit) Regulations 2020

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Agricultural Products, Food and Drink (Amendment etc.) (EU Exit) Regulations 2020.

My Lords, I hope it will be useful to your Lordships if I speak to both the Agricultural Products, Food and Drink (Amendment etc.) (EU Exit) Regulations 2020 and the Food (Amendment) (EU Exit) Regulations 2020 as both relate to food and drink policy.

The first set of regulations contains necessary amendments to EU agri-food, spirit drinks, wine and aromatised wine regulations so that they can function in domestic law. These primarily concern geographical indication—or GI—schemes, a form of intellectual property for food and drink products, but also extend to wine and spirit drinks sector standards.

I first want to address the impact of the Northern Ireland protocol. For the duration of the protocol, the EU GI framework will apply in Northern Ireland. As such, most of this instrument has the territorial extent of Great Britain. However, as these schemes will be administered and regulated by the UK Government, they will be referred to as “UK GI schemes”. Geographical indications are a form of intellectual property protection for the names of food, drink and agricultural products with qualities attributable to the place they are produced or the traditional methods by which they are made. Examples are Scotch whisky, Welsh lamb and Melton Mowbray pork pies. Most of the amendments made by this instrument are to the retained EU regulations that govern GI schemes. They collectively convert the four EU GI schemes into a legal framework for GI schemes in Great Britain.

The framework will allow applications for GI protection to be made to the Secretary of State by UK and international applicants. It will allow them to be scrutinised and consulted on, and for the Secretary of State to take decisions on awarding new GIs. In doing so we will condense what was a two-stage, member state to Commission application process into a single, streamlined domestic process. This means that decisions on protections for our food and drink products are made here in the UK and not in Brussels. Once awarded GI status, a product name is then added to the relevant public GI register established by this instrument. This means that GI protection formally takes effect in Great Britain, protecting the GI against misuse of its name. From 1 January, all existing UK GIs and EU GIs will be on our registers. These will be joined by international GI products protected through our trade agreements. The rules collectively ensure that the UK meets its WTO obligations under the TRIPS Agreement—the agreement on Trade-Related Aspects of Intellectual Property Rights.

Turning to GI logos, this instrument removes the requirement for EU GI logos to be used by British producers and establishes the new domestic logos. To avoid burdening producers, we are introducing a three-year period before logo use becomes mandatory on relevant British products. Other amendments to ensure the smooth operation of our GI schemes include new procedures enabling appeals to be made to a First-tier Tribunal; allowing Northern Ireland applications directly to the UK schemes without first requiring protection under the EU schemes; ensuring that UK applications to the EU that are undetermined at the end of the transition period transfer to the UK schemes; preserving the existing relationship between GIs and trade marks in determining if a trade mark can be granted; and ensuring the intellectual property protection of wine “traditional terms” such as “reserva”’ and “grand cru”.

My Lords, I thank my noble friend for setting out the draft regulations so clearly. They are important, concerning as they do geographical indications and their protection, such as, as the Minister set out, Welsh lamb, Scotch whisky and Melton Mowbray pork pies. I have enjoyed them all in my time, and many other items governed by the regulations: cheeses, meats, wines and so on. They are clearly important both within the UK and in the broader EU.

The regulations are significant in terms of the protection that will be offered within Great Britain by the new system. As I understand it, and I think the Minister backed this up, Northern Ireland will be governed by the Northern Ireland protocol and will effectively still be treated as an EU member state, so will be treated in much the same way as it has been in the past. The new regulations will apply in the rest of the UK—in other words, in Great Britain.

The Minister referred to a simplified, streamlined procedure with one stage for domestic purposes after the end of the transition period—in other words, from 1 January next year. Can she confirm, because having read the regulations I am still not absolutely clear, that the new system falls into place immediately after the transition period ends? If that is the case, and there is an application for a new protection—a new geographical indication—early in the new year, I can see that our domestic procedure will be clear, but what will happen in the broader EU context? The Minister referred to existing EU geographical indications being recognised here, and I think she also said that our existing indications will be represented over there. Will that be true of new ones? I welcome that, if it is the case, but if there is a freezing of the current position and it does not apply to new ones, for how long are we assured that the existing position will be protected? Is that dependent on an agreement between now and the end of the transition period? Otherwise, what happens to existing protections? Will they apply for all time? That is very important for our market, and presumably for EU markets over here. So that needs to be cleared up by the Minister, and I would welcome her dealing with that point.

