Explanatory Memorandum to the Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 This Explanatory Memorandum has been prepared by the Food Standards Agency and is laid before the National Assembly for Wales in conjunction with the above subordinate legislation and in accordance with Standing Order 27.1. Member‟s Declaration In my view the Explanatory Memorandum gives a fair and reasonable view of the expected impact of the Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012. I am satisfied that the benefits outweigh any costs. Lesley Griffiths AM Minister for Health and Social Services, one of the Welsh Ministers 4 July 2012

Explanatory Memorandum for the Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 1. Description The Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 will provide for the enforcement in Wales of certain directly applicable EU Food Hygiene Regulations1. The SI also provides for any reference to the Annexes in those EU Food Hygiene Regulations to be ambulatory. It also contains provisions for the form of a special health mark for meat from animal subject to emergency slaughter. 2. Matters of Special Interest to the Constitutional and Legislative Affairs

Committee None 3. Legislative Background The Regulations are made in exercise of the powers conferred on Ministers by section 48(1) of the Food Safety Act 1990 and section 2(2) of and paragraph 1A of Schedule 2 to the European Communities Act 1972. The Welsh Ministers have been designated for the purposes of that section in relation to measures relating to food (including drink) including the primary production of food. This instrument is subject to the negative procedure. 4. Purpose and Intended Effect of the Legislation The Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 will provide for the enforcement in Wales of a number of directly applicable EU Food Hygiene Regulations (as detailed in the following section) which provide amendments to the Annexes of existing EU Food Hygiene Regulations, which largely provide specific rules for the production and handling of food of animal origin or for its importation. The following EU Regulations amend existing EU Food Hygiene Regulations in the following way: Plant Inspection Assistants (PIAs) voluntarily taking over some activities from meat hygiene inspectors in poultry and rabbit meat slaughterhouses To allow PIAs to be trained and qualified to the satisfaction of the designated Competent Authority to carry out official control duties in rabbit and poultry slaughterhouses. The Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 will provide for the enforcement in Wales of Regulation (EC) 1021/2008, amending Annexes I, II and III to Regulation (EC) 854/2004. Regulation (EC) 1021/2008 makes permanent the exemption provided for by Regulation (EC) 2076/2008 which allows slaughterhouse 1 Regulations (EC) 1020/2008, (EC) 1021/2008, (EC) 1162/2009 & Regulations (EU) 150/2011, (EU) 151/2011, (EU) 1276/2011

staff to be trained to the satisfaction of the designated Competent Authority (the Food Standards Agency (FSA)), to carry out official control duties in poultry and rabbit slaughterhouses without the requirement to pass the same examination as official auxiliaries. This allows the continuation of the practice pre-2006 which had permitted slaughterhouse staff to carry out post-mortem checks of poultry and rabbit meat under the supervision of the Official Veterinarian (OV) on a voluntary basis, if they were of a standard acceptable to the FSA. The exemption was welcomed by businesses. The objective is to maintain sufficient official controls in slaughterhouses to ensure that public health is protected, while minimising the burden on food business operators and the FSA. Clarifying which establishment can apply ID marks To ensure that the identification marks are applied solely to products handled by establishments within the EU, and not by establishments in third countries. Businesses, consumers and enforcers will be assured that the identification of products of animal origin indicates the establishment where the products were manufactured. EU Food Hygiene legislation ((EC) Regulation 853/2004) sets out requirements for health and identification marking on products of animal origin handled in establishments within the EU subject to approval. These marks are applied solely to products of animal origin manufactured or handled in approved establishments within the EU. The legislation also requires identification markings on products of animal origin produced in countries outside the EU, which can be either then name of the country (whether EU or non-EU), in which the establishment is located, or the two letter code for that country under international standards. Member States reported to the European Commission that confusion was caused by the current wording, which led to some establishments outside the EU using abbreviations for EU Member States on products due for import into the EU. This was not the intention of the legislation. This Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 will provide for the enforcement in Wales of certain provisions of Regulation (EC) 1020/2008 which provide clarity that abbreviations for EU Member States should only be included in the identification markings for products of animal origin manufactured by approved establishments within the EU. Certification of the correct slaughter and bleeding of farmed game To allow food business operators (FBOs) to carry out certification of the correct slaughter and bleeding of farmed game, including the date and time of slaughter at the place or origin, subject to the food business operator or their slaughterer having had approved training, rather than it being necessary for this to be carried out by an Official Veterinarian or Approved Veterinarian (OVs or AVs).

This Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 will provide for enforcement in Wales of certain provisions of Regulation (EU) 150/2011 and Regulation (EU) 151/2011 which amend the EU food hygiene regulations (Regulation (EC) 853/2004 and Regulation 854/2004 respectively), to allow food business operators to certify that the correct slaughter and bleeding of farmed game has taken place and the date and time of slaughter. These Regulations require the food business operator or those carrying out the slaughter and bleeding of the animals to be competent to perform these tasks. They also require regular checks by OVs or AVs to assess the performance of those who shoot and bleed farmed game on the farm. Regulation (EU) 150/2011 and Regulation (EU) 151/2011 also make some amendments to the requirements for wild game. They allow the whole heads of animals susceptible to Trichinella infestation, such as wild boar, to be sent to an establishment for producing a hunting trophy, pending the result of the required test for Trichinella, provided that there is full traceability. They also allow for a single declaration by a trained person to cover a number of large wild game animals, rather than requiring a declaration for each animal to be provided. The declaration indicates that no evidence has been found following examination after killing that the meat presents a health risk and that the animal displayed no abnormal behaviour before it was shot. The FSA considered that the rules covering the slaughter of farmed game in Regulation (EC) 853/2004 were disproportionate when seen with comparative rules governing wild game and the domestic slaughter of cattle, sheep, goats and pigs, which are killed with no veterinary involvement in the assessment of the correct slaughter or bleeding. All farmed deer slaughtered on-farm in the UK are shot by trained marksmen/women holding a recognised qualification which includes the ability to bleed deer in the correct manner. An additional feature of the new legislation requires these trained marksmen/women to be authorised in the same way as slaughtermen working in an abattoir. This could be verified by a veterinarian and subject to a regularl check to assess the performance of these marksmen/women. The Regulation would require those who shot and bled game on farm to hold a certificate of competence and be authorised in the same way as abattoir slaughtermen to carry out slaughter operations. This reflects the requirements in the new EU protection at time of killing Regulation (1099/2009) which come into force on 1 January 2013 and which will require the authorisation of all those who slaughter animals for human consumption whether they work in a slaughterhouse or on farm. The number of on-farm slaughter establishments affected by the new Regulations is set out in the table below by country and size of business.

Number of on-farm slaughter establishments by country

Location/ Firm Size

Micro <20 Small Medium Large Total

England 25 0 6 0 0 31

Wales 0 0 0 3 0 3

Scotland 9 0 1 0 0 10

GB 34 0 7 3 0 44 Note: Sizes are defined by number of employees per premises as follows: Micro – less than 10 employees; < 20 – 10-20 employees; Small – 20-49 employees; Medium – 50-249 employees; Large – more than 250 employees. Distribution of size of business is based on an estimate using FSA Operations data on approved establishments and previous consultation responses.

