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Speech - John Luxton: Capitalising on Food Safety

OPENING ADDRESS: HON JOHN LUXTON

New Zealand Institute of Food Science

and Technology Symposium

The Plaza International, Wellington 1 July 1999

(check against delivery)


Ladies and gentleman. It is a pleasure to open your 1999 Symposium, "Capitalising on Food Safety".

As well as being one of our most exciting and innovative industries, the New Zealand economy is heavily dependent on our trade in food.

 Around 65,000 farms produce foodstuffs.
 More than 35,000 businesses - from the small takeaway bar on the corner to huge export meat companies - are licensed to prepare and sell food products.
 Food and beverage accounts for more than 50% of our export earnings.

Our domestic consumers; consumers in our export markets and their Governments and our ever increasing number of tourists, have every right to expect that New Zealand produced food is safe. Making sure this happens is a joint responsibility for Government and for your food industry.

As your draft programme noted, I had planned to speak today about the new Food Assurance Authority.

The democratic process being what it is, the law change proposed to give effect to the current proposal was not supported at the Select Committee stage. A number of issues have been raised through the Select Committee process which the Government wants further work to be done on. Ministers are continuing to look into how best to progress the issue of a Food Assurance Authority and further policy work is being carried out.

The idea of a single food agency was broadly supported. I am hopeful we will still be able to implement this in due course, as an important first step in reducing the duplication of government intervention in food regulation that has been a major problem, and compliance cost, with the present system.

I intend to outline what we are planning to achieve by the creation of a single food agency.

As food scientists and technologists, your role is increasingly important. Not only are your professional skills needed to ensure food is safe and meets consumer expectations, but it will be your innovative ideas that will move the New Zealand trade in food from one based largely on commodities to one based on high value consumer demanded manufactured products. I would like to touch on this as well.

Food Safety

Recent lessons from events such as the United Kingdom's BSE problems and the Belgian dioxin contamination scare, show us only too clearly how vulnerable food producing countries are to lapses in food safety.

Consumers (and sometimes the regulators who act on their behalf) respond dramatically to fears - whether real or perceived - about the safety of foodstuffs. Events have a high profile and it can take many years before trust and confidence in both the products (and sometimes the regulators) can be restored.

Sometimes problems with one product result in reactions to all products from a country.

Our reputation as a producer of good quality food, can be damaged irreparably by a single event.

In avoiding such situations, Government has a legitimate role to play in:

-protecting consumer health and safety; -preventing fraud and deception; and -facilitating trade.

Our regulatory framework is designed to meet these demands. The "New Zealand Inc" food brand, currently enjoys an enviable worldwide reputation. We must protect it.

But I think that all at this Symposium would agree, that the first responsibility for ensuring that food is safe, rests with the industries producing and manufacturing it. They have a role in implementing standards and reliable trace-back, and making sure that consumers' needs and expectations are met.

Likewise distributors and retailers have to store and handle food properly. So do the restaurants. And so do consumers. Internationally we are seeing further pressure for evidence of compliance with standards and such standards being set at increasingly higher levels.

Government cannot maintain the regulatory framework alone. All the players need to work in partnership. But Government must provide basic legislation, sensible standards, monitoring and evaluation and guidelines to manage the risks inherent in food production.

There is a powerful public good aspect to the production, sale and export of safe food. Such public good relates to two aspects. The regulatory framework set by government, and the continued growth of our economy that can be gained by increasing the production and sale of safe products.

Risk Management Programmes

While we have to accept that there will always be risk in food production, a key component of the Government's food safety agenda is the legislative change to risk based management systems. These are the voluntary food safety programmes under the Food Act, risk management programmes under the proposed Animal Products Act, and product safety programmes under the Dairy Industry Act.

Although a review of the Food Act is proposed, the Food Hygiene Regulations will remain in force and food safety programmes remain a voluntary alternative until that is completed. The introduction of food safety programmes was a major advance in food safety in this country and the review of their introduction on a wider basis, will remain a priority. I fully expect this to take place in the near future and to be carried out in consultation with all interested parties.

Some have expressed concern that small businesses will find the introduction of food safety programmes an expensive imposition.