My Lords, I start with the report on instruments of interest by the Secondary Legislation Scrutiny Committee. Page 10 considers them in three paragraphs. I will home in on wines—I declare an interest: I have a small vineyard of my own of 100 vines—and spirits. On spirits, there are at the moment something over 100 different gins in the UK, and more are threatened. That is my first point. My second is that the English wine industry, viticulture, is growing very fast at the moment and there are new entrants all the time, which is very encouraging. Is the Minister confident that within the changes we are looking at today, new entrants can be fully briefed, will be welcome and will not be held up by the transitional changes to GI standards?

My second question concerns paragraph 34 of the Secondary Legislation Scrutiny Committee’s 33rd report. It says that this secondary legislation

“will enable the UK to meet its obligations under the World Trade Organisation’s Agreement on Trade-Related Aspects of Intellectual Property Rights.”

However, as I understand it, Northern Ireland is using the protocol, so am I right in thinking that Northern Ireland is in the same boat, so to speak, as it is part of the UK but is somehow or other still stuck in the protocol? I am not entirely clear on how that works.

Thirdly, paragraph 35 of the same report says that, when the committee met, Defra confirmed—indeed, was confident—that total reciprocation

“was ‘the expectation and will be the default position’ at the end of the TP”.

Is that the situation at the moment?

Turning to the explanatory side of the Food and Feed Hygiene and Safety (Miscellaneous Amendments) (EU Exit) Regulations, am I right in thinking that if there is no deal—this is in paragraph 2.2 of the Explanatory Memorandum—we will, in a sense, have to have another lot of SIs? That seems an important question to me.

My Lords, it is a pleasure to follow the noble Lord, Lord Naseby, particularly because, in his celebration of new, small, independent producers of wines and spirits, he gave me the opportunity to note that Yorkshire has what is billed as its first single-malt whisky distillery—the Spirit of Yorkshire distillery—and that a number of new, small, independent businesses are creating interesting gins in Yorkshire. It is clearly important that these local businesses are able to flourish.

I thank the Minister for clearly outlining these regulations. I warn the noble Baroness, Lady McIntosh of Pickering, since we have swapped places in the speakers’ list compared with the previous set of SIs, that I am planning to be quite brief and not take up my full seven minutes.

I want chiefly to concentrate on the agricultural products regulations—particularly the geographical indicators element, focusing, as I began, on the importance of small, local, independent producers. We want to see so much more food production and small-scale manufacturing in the UK. It is interesting that most of the examples that people have cited come from meat, dairy and alcohol; given that so many parts of the UK have brilliant conditions for growing fruit and vegetables, it would be nice to see much more celebration of—and encouragement of the celebration of—those products.

I join other noble Lords in asking what attempts will be made to promote this idea of geographical indicators and to promote the new system, which, we are told, and hope, will be simpler for people to access. We must make sure that it is indeed accessible by very small-scale local producers, who may be producing some exciting and, indeed, healthy new things—and, of course, who face such high levels of multinational competition, given the nature of our current food system, that they really need support to stand up against that.

I am delighted to follow the noble Baroness, Lady Bennett. I congratulate the Minister, my noble friend Lady Bloomfield, on her clear and comprehensive introduction of these two very complicated statutory instruments.

I acknowledge the importance of this field of GI foods, which is the subject of the first, rather large, instrument in this regard. Scotch whisky is I believe our greatest export, not just of food and drink but perhaps of any manufactured good. It is interesting to note that Scotch whisky, Scottish salmon, chocolate and cheese are the top four exports.

It is of note that, while our exports to non-EU countries have increased, they have not yet reached the volume or value of our exports in the last 10 years to the EU 27 countries. The figures for exports of food and drink in 2010 were £4.9 billion to the EU and £2.4 billion to non-EU countries. In 2019 they were £5.9 billion to EU 27 countries and £3.8 billion to non-EU countries. Therefore, Scottish salmon in particular is very important indeed. When I was the MP for a North Yorkshire seat, I had a little campaign to try to get GI for Yorkshire pudding—but it was very difficult to prove that it was actually geographic when it was made.

