Food regulations under review

NZCPR | 18 Nov 2016

Imagine being an artisan cheese maker, so proud of your product and your whole organic farming operation that you agree to Country Calender featuring you on their show. One would think that should be a good news story – but not so for 74 year old Biddy Fraser-Davies of Cwmglyn Cheese. Within minutes of the programme airing, government bureaucrats started hounding this award winning cheese maker, over the years taking almost half of her businesses earnings in compliance costs and fees.

Biddy milks four dairy cows, Patsy, Dizzy, Lily and Isobel, on her small 4 hectare farmlet in Eketahuna. Her milking parlour and cheese-making room were purpose built to the specifications of the Tararua District Council’s Environmental Health Officer. For the first five years of her operation she held a licence to manufacture cheese from the Council and operated with their oversight. There were no health and safety concerns – until that Country Calender feature screened in 2009 and she came to the attention of Wellington bureaucrats.

Biddy explains that she hand-makes the sort of hard Farmhouse Cheese, that was developed centuries ago as a peasant food to preserve the nutritional value of milk. Her cheese won a super gold award at the 2014 World Cheese Awards in London. It is sold by some of the country’s finest restaurants, specialist cheesemongers, as well as from the farm gate.

Ever since the New Zealand Food Safety Authority became involved, Biddy has been trying to reduce her compliance costs, but unfortunately, the Ministry of Primary Industries (MPI), which is responsible for food safety, is not listening.

She explains, “The evaluation and verification of premises has to be regularly carried out by only one or two ‘MPI recognised’ auditor companies. The cost for a small 4 cow operation like Cwmglyn is over $4,000 annually. But if you want to make raw hard cheese, you hit a bigger barrier – as there are no raw cheese auditors in New Zealand, these operations have to be audited by MPI. Not only do MPI charge a substantial fee for ‘Dairy monitoring’ based on the annual milk solids total (the lowest level for charging is 15 times higher than Cwmglyn’s annual production), but any MPI auditor services are charged at a rate of $173 an hour plus travel and accommodation costs – this is on top of any registration fees charged for your operation.

“Raw cheese making incurs additional costs: two milking shed inspections annually at around $300 a time, annual milking plant inspections are another $400, water testing, 2 veterinary herd inspections annually, TB testing annually – you have to be pretty stubborn or foolhardy to want to make raw cheese under these conditions.”

On top of this is a ‘validation’ process, which cost Biddy $10,000 for 10 of her cheeses. This involves intensive microbiological testing, but is based on regulations that are up to 10 times more stringent than those in the UK and 100 times more stringent than those in the European Union – yet their cheeses are imported and freely sold in New Zealand.

Whilst the safety of food produced in New Zealand is clearly of paramount importance, the unreasonable compliance requirements for artisan cheese makers, with their extremely small batches, not only imposes a financial burden that is excessive, but it drives up the price of cheese.

Dr Paul Neaves, head of the Technical Committee of the UK Specialist Cheese Makers’ Association, who is presently visiting New Zealand, believes that the levels of testing required by MPI is disproportionate to the risk.

He explains that the Hazard Analysis, Critical Control Point (HACCP) food safety management system, invented in the United States by NASA to ensure the safety of food for astronauts on space missions, is used in the European Union and increasingly in the UK. It assumes that if the food processes are known to be safe, and have been followed exactly, then the end product must also be safe. Thus, for artisan cheese making, the monitoring of acidity development during curd production, together with salt content, moisture content and the pH value of the maturing cheese, is all the evidence needed to demonstrate microbiological safety.

With a well-written and approved HACCP plan in place, he believes all that is required is an occasional spot check of end-product testing, rather than the present excessive sampling regime.

In fact, the HACCP system is also used in New Zealand, but instead of it being the primary method of ensuring food safety, it is used in addition to all other requirements.

Without a doubt, the food industry, with around 40,000 regulated businesses and 85,000 food premises, is extremely important in New Zealand, accounting for more than 10 percent of the country’s gross domestic product and one in five jobs.

In the year to June 2014, food retail outlets and services turned over $27 billion, and food manufacturers, over $47 billion.

Food exports in that year accounted for over $29 billion out of the country’s total exports of $51 billion. In comparison, New Zealand imported around $4 billion worth of food.

Since the food industry is also one of New Zealand’s most innovative sectors, small operators need to be nurtured and encouraged, rather than punished by excessive regulation. In fact, many successful entrepreneurs, who have established leading food brands, started out on a very small scale in the family kitchen.

EasiYo Yogurt, now available in more than 20 countries, was developed at home by school teacher Len Light, as a way of making affordable yogurt for his family of eight children.

Lisa Er, used her time as a young mum on a benefit to experiment with chick peas, her food processor and kitchen stove, creating the well-known Lisa’s Humus. When she eventually sold to Sanitarium, she was employing over 100 people.