The mechanism to address this issue is already provided for within the Food Act itself. This recognises industry codes of practice as a legitimate starting point for developing individual food safety programmes, thereby substantially reducing the start-up work any industry needs to do.

A key component of the move to risk based management programmes, will be establishing the industry codes of practice and supporting systems to allow all businesses to move towards risk based management in a timely fashion.

The other major piece of legislation that moves to risk based management systems, is the Animal Products Bill. This Bill once enacted will require all animal products to be 'fit for their intended purpose'. Products must then meet the appropriate New Zealand standard. Potentially products could be covered from production to export. This is because the optimal point at which a hazard or risk should be managed may be anywhere along the chain from paddock to shopping trolley.

It will be vital that industry work with the Government to ensure that appropriate standards are set for products and their particular use. Such involvement will ensure that compliance costs are keep to the minimum necessary to ensure safe products reach consumers here and in our international markets.

The move to risk based management systems in the food and primary products sectors will occur regardless of whether or not a single food agency is established. The only variable being the timing of the transition.

There is clear anecdotal evidence from overseas showing that a move to a risk based management system, such as a food safety programme, necessitates an examination of all aspects of how a business operates.

This in turn leads to improvements, efficiency gains and increased profitability far beyond those directly connected with food safety. A clear demonstration that risk management programmes can be beneficial for the bottom line.

Single Food Agency

As I said, I had hoped today to introduce the new MAF Food Assurance Authority. While MAF has separated the biosecurity and food assurance functions of its Regulatory Authority and established a Food Assurance Authority, the decision to transfer the domestic food responsibilities from the Ministry of Health has not been able to be progressed at this time. It has been delayed with election year politics.

The formation of a single agency will when it occurs, see all of New Zealand's food related legislation administered from one agency. At the present time, expertise in food safety is spread across MAF and the Ministry of Health and is divided largely along domestic and export lines. Such an agency, when established, will have no such division.

As soon as the new food agency (in whatever form) is established it will need to get to grips with ensuring all New Zealand food legislation is risk-based, cost effective for both government and industry and enforced to the level appropriate to maintain consumer and our trading partners confidence.

It is my firm belief that a single agency provides benefits in three ways:

* Firstly, by improving the quality of the regulatory framework within which business operates, monitoring the outcomes to ensure public safety and market access are being achieved, and taking regulatory action when necessary - rather than prescribing how things should be done;

* Secondly, by improving the economy generally through the flow-on effects of reduced Government intervention in business, a reduction in the costs associated with increasing food-borne illness, and an anticipated increase in general business profitability as businesses take up risk-based management; and

* Thirdly, through reduced compliance costs for businesses.

There is little doubt that larger business and in particular export businesses will benefit by having one regulatory agency responsible for administering all food legislation.

The food and beverage sector contributes about 50% of all exports leaving New Zealand and is valued at $9.7 billion. Any change must not in any way put this at risk in our export markets. This sector currently faces compliance costs estimated to be between 1 and 3% of turnover, namely $97 to $291 million. A decrease in compliance costs of as little as half of 1% can be enough to make export profitable.

A vision of the New Zealand food sector where there is no legislative differentiation between the export and domestic sectors will allow all New Zealand food business to take advantage of whatever opportunities come their way.

We are all aware of the impact of several incidents that have occurred overseas. For example, the e-coli outbreak in Scotland, in 1997, that led to over 20 deaths and was traced to poor handling practices by a butcher. Or the outbreak in Japan, in 1996, that saw over 9000 school children affected after eating e-coli contaminated radish sprouts. Or closer to home, the Garibaldi incident in South Australia, in 1995, that saw one child dead and several hospitalised after eating e-coli infected mettwurst sausage.

The impact of one such incident on New Zealand Inc's international reputation as a producer of safe foods is inestimable.

The costs of food-borne illness is substantial. Information from a study being completed by the Ministry of Health indicates that the costs of human illness, (that is the medical costs of treatment, the value of lives lost and the cost of lost productivity when people are off work), amount to around $45 million per annum.

And that this is a conservative estimate. It covers only a proportion of all food-borne disease, it does not include the overhead costs of providing the health infrastructure that is required to minimise the effects of food-borne disease, nor does it cover the sometimes significant industrial and community impact of a major disease outbreak.