Requirements for health marking To provide clarification for the correct and consistent implementation of the requirements for health marking of carcases, for those importing meat into the EU from slaughterhouses outside the EU. The application of the health mark on meat is an important part of the traceability system, as it incorporates the plant approval number and the country of origin which identifies the place of production. The health mark is the official control that indicates the meat comes from the body of an animal that has been subject to ante and post mortem inspection in accordance with the Regulation (EC) No.853/20042, and when there are no grounds for declaring the meat unfit for human consumption. This SI provides for the enforcement in Wales of Regulation (EC) 1021/2008 which clarifies the requirements for the health marking of carcases of meat which are contained in Chapter III of Section I of Annex I to Regulation (EC) No 854/20043, where there are no grounds for declaring the meat unfit for human consumption. The Commission considers that some of these requirements have created confusion in the identification of products produced within the EU and products produced outside the EU. Regulation (EC) 854/2004 requires slaughterhouse operators to apply the health mark on carcases from domestic ungulates (hoofed animals) such as cattle, sheep, goats, pigs and horses, farmed game mammals (other than rabbits, hares and rodents), and large wild game that have passed ante and post-mortem inspection and are, therefore, considered fit for human consumption. Annex I, Section I, Chapter III of Regulation (EC) 854/2004 sets the requirement for

health marking of carcases declared fit for human consumption.

Currently point 3 (c) of chapter III of Annex I reads: “(c ) when applied in a slaughterhouse within the Community, the mark must include the abbreviation C, EC, EF, EG, EK, EY, ES, EÜ, EB or WE.”

2 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2004:226:0022:0082:EN:PDF 3 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2004:226:0083:0127:EN:PDF

The Regulation replaces paragraph 3 of Chapter III of Section I, point (c) with the following: “ (c) when applied in a slaughterhouse within the Community, the mark must include the abbreviation C, EC, EF, EG, EK, EY, ES, EÜ, EB or WE.

Those abbreviations must not be included in marks applied on meat imported into the Community from slaughterhouses located outside the Community.” Requirements for samples from class B live bivalve mollusc production areas To allow Competent Authorities to classify live bivalve mollusc (LBM) production areas as class B, as long as 90% of samples do not exceed 4,600 E.coli/100g of flesh, and the remaining 10% of samples do not exceed 46,000 E.coli/100g of flesh. This Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 will provide for the enforcement in Wales of certain provisions of Regulation (EC) 1021/2008 which amends Annex II of Regulation (EC) 854/2004 on official hygiene controls to make permanent the criteria for Class B LBM production areas. This criterion reflects that the hygiene legislation extant prior to 1 January 20064, when Regulation (EC) 854/2004 did not include the provision for the 10% non-compliant samples. This effectively required 100% of samples to meet the 4,600 E.coli limit. The amendment corrects an omission to the EU hygiene legislation which had resulted in a requirement for 100% of Class B samples to meet 4,600 E.coli limit would have been disproportionately burdensome for industry. Regulation (EC) 1021/2008 also sets a new requirement for an upper level of 46,000 E.coli/100g flesh which the remaining non-compliant 10% of samples must not exceed. The change will mean legislative certainty for stakeholders by making permanent the 90% requirement in Class B mollusc production areas, which is seen as proportionate and adequate to protect public health. The Class B LBM production area standard has been applied continuously since the introduction of the EU Hygiene legislation in 2006, even when it became apparent that the 90% provision had been omitted. The Regulation rectifies that omission. Harvesting areas are classified by the level of E.coli contamination found in shellfish sampled from that site. These areas were classified in Regulation (EC) 853/2004 as set out below, and it is against the limit for class B areas below that the amendment is compared:

Class A – shellfish contains less than 230 E.coli/100g flesh; can be placed on the market for direct human consumption.

4 Council Directive 91/492/EEC of 15 July 1991 laying down the health conditions for the production and the placing on the

market of live bivalve molluscs. This can be viewed at: http:/ec.europa.eu/food/fs/sfp/mr/me02_en.pdf

Class B – 90% of shellfish contains less than 4,600 E.coli/100g flesh; must be purified or relayed before placing on the market for direct human consumption.

Class C – shellfish contain less than 46,000 E.coli/100g flesh; must be heat treated using permitted method or relayed for a longer period before being placed on the market for direct human consumption.