This week’s NZCPR Guest Commentator, food journalist Anna Tait-Davidson, who herself established a successful food manufacturing business from the family kitchen, firmly believes that small operators need to be encouraged, not penalised:

“New Zealand is the world’s leading dairy exporter. Milk, butter and cheese: it’s how the world sees us, and yet our food safety laws make it nearly impossible for our artisan dairies to operate. I believe we are reaching a tipping point – by trying to eliminate risk, we risk losing the artisan sector.

“We need these small businesses to succeed because they do what the big companies don’t. They innovate, they set trends, they test the market, and the big companies follow. You see it across all food categories – craft beer, artisan bread, coffee, ice cream, even butter.

“I speak from experience having introduced fresh pasta to New Zealand many years ago. We started small, built the business over several years (with no food safety issues) then sold it to a multi-national company who saw value in further developing the category. Fresh pasta is now mainstream.

“Could we have built that business under the current and proposed food safety regulations? Given the compliance costs, I don’t think so. Neither, I suspect, would Kapiti Cheese who started at the same time. They’re now owned by Fonterra. That’s how it works in the food industry. Small companies innovate, big companies follow, or take over.”

Anna says it’s high time that MPI got together with the country’s three specialist raw cheese makers to work out a sensible validation and testing regime that’s appropriate to the small scale of their businesses. And as part of that process, it seems only sensible for MPI to train locals to carry out the inspections that they are imposing, in order to ensure their compliance costs are not crippling.

But it isn’t just artisan cheese makers that are having difficulty with food safety laws – many others feel the regulatory burden is too great, especially low risk businesses that have never needed to be registered before.

The new legislation, which came into effect in March, imposes a wide range of costly bureaucratic requirements, including the need to be assessed and “verified” by a council Environmental Health Officer or independent food safety auditor, the need to be registered with the local council, and the need for on-going record keeping and inspections.

Food businesses deemed to be ‘high risk’, such as restaurants, are required to operate under a regulated “food control plan”, which must be in place by June next year. Medium risk businesses, such as bakeries, are to be regulated under “national programmes”, the year after, while low risk businesses, such as fruit and vegetable sellers, will need to register a “food plan” by February 2019.

While those selling home-grown produce at markets or gala days for fundraising purposes, will be exempt, they will nevertheless be required to ensure their produce is “safe and suitable” for consumers – that is, unless they sell their produce more than 20 times a year, in which case they will need to register with a food plan.

These law changes were introduced in response to what the Government claimed was the massive cost to New Zealand of foodborne illness. However, a closer scrutiny of the figures provided by the Government to justify the wholesale regulation of the sector indicated that they had been grossly inflated.

Essentially, while the economic impact of six foodborne illnesses was said to be $162 million, a breakdown of the costs showed only $6 million of that was directly attributed to medical care. The balance included the cost of regulation ($17 million), business compliance costs ($12 million), lost work output ($27 million), and the cost to individuals of being sick ($100 million)!

In other words, as a result of these questionable costings, overly stringent new requirements are now being imposed on the whole food industry.

So have the number of cases of foodborne illness gone down? Well, it’s too early to tell, since the new regulations are being phased in over a three year period.

However, there is no doubt that early indications show many food businesses, like the raw cheese producers, are finding the regulations are far too bureaucratic and costly.

The horticultural industry, which already has a robust audit process in place, is concerned that the new requirements will double the regulatory costs on commercial fruit and vegetable growers, for no real benefits – driving up the price consumers will have to pay for essential fruit and vegetables.

Childcare centres have raised concerns about the onerous requirements they face, especially the council inspection services, which they were told would cost around $300 a visit, but in some centres are costing around $4,000. They say the new rules that cover centres are “a nonsense”, since they were designed for manufacturers and restaurants.

Stall holders at local markets are also concerned – reports indicate that some stallholders in Northland, who are selling produce for only four hours a week, are facing bills of up to $2,000 for “authorisation” – the same fees that are being charged for full-time producers and food retailers. And with only one person in the region allegedly able to process these authorisations, the fees are being grossly inflated by travel and accommodation costs.

These debacles are no doubt being replicated all over the country.

The point is that if small food enterprises are faced with huge bureaucratic burdens and costs, many will simply give up – the food bill will end up driving them out of business.

It is clear that adverse publicity has now forced MPI to consult with the public over whether the new law is working as well as they expected.

So, if you have concerns, we would urge you to send in a submission before 5pm on December 5th – full details can be found on the Ministry for Primary Industries website HERE – or you can email your views directly to foodregulations@mpi.govt.nz

Please help spread the word, by sharing this information with others, so that those who are battling the new law become aware that they can have a say.

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