While the data on which to base estimates of these wider costs is not readily available, taking these issues into consideration could raise the estimated costs of food-borne illness by a further $64 to $142 million per annum. When you add this to the more easily identified costs we have a cost to the New Zealand economy in the order of $109 to $187 million or around 0.1 to 0.2% of GDP. Any steps we can take to reduce the incidence of food-borne illness in this country must have an economic benefit.

The provision of accurate and understandable information to consumers has become a vital factor in ensuring products are marketable. For manufacturers and retailers to be able to satisfy the demands made on them, primary producers must be able to provide assurances that the raw ingredients they provide meet certain specifications.

For example the origin of certain products, including their genetic makeup, how such makeup was achieved and the production methods used including pest and disease control methods, are all issues that many end users want to be assured about. Which brings me to the subject of genetically modified food.

GMFs

The debate surrounding genetically modified foods has gained some momentum in New Zealand. New Zealand is a world leader in some aspects of biotechnology research and should hope to remain so. Genetic modification is one small area of biotechnology, offering opportunity and risk to the food sector.

Food producers need to learn how to use the opportunities presented by new biotechnologies, without endangering the trust and faith of consumers in the process or the foods produced.

It is clear that consumers want choice, and to be treated with respect. Consumers want to know what they are eating which is where labelling comes in. That is why the Government supports a system that is practical, affordable and meaningful.

But there is another aspect to the GM debate that should not be overlooked. All food industries have over time been selectively breeding or genetically modifying for preferred characteristics. Many major food types also currently contain protein which some in the population may be allergic to which are not singled out for labelling at present. And what about our restaurant meals? What were the actual ingredients?

We need to ensure that any labelling system is consistent, sensible, workable and meets our international obligations and our consumers' needs. The current GM debate is largely a non-issue in the US but a real political issue in the UK, Austria, Germany and some of the Nordic countries and is potentially seriously damaging these countries' agricultural competitiveness. Emotion has overtaken much of the debate.

I hope for a more balanced public debate in due course and as, food scientists and technologists you have an opportunity - and, I believe, an obligation - to engage in the debate. In New Zealand we must consider these issues and agree on the level of protection or safety we require in order to capture the benefits science will offer in the future. This requires an openness and education by the food sector and a preparedness to listen, and to challenge misinformation. You are well placed to contribute to this. Decisions need a good science base.

Innovation

New Zealand's export food products are becoming more sophisticated as we move away from commodities. In recent decades a great deal has been said about the advantages of adding value versus the production of commodities.

In terms of trade and market access, the benefits are compounded because trade barriers tend to be much lower for products with a higher added value content. Generally speaking, the more sophisticated the composition of our food exports, the better the market access. For instance, many specialist dairy products enjoy open access to Europe, the United States and Japan - markets where quotas are generally applied to commodities.

As food scientists and technologists, your role is to develop the ideas and products that will be demanded by consumers everywhere. We have fine agricultural, horticultural and seafood products and excellent processors. We need people with bright ideas and the enthusiasm to turn our commodities into market successes. Not just for export, but for our domestic consumers as well and of course, food is of increasing importance for the thousands of people who visit New Zealand each year.

This is a point I would like to touch on briefly because the role our food industry plays in this rapidly expanding industry is not always noted. Tourism is growing rapidly and providing employment and income for thousands of people. Tourists no longer come to New Zealand just for our scenery. Increasingly, they are coming to experience and enjoy our food and wines. From backpackers hostels to exclusive lodges, sampling the marvellous products New Zealand has to offer (and which we often take for granted) is part of the travel experience.

I foresee a time when, for many tourists, a visit to New Zealand will have many of the same attractions as a stay in Tuscany or Provence - unique food and fine wines. "Pacific Rim" is rapidly becoming one of the most popular cuisines worldwide.

With innovative ideas from our food scientists and technologists, we have opportunities to turn frozen carcasses, blocks of cheddar and whole milk powder into exciting products for new generations of consumers.

I wish you well with your Symposium - you have an important part to play at the heart of several of New Zealand's major industries. I hope you also have a chance while you're here to "capitalise on our Capital city and its exciting (and safe) food experiences".

ENDS


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