UK government attracts food industry ire over delay of new rules on EU imports

UK industry body The Food and Drink Federation has accused the Government of helping the country’s competitors after it announced a delay in implementing new post-Brexit import controls on food products entering from the EU.

New controls were due to be implemented from 1 October but in a statement issued today, the UK said the requirement for pre-notification of agri-food imports will now be introduced on 1 January 2022. The new requirements for export health certificates will be introduced on 1 July next year.

UK Cabinet Office Minister Lord Frost – who is leading the country’s post-Brexit negotiations with the EU – blamed the Covid-19 pandemic and the pressure on supply chains for the delay. The FDF has criticised the Government for the lateness of the announcement.

Lord Frost said: “The Government initially announced a timetable for the introduction of the final stages of those controls on 11 March. The Government’s own preparations, in terms of systems, infrastructure and resourcing, remain on-track to meet that timetable.

“However, the pandemic has had longer-

lasting impacts on businesses, both in the UK and in the European Union, than many observers expected in March. There are also pressures on global supply chains, caused by a wide range of factors including the pandemic and the increased costs of global freight transport. These pressures are being

especially felt in the agri-food sector.”

However, Ian Wright, the FDF’s chief executive, said: “Many food and drink manufacturers will be dismayed by the lateness of this substantial change.

“Businesses have invested very significant time and money in preparing for the new import regime on 1 October 2021. Now, with just 17 days to go, the rug has been pulled. This move penalises those who followed government advice and rewards those who ignored it.”

US to require larger firms to mandate Covid-19 vaccines, negative tests

The US government is working on new rules that require companies of a certain size to ensure staff are fully vaccinated against Covid-19 – or test negative for the virus weekly.

Announcing a new plan to curb the country’s case rate, which is at around levels seen in January, President Biden implored Americans to get the jabs, and private companies will be expected to play their part.

According to the US government, almost 80 million citizens eligible to be vaccinated have not yet had their first shot.

Under new rules drawn up by the US Department of Labor, companies with at least 100 staff will have to ensure their workforce is fully vaccinated or require any unvaccinated employees “produce a negative test result on at least a weekly basis before coming to work”, the White House said in a statement.

More than 80m workers will be affected by the requirement, the White House added.

“The vast majority of Americans are doing the right thing,” President Biden said. “Nearly three-quarters of the eligible have gotten at least one shot. But one quarter has not gotten any – that’s nearly 80m Americans not vaccinated. In a country as large as ours, that’s a 25% minority. That 25% can cause a lot of damage. And they are.”

He added: “What more is there to wait for? What more do you need to see? We’ve made vaccinations free, safe and convenient,” We’ve been patient but our patience is wearing thin and the refusal has cost all of us. So please do the right thing.”

August saw two US majors, Tyson Foods

and Kraft Heinz, announce vaccine mandates for staff.

US labour shortage “tougher than I ever remember” – Campbell Soup CEO

The chief executive of Campbell Soup Co. has said the US labour shortage affecting food manufacturers and other industries is “one of the toughest moments” in memory.

Mark Clouse made the remarks in a chat with analysts to discuss the soup and snack maker’s fourth-quarter and full-year results as Campbell and its peers grapple

to protect profit margins from inflation linked to higher commodity, freight and packaging costs.

While Covid-19 has led to some absenteeism from sickness and contributed to the current labour shortage, other observers have said it is also due to a longer-term problem of a lack of skilled workers or even too generous unemployment benefits.

Clouse provided insight into the labour crisis with another related comment: “I would say consistent with many of my peers, the labour challenges that we’re seeing are certainly tougher than I ever remember. We’re running about two times our normal vacancy rates and as a translation into what that means, think about it as around somewhere in the neighbourhood of 6% of our positions that are open, either vacant or absent, and that

is making it tougher to fully meet the [consumer] demand.”

The labour shortage is one aspect that Clouse said investors need to consider from its financial guidance for the 2022 fiscal year. Inflation is another as Campbell and its US food counterparts push up prices for consumers and take other measures such as productivity improvements and cost savings to temper the impact.

“The company expects core inflation of high single-digits for the year with a more pronounced impact in the second half, which will partially mitigate the second-half recovery,” Campbell noted in the results commentary in terms of the top-line sales outlook.

PepsiCo unveils “end-to-end” sustainability project for "better planet"

PepsiCo has set out a strategic business policy with sustainability at its core to “create growth and shared value” across the US group’s operations.