Harvesting is prohibited from areas exhibiting levels above the class C limit. There are currently 384 classified beds in England and Wales (54 in Wales), of these 339 (43 in Wales) meet the class B status (87%). It is envisaged that all of these would have been affected (i.e. by down grading to Class C) were the 100% provision to become permanent. Criteria for platelet count testing of raw cows‟ milk To ensure that food business operators FBOs manufacturing dairy products from raw cows‟ drinking milk will not have to carry out testing to establish the platelet count levels of milk prior to processing, as long as the milk is processed within the time scales specified in the FBOs own HACCP procedures. This Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 will provide for the enforcement in Wales of certain provisions of Regulation (EC) 1020/2008 which amends Annexe II and III of Regulation (EC) 853/2004 by setting a platelet count criteria for raw cows‟ milk intended for the manufacturing of dairy products that should be required where milk has not been processed within the pre-defined time set out in the HACCP procedures. In addition the same principle applies to heat treated (processed) cows‟ milk intended for the manufacturing of dairy products. This supports the principle that it should be possible to ensure food safety within the provisions of the HACCP procedures providing the age of the milk is taken into account. Enforcing these parts of Regulation (EC) 1020/2008 in Wales will mean FBOs manufacturing dairy products from raw cows‟ milk will continue not to have to carry out testing to establish the platelet count levels of milk prior to processing as long as that milk is processed within the timescales set in their HACCP procedures. Import certificates for „composite products‟ To harmonise the requirements for the importation into the EU of animal health and composite food products, thereby ensuring that all food products which contain products of animal origin (POAO) are subject to the same official controls. The Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 will provide for the enforcement in Wales of certain provisions of Regulation (EC) 1162/2009 which provides for a derogation from Article 6.4 of Regulation (EC) 853/2004, allowing FBOs who import „composite products‟ (i.e. products which contain both products of plant origin and processed products of animal origin) from Third Countries do not have to meet the same official controls as imports of products of animal origin.

The provisions of Regulation 1162/2009:

require that composite products which are imported into the EU which contain any processed meat, and composite products which contain half or more processed milk or fishery or egg product or other POAO content, and composite products which contain less than half milk product which does not meet certain conditions5 will need to be accompanied by a health certificate. This will enhance current food safety measures by ensuring that composite products which are manufactured in third countries are produced to the same hygiene standards as stipulated in EU Regulations for other POAO foods; and

harmonise the public health requirements with the animal health requirements with advantages for the efficacy of enforcement of the animal health rules

Use of clean water with fishery products To allow food business operators to use „clean‟ water (clean sea/fresh water) when handling fishery products, providing measures are in place to ensure this water is not a source of contamination for foodstuffs. Regulation (EC) 852/2004, Annex II, Chapter VII, 1(b) provides for FBOs to use „clean water‟6 with whole fishery products and supply adequate facilities for its availability. The use of clean water on fishery products has been permitted on fishing vessels since the implementation of the consolidated hygiene legislation. It has also been allowed on land based establishments to allow these establishments to adapt progressively. „Clean water‟ is currently defined in Regulation (EC) 852/2004 as including clean seawater and fresh water of a similar quality. As the quality of clean sea water (and by definition therefore clean water) can vary along the coastline, it will not represent a risk to public health if adequate control procedures are put in place by businesses to ensure that the use of such water in these establishments is not a source of contamination. This would be achieved by amending Annex II, Section VII of Regulation (EC) 852/2004 by Regulation (EC) 1019/2008 and Annex III, Section VIII of Regulation (EC) 852/2004 by Regulation (EC) 1020/2008. The Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 will provide for the enforcement in Wales of Regulation (EC) 1020/2008 which allows land based establishments to use clean water when handling fishery products.

5 This where the final products in not shelf-stable at ambient temperature or where they have not clearly undergone in their

manufacture a complete cooking or heat treatment process throughout their substance, so that any raw product is not denatured.

