Compliance is just the beginning – Transparency will be the new normal

7th juillet 2015
Par Chris Morrison

Compliance-credited-to-U.S.-Department-of-Agriculture-on-Flickr[1]At the end of last year new regulations came into place on food labelling in the EU called the Food Information for Consumers Regulation (FIR). While retailers have put the hard work in to comply with this most recent standard, the lesson for retailers both in the EU and also worldwide is that they need to be ready for any future changes in demands to avoid unnecessary cost and disruption. Fluidly sharing information between all parties can allow retailers and manufacturers to better manage current compliance requirements, as well as stay flexible, whatever the future holds.

Provenance is king

While FIR originally mandated country of origin labelling for primary ingredients and clearer labelling of allergens on packaging, the EU has backed out of plans to make country of origin of “minor meats” and dairy products mandatory. The justification for this is that the benefits of these new labelling requirements would be outweighed by the costs of putting it into practice, and that the industry should instead look to voluntary methods. While this might fall short of the transparency initially promised to consumers, it’s also an opportunity to differentiate for those companies with an innovative approach. Retailers and manufacturers that have already implemented collaborative methods of working can easily share information through the supply chain and use that to champion quality and provenance to consumers.

A bad reaction

One of FIR’s legal obligations for retailers and manufacturers is for information on allergens to be more clearly labelled on food products. According to some of our own recent research, consumers were confused which products had a high risk of containing nuts and which products have been labelled as “may contain nuts” just to protect the interests of the food producer. The ‘nuts for spices’ crisis has shown that, as well as confusion, those with allergies can be severely affected by fraud from unethical food producers. The industry needs to verify suppliers’ credentials and show that information has been accurately shared through the supply chain in order to alleviate consumer concerns.

Risky business

FIR also showed that the EU now recognises the lack of transparency in the supply chain. While retailers face fines for not complying with the new legislation, this is no longer the only risk confronting them. Lack of transparency can severely harm consumer trust in a retailer’s brand, since a single recall can cause irreparable damage to reputation and drive customers to the competition. The industry needs to create complete visibility into the supply chain, in order to keep one step ahead of legislation; retain consumer trust; and meet whatever challenges the global supply chain poses in future.

While FIR was a milestone in transparency, it was just the beginning. Retailers and manufacturers now need to prepare for a new era where transparency is the norm. Without transparency, risks become greatly increased and the compliance problems of the past will look like mere headaches by comparison.

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