The Frito-Lay snacks maker described Pep Positive (pep+) as a “strategic end-to-end transformation” project encompassing “three pillars” of “positive agriculture, [a] positive value chain and positive choices”.

The company said it will seek to “build a circular and inclusive value chain” in its efforts to achieve net-zero greenhouse gas emissions by 2040 and become “net-water-positive” by 2030. PepsiCo plans to introduce a new goal to reduce the use of virgin plastics by 50% per serving by the

end of the next decade.

Chris Daly, the chief sustainability officer for PepsiCo’s operations in Europe, told Just Food: “The pandemic has accelerated changing consumer and customer behaviours for the long run. Consumers are more aware of the companies behind the brands and our impact on the environment. We need to deliver our long-term growth and profit, while meeting societal expectations for the planet and people.

“The growth of sustainable products and brands has been outpacing [the] market average and is poised for further acceleration around the world in the coming years.

“Pep+ is also about building resilience in our supply chain. We need to continue to implement sustainable solutions that protect our business from the growing threat of climate change, resource scarcity and increasing costs of doing business.”

PepsiCo’s statement noted “positive

agriculture” will seek to promote “regenerative practices” across its approximately seven-million-acre agricultural footprint.

The company’s “positive value chain” programmes include previously-announced targets to, for example, achieve “net-zero emissions” by 2040. 

Under the “positive choices” banner, PepsiCo will aim to introduce more plant-based proteins, nuts and seeds, and whole grains, that are “better for the planet and people”.

Brussels lays down new rules on cadmium, lead levels in food

Food manufacturers operating in the EU are to face new laws governing the levels of cadmium and lead.

By the end of the month, the European Commission plans to introduce new maximum levels for the two “carcinogenic contaminants” in food.

The new rules for lead would be introduced on 30 August and for cadmium a day later, the Commission said in a brief statement.

Brussels pointed to the potential presence of cadmium in foods such as fruits, vegetables, cereals and oilseeds – and the presence of lead in spices, salt and in foods for infants.

An example of a change in the limits is the reduction in the level of lead allowed in infant formula marketed as powder, which is being reduced from 0.050mg per kg wet weight to 0.020mg per kg.

Stella Kyriakides, the EU’s Health and Food Safety Commissioner, said: “We know that an unhealthy diet increases the risk of cancer. Today’s decision aims to put consumers at the forefront by making our food safer and healthier, as we committed to under the European plan to fight cancer. It is also a further step in strengthening the European Union’s already high and world-class standards in the EU food chain and providing safer, healthier and more sustainable food to our citizens.”

Kraft Heinz, former execs charged by SEC over improper accounting

The US Securities and Exchange Commission has charged Kraft Heinz and two of the food major’s former senior executives over false accounting.

Kraft Heinz and two ex-employees – former COO Eduardo Pelleissone and former chief procurement officer Klaus Hofmann – engaged in “improper expense management practices that spanned many years”, Anita Bandy, associate director of the SEC’s division of enforcement, said.

In a statement, the SEC said Kraft Heinz “engaged in various types of accounting misconduct” between 2015 and 2018. The ketchup and soup giant booked unearned discounts from suppliers and maintained false supplier contracts, the SEC said, which “improperly reduced the company’s cost of goods sold and allegedly achieved cost savings”.

The moves led to the Oscar Mayer meats maker reporting “inflated adjusted EBITDA”. In June 2019, after the SEC started its investigation, Kraft Heinz restated its financials, correcting $208m in improperly-recognised cost savings from a total of nearly 300 transactions.

Four months earlier, Kraft Heinz reported a $12.6bn fourth-quarter loss and a $15.4bn writedown on certain assets – and, at the same time, revealed the SEC had issued a summons the previous October amid a probe related to purchasing and accounting practices.

“Investors rely on public companies to be 100% truthful and accurate in their public statements, especially when it comes to their financials. When they fall short in this regard, we will hold them accountable,” Gurbir Grewal, director of the SEC's division of enforcement, said.

Under the terms of an agreement with the SEC, Kraft Heinz will pay a penalty of US$62m, without admitting, nor denying, the regulator’s findings.

Pelleissone is to pay disgorgement and prejudgment interest of just over $14,211 and a penalty of $300,000. Without admitting or denying the SEC's allegations, Hofmann is to pay a penalty of $100,000 and will be barred from serving as an officer or director of a public company for five years. The settlement with Hofmann is subject to court approval.