6 The definitions used in this IA relating to water are set out in Regulation (EC) 852/2004, Article2 (h) and (i) respectively:

„clean seawater‟ means natural, artificial, or purified seawater, or brackish water that does not contain micro-organisms, harmful substances or toxic marine plankton in quantities capable of directly or indirectly affecting the health quality of food; and,

„clean water‟ means clean seawater and fresh water of a similar quality.

Temperature of eggs during transportation To allow individual Member States to specify national temperature requirements for the storage and transportation of eggs. This SI will provide for the enforcement in Wales of Regulation (EC) 1020/2008 which allows individual Member States to continue to specify existing national temperature requirements with regard to climatic conditions which prevail in that Member State for the storage and transportation of eggs, where this may be considered necessary „to maintain the eggs in the most hygienic condition‟ as required by Regulation (EC) 853/2004. EU food hygiene regulations (including Regulation (EC) 853/2004), which have applied from 1 January 2006, require eggs to be „stored and transported at a temperature, preferably constant, that is best suited to assure optimal conservation of their hygiene properties‟. However, those Member States which had before 1 January 2006 preferred to transport eggs under temperature requirements laid down in their own national legislation could continue to do so under Regulation (EC) 2076/2005. Since the implementation of Regulation (EC) 2076/2005, the use of national temperature requirements for the storage and transport of eggs has been considered further, and found not to interfere with the food safety objectives described in Regulation (EC) 853/2004. No specific temperature requirements beyond the basic requirements stipulated in Regulation (EC) 853/2004 are in force in Wales and the amendment does not impose any new requirements to be implemented for the storage and transportation of eggs. It is possible that if eggs were exported to another Member State, producers or wholesalers in Wales would need to comply with national requirements of that Member State. Requirements for cracked eggs and their transportation to approved establishments for processing To allow food business operators to be approved to break out cracked eggs and transport the frozen or refrigerated content for processing at an establishment approved for that purpose. Regulation (EC) 853/2004 lays down special hygiene measures for food businesses handling products of animal origin, including, in Annex III, Section X, Chapter II, measures for eggs and egg products. Regulation (EC) 853/2004 also consolidates the previous EC food hygiene legislation that applied to establishments handling food of animal origin, including EC Directive 89/437 on hygiene and health problems affecting the production, and the placing on the market of egg products. Since 1 January 2006, the legal requirements for egg products have been the liquid egg and processed egg content e.g. pasteurised egg yolk, can only be produced by approved establishments. However, the effect of these provisions was to prevent the breaking out (i.e. the removal of the white and yolk) of cracked eggs by

producers and packers for heat treatment at another approved establishment, which was previously allowed. This is a common practice in small and large businesses, because it is very simple and approval requirements are minimal. The Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 will provide for the enforcement in Wales of Regulation (EC) 1020/2008, which allows practices undertaken prior to 1 January 2006 to continue. Importation of fish oils To introduce a further limit for total volatile basic nitrogen (TVB-N) for all fishery products used directly in the preparation of fish oil. Article 10 of EC Regulation 852/2004 establishes that the hygiene of foodstuffs imported into EU Member States from establishments in third countries must comply with the requirements set out in Article 3 to 6 of the Regulation. This means that foodstuffs imported into the EU must have been manufactured under the same requirements as food manufactured in the EU. Due to the lack of marine resources in Europe, the supply of fish oil is almost exclusively dependent upon imports from third countries. Fish oils are mainly imported as crude or semi-refined oils that are refined for human consumption. Fish oils contain Omega 3, and are used mainly in infant food products and food for particular nutritional uses. Prior to January 2006, when the Food Hygiene (Wales) Regulations 2006 came into force, fish oil was not covered by EU legislation on the hygienic production of fish and fishery products, as it was not included in the definition of „fishery products‟. However, in November 2006, Regulation (EC) 1662/2006, Annex II, point 2, (by amending Regulation (EC) 853/2004) introduced specific hygiene requirements as regards the raw material used in the preparation of fish oil for human consumption. The issue was raised at the meeting on the Commission Working Group on Hygiene Legislation held on 19 May 2008, where there was general agreement that the proposed TVB-N parameter of 60 plus a satisfactory organoleptic (flavour, odour, appearance, texture) assessment (with some fish species to have higher limits). The Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 will provide for the enforcement in Wales of Regulation (EC) 1020/2008 which introduces further specific hygiene measures as regards the TVB-N limits for fish oil. The TVB-N parameter is an indicator of protein quality, and the limit is now 60 mg of nitrogen/100g of whole fish products, used directly for the preparation of fish oils for human consumption. Member States may also set limits at a higher level for certain species pending the establishment of specific Community legislation.