I will ask some questions. What will be the costs of what was recognised in the Commons essentially as a “policy change” that

“lays the framework for setting up our new … GI system”?—[Official Report, Commons, Delegated Legislation Committee, 25/11/20; col. 6.]

Does my noble friend have any idea of what the cost to businesses will be? Where are we on the internal digital infrastructure necessary to administer all this, and does she expect that it will be in place by 1 January?

Sitting suspended for a Division in the House.

On the question of costs, I understand that two processes will apply to producers who wish to sell both in the Great Britain market as well as in the European Union market. So what chance is there that the two processes will be aligned, when that might be, and what will be the specific cost to producers of having to make two applications? As we will now have tribunal inquiry proceedings, do the Government envisage that there will be a run of clarifications required in this regard? Has there previously been such a procedure or are the Government introducing this for the first time?

I am slightly confused by the different transitional schemes. I welcome the fact there is a three-year transitional scheme for labelling, whereas there is only a six-month scheme in the second regulation for transition into the processes required under that one, and an 18-month transitional scheme is required for either logos or labelling. So it is a three-year period for domestic logos, a different one for labelling and a different one again in the third regulation. If I am confused, perhaps my noble friend might imagine that some of the producers might be equally confused.

I am slightly concerned that there is only an “expectation” of reciprocity. This was raised by my noble friend Lord Naseby and set out in the excellent 33rd report of the Secondary Legislation Scrutiny Committee, for which I am very grateful. Surely it must be something more than an expectation only of reciprocity, and should we not know by now whether there will be reciprocity even in the event of no deal? Like others, I would be extremely pleased to know the implications for the instrument before us today of a deal or no deal.

I welcome the two sets of regulations overall. I congratulate the department on putting together the extensive proposals in the first set, on agricultural products, food and drink—a massive piece of work. I would appreciate greater clarity on where we are running two processes. Where are we on the costs and on reciprocity? What are the potential burdens imposed under the two proposals? The noble Lord, Lord Naseby, asked about a consultation, but has an impact assessment been provided in the preparations?

My Lords, our Benches are content with these two statutory instruments and I thank the Minister and her civil servants for the meeting she arranged to brief us in advance.

As other noble Lords have said, these are important statutory instruments because geographical indication schemes are important to our food and drink industry, particularly our exports. My understanding is that the schemes represent around one quarter of all UK food and drink exports by value, which is approximately £6 billion in export value each year—a significant part of our food industry. Equally, getting these statutory instruments right is about guaranteeing the authenticity of the regulations and the trading of foods, providing reassurances for shoppers and protecting British producers from imitations.

Like the noble Lord, Lord Naseby, and the noble Baroness, Lady McIntosh of Pickering, I am interested to hear what the Minister has to say about reciprocity and no deal. My understanding is that if there is no deal, we have no guarantee that UK GIs will be recognised, and companies will be subject to third-country status. That will amount to a lot of extra time for businesses large and small, because they will need to apply first to the UK scheme and then to the EU scheme, or vice versa in the case of Northern Ireland. Many businesses have spent many years developing their applications and securing their protections. We therefore need to get this sorted as soon as we can to ensure that those products can be retained on the shelves and we do not have to take them off-shelf because the packaging is no longer approved, and to allow those businesses to get back to exporting as soon as possible.

There are also issues around the implementation of the Northern Ireland protocol, in that Northern Ireland products with protections of geographical and traditional names will remain under the rules of the EU scheme. My understanding is that seven Irish products are currently granted protected geographical status under EU law, which means they will equally be obliged to maintain the EU logo, with its visual links to the flag of the European Union. That will apply to three all-Ireland spirits—Irish whiskey, Irish cream and Irish poteen. However, four exclusively Northern Ireland food products will be required to carry on using the logo, with its visual links to the flag of the European Union: Comber new potatoes—I apologise in advance if my pronunciation is wrong—Lough Neagh eels and pollan, and Armagh bramley apples.