Not For EU Food Labels are Going Legal Amid Pushback

The recent ‘Not for EU’ labelling seen on products sold in the UK is causing quite a stir for both industry and consumers. While there is currently no enforced law regulating ‘Not for EU’ labelling in the UK, the UK government has asked the industry to begin transitioning in preparation for the expected legislation in October 2024. It’s an element of the Windsor Framework, a legal framework designed to support easier trade between the UK nations (Wales, Scotland, England and Northern Ireland) despite Northern Ireland being subject to EU product standard rules under EU regulations.

It creates a ‘green lane’ for certain goods travelling from Great Britain into Northern Ireland, so they face more streamlined customs processes for easier trade. The UK and EU have a joint committee discussing how to practically implement the Windsor Framework. Within these conversations, the idea of the UK-wide ‘Not for EU’ labelling was born.

The idea of labelling foods ‘not for EU’ throughout the UK Nations was proposed by the UK government to help make it easier to produce one label for all of the UK (Wales, Scotland, England and Northern Ireland) and to ensure the feeling of the unity of NI within the rest of the UK. It enables the identification of products that are using the ‘green lane’ between GB and NI, thus enabling easier prevention of them crossing the border into wider EU markets, which requires more complicated customs processes now the UK is no longer a member-state.

In agreement with the UK, the EU has made the ‘Not for EU’ label a legal requirement under ‘Regulation (EU) 2023/1231 of the European Parliament and of the Council of 14 June 2023 on specific rules relating to the entry into Northern Ireland from other parts of the United Kingdom of certain consignments of retail goods, plants for planting, seed potatoes, machinery and certain vehicles operated for agricultural or forestry purposes, as well as non-commercial movements of certain pet animals into Northern Ireland’.

It’s solely required for products that are moving to NI from Great Britain (Wales, England or Scotland) to retail premises in Northern Ireland and moving under the Northern Ireland Retail Movement Scheme (NIRMS) sanitary controls derogations; ‘green lane no.1’, and now the customs green lane derogations; ‘green lane no. 2’. It has no relevance or impact on any other member states.  These are the ‘Marking of Retail Goods Regulations 2024’ which extend to England, Wales and Scotland and are proposed to enter into force on 1st October 2024.

However, as this is a labelling-related matter, the handling of regulation for the UK is devolved. To introduce the requirement for ‘Not for EU’ labelling across the whole of the UK for domestically sold foods, new regulations will also be required in the Welsh Senedd, The Scottish Parliament and in England through the UK government. Prepacked foods ‘produced’ or dispatched from an NI-registered or approved food business (excluding prepacked foods originating from outside the UK) are not required to be labelled with ‘Not for EU’ label when they are sold in GB.

One of the main points of contention is the UK government’s intentions to add not for EU-labelling to all products sold in England, Scotland and Northern Ireland, rather than limiting it to only those who trade with NI.  In May 2023 James Cleverly, then foreign secretary said the labels would be required across the UK for “practical and philosophical” reasons. He stated that retailers wanted a common labelling regime across the UK.

In addition, the draft Statutory Instrument states that “A labelling requirement which applies only to goods on the market in Northern Ireland could create a disincentive for businesses and traders to place goods for sale on the Northern Ireland market“. By implementing a UK-wide approach, the government hopes to prevent a disadvantage to Northern Ireland’s supply chain long-term. However, it will add costs for GB food business operators who will have to change labels.

Already Affecting Investments

Plans to introduce ‘not for EU’ labelling on food products across the whole of the UK is already “having an impact on investment”, one expert has warned. It comes after the Food and Drink Federation (FDF) wrote to cabinet officer minister Steve Baker warning about “our sector’s deep concerns” over the proposals, brought in under post-Brexit rules governing the relationship between Northern Ireland and the trading bloc, as first reported by the Financial Times.

Under the Windsor Framework agreement, since last year meat and dairy products moving from Britain to Northern Ireland must be labelled ‘not for EU’ to prevent them moving into the Republic of Ireland, an EU member country. But the British government will insist from October 2024 that all meat and dairy goods across the whole UK must carry the labels – with some supermarkets complying even earlier.

Marco Forgione, director general of the Institute of Export & International Trade, told City A.M. that members had warned of “their concerns about the new requirements, which will have cost and potentially sales implications”.  He added: “We are also aware that the proposed changes are already having an impact on investment in the UK’s food manufacturing industry.”