Food chain information requirements To provide legislative clarification on the requirements for food chain information (FCI) to accompany animals for slaughter for human consumption to ensure they are implemented consistently between businesses and countries within the EU. The Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 will provide for the enforcement in Wales of Regulation (EC) 1020/2008 which seeks to clarify the requirements for FCI contained in Section III of Annex II to Regulation (EC) 853/2004, as regards the implementation of FCI within the EU and outside the EU. Annex II, Section III of Regulation (EC) 853/2004 lays down specific rules for food of animal origin, requires slaughterhouse operators to „request, receive, check and act upon‟ FCI for poultry, pigs, cattle, sheep and horses and calves sent to slaughterhouses. Regulation (EC) 1020/2008 will amend Annex II, Section III, Point 1 & 3 of Regulation (EC) 853/2004. It aims to replace the word „Food Safety Information‟ with „Food Chain Information‟. This does not introduce any new requirement. Treatment to kill viable parasites in fishery products for human consumption To allow food business operators to adapt the freezing controls applicable to farmed fishery products under certain controlled conditions. The Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 will provide for the enforcement of Commission Regulation (EU) 1276/2011which amends Annex III of Regulation (EC) 853/2004 to allow FBOs to make evidence-based freezing exemptions for farmed fishery products reared under certain controlled conditions. A freezing exemption will be available for farmed fishery products exclusively reared in an environment that if free from parasites, or where FBOs can verify through procedures, approved by the competent authority, that they do not present a health hazard. The introduction of this specific freezing exemption for farmed fishery products will reduce regulatory burdens on the UK fish farming industry and address a long term issue for the UK salmon farming sector which, under the current legislation, is required to freeze raw „ready to eat‟ products derived from farmed salmon such as sushi, sashimi and gravadlax. Research carried out by the FSA in Scotland7 found that the risks to human health from Anisakis nematodes in farmed Atlantic salmon are negligible, a conclusion also reached by EFSA8

following their evaluation of the FSA research. This provides the necessary evidence that will enable FBOs to apply the freezing exemption to farmed salmon. The Commission Regulation maintains the existing national flexibility that allows competent authorities in Member States to authorise a freezing exemption for fishery products when sufficient epidemiological evidence is available indicating that the fishing grounds of origin do not present a health hazard with regard to the presence of parasites, although this now specifically relates to wild catches. Retention of this national flexibility enables the UK to authorise such an exemption for wild catches

7 Petrie, A, et al. A Survey of Anisakis and Pseudoterranova in Scottish fisheries and the efficacy of current detection methods:

Food Standards Agency in Scotland, Study S14008, 2007 8 http://www.efsa.europa.eu/en/scdocs/doc/1543.pdf

provided the fishing grounds of origin do not present a health hazard with regard to the presence of parasites.

Freezing requirements for cold smoked fishery products have also been updated to ensure they are risk-based without compromising public health protection and extended to cover all species of fish that have not undergone a heat treatment of at least 60°C, unless there is sufficient evidence of negligible risk to allow a freezing exemption to be applied. Previously, Regulation (EC) No. 853/2004 only required that cold smoked herring, mackerel, sprat and wild Atlantic and Pacific salmon needed to be frozen before consumption. There is no change in the requirements applicable to marinated/salted fishery products. They will continue to be required to undergo a freezing treatment if the processing of such products is insufficient to kill viable parasites.