The letter, from FDF chief executive Karen Betts, warned: “Our industry is very concerned about these proposals, which will introduce significant complexity and cost into operations. She added: “This seems to us to be a very complex regime to impose on British businesses and consumers. These costs, coming at a time when manufacturers are already absorbing input cost inflation, will inevitably feed into higher food and drink prices for consumers across the UK – putting further pressure on hard-pressed households. “This new labelling regime will make investment in UK food and drink producers much less attractive. We hear of investors already putting plans on pause, and considering investing in companies in the EU instead, from where they can decide about whether it’s worth supplying the UK market at all.”

Forgione added he was “hopeful” the government could consult on a solution to protect both Northern Ireland’s trade and the UK’s “world-leading food and drink industry… so hundreds of thousands of exceptional niche and small food manufacturers continue to thrive”.

A government spokesperson said: “These measures will help ensure that consumers in Northern Ireland have access to the same goods as those in the rest of the United Kingdom, safeguarding the UK internal market and the operation of the Windsor Framework, and preventing the diversion of products. “We are currently carrying out a consultation seeking stakeholder views and evidence on how best to implement the GB labelling requirements as effectively as possible. This will consider exemptions or additional support, such as for small businesses.”

Will There be Legal Action?

Food producers say the labelling could add £250m a year to their costs, further fuelling inflation, and they are discussing a legal challenge as a viable option if a solution with the government is not found. One body said it was already consulting lawyers to examine its options if “sensible alternatives” to the plan were not put forward.

As part of the Windsor framework agreed with the EU last year, since October 2023 all meat and dairy products sent from Britain to be sold in Northern Ireland have had to carry a “not for EU” label. The measure is designed to prevent goods from bypassing EU controls by being sent to the Republic of Ireland, which does not have a hard border with customs checks on goods coming from Northern Ireland.

Since Brexit, UK exporters of foods of animal origin have to pay to secure sign-offs by vets before they can send their shipments to the EU. But the labelling is set to be extended to all meat and dairy products sold in the UK from October, as part of the “safeguarding the union” deal with the Democratic Unionist party (DUP) that was agreed in January. From July 2025, fruit and vegetables will also have to have food labels.

The government has said the labels are needed “to ensure no incentive arises for businesses to avoid placing goods on the Northern Ireland market”, and that those in Northern Ireland have the same access to goods in the rest of the UK. Food producers, manufacturers and retailers have pushed back, saying a UK-wide approach will heap extra costs on to businesses and result in higher prices for consumers.

The Food and Drink Federation (FDF) has estimated the extra labelling could cost the industry up to £250m extra a year. Rod Addy, the director general of the Provision Trade Federation, said legal action was being discussed by several bodies as a viable option, if the government failed to engage. “We are not launching a legal challenge yet but it is being discussed and considered as a serious possibility,” he said

John Whitehead, the director of the Food and Drink Exporters Association, said a legal challenge had been discussed by trade bodies as a last resort, but they wanted to “work with, rather than fight the government”. A representative from a third trade body, which preferred not to be named, said: “We want to work with government to find sensible alternatives to the ‘not for EU’ labelling proposal, that meet government and DUP aims and work for business, and we think these exist. “However, as you would expect, we’re also taking professional advice, including legal advice, given the costs and other risks to our sector of the government’s proposals.”

The main concerns from industry are around the upheaval to production the changes will create, with many having to run two separate production lines for products for the EU and UK. The Food and Drink Federation (FDF), which represents more than 1,000 manufacturers, has written to the Cabinet Office minister, Steve Baker, saying the labelling plans would hit exports and could lead to higher food prices. It also said the new regime would make investment in UK food and drink producers much less attractive, saying some overseas investors had already paused plans because of the changes.

Peter Hardwick, the trade policy adviser at the British Meat Processors Association, said: “That consultation has been published and states that: ‘The government is legislating to confirm that labelling requirements on agrifood products are applied across GB, to ensure no incentive arises for businesses to avoid placing goods on the NI market.’ “That doesn’t sound like a consultation to me. It is, in effect, a glorified impact assessment.”

A government spokesperson said: “These measures will help ensure that consumers in Northern Ireland have access to the same goods as those in the rest of the United Kingdom, safeguarding the UK internal market and the operation of the Windsor Framework, and preventing the diversion of products. Businesses have already begun to apply Not for EU labelling in Great Britain. “We are currently carrying out a consultation seeking stakeholder views and evidence on how best to implement the GB labelling requirements as effectively as possible. This will consider exemptions or additional support, such as for small businesses.”

SCRAPPING post-Brexit “not for EU” labelling on food and copying Scottish Government funding for suppliers are two key recommendations for the UK Government in a major new “manifesto” from a top industry body. The Food and Drink Federation (FDF), which represents giants of the industry including Coca-Cola, Nestlé, Mars, Kellogg’s, and Cadbury as well as more than 1000 others, called for the UK Government to act to reverse an “alarming downturn” in investment in the sector.