The Regulation maintains current documentation requirements for fishery products that are subject to a freezing treatment. These must be accompanied by a document from the FBO performing the freezing treatment stating the type of treatment they have undergone, except when supplied to the final consumer. However, the Regulation introduces a new obligation on FBOs to ensure that any wild or farmed fishery products placed on the market without having undergone a freezing treatment to kill parasites originate from a fishing ground or fish farm that complies with the specific conditions set out in the exemptions. This may be met by information in commercial documentation or any other information accompanying the fishery products. Both of these requirements will ensure food business operators maintain traceability throughout the food chain and apply appropriate freezing controls to protect consumer health. Businesses Affected Farmed Salmon UK Salmon Fish Farming Businesses by Country and Size

Micro Small Medium Large Total

England 0 0 0 0 0

Wales 0 0 0 0 0

Scotland 20 5 1 4 30

Northern Ireland

0 0 1 0 1

UK Total 20 5 2 4 31 Firm size is based on the number of employees within an organisation. Micro 0 - 9 employees, Small 10 – 49 employees, Medium 50 – 249 employees and Large 250+ employees Note: totals may not sum due to rounding

Farmed Trout

UK Trout Fish Farming Businesses by Country and Size

Micro Small Medium Large Total

England 128 2 0 0 130

Wales 25 0 0 0 25

Scotland 39 1 0 0 40

Northern Ireland

4 0 0 0 4

UK Total 196 3 0 0 199 Firm size is based on the number of employees within an organisation. Micro 0 - 9 employees, Small 10 – 49 employees, Medium 50 – 249 employees and Large 250+ employees Note: totals may not sum due to rounding

Background information The existing EU Food Hygiene Regulations are directly applicable and have been in force since 1 January 2006. The Regulations apply to all food business operators (i.e. businesses or organisations supplying, handling, producing, transporting or manufacturing food on a regular basis) and to foodstuffs imported into and exported from EU Member States. EU Member States are required to provide enforcement of directly applicable EU Regulations. The EU Regulations are given effect in Wales by the Food Hygiene (Wales) Regulations 2006 (SI. 2006 No.31 (W.5)). Failure to provide enforcement could mean the European Commission raising infraction proceedings against the Member State concerned. In order that amendments to EU Regulations can also be enforced, amendments to the Food Hygiene (Wales) Regulations 2006 are required by the provision of amending national instruments at appropriate times, although the making of the Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012, which contain the ambulatory reference, will mean that this will no longer be necessary in the majority of cases. The Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 also contains a provision laying down the format for the special mark that is applied to the meat from animals that were slaughtered outside the slaughterhouse (emergency slaughter). EU law requires that meat from animals slaughtered away from the slaughterhouse to be marketed only in the country of slaughter and to bear a special health mark. However, the format of such a special health mark has not been specified in EU legislation. Food Hygiene rules contained in Regulation (EC) 852/2004, Regulation (EC) 853/2004 and Regulation (EC) 854/2004. These lay down, respectively, hygiene requirements for all food businesses, additional hygiene requirements for food businesses dealing in products of animal origin, and requirements for the organisation of official controls on products of animal origin for human consumption. Annex III, Section I, Chapter VI of Regulation (EC) 853/2004 sets out the requirements relating to the emergency slaughter of certain animals. Slaughter of an animal outside the slaughterhouse is restricted to an otherwise healthy animal which

has suffered an accident preventing its transport to the slaughterhouse for welfare reasons. A veterinarian must carry out an ante-mortem inspection of the animal prior to slaughter. The slaughtered and bled animal must then be transported hygienically to the slaughterhouse without undue delay. Point 9 of Chapter VI requires that FBOs may not place meat from animals having undergone emergency slaughter on the market, unless it bears a „special health mark‟ which cannot be confused with the health mark provided for in Regulation (EC) No. 854/2004, or with an identification mark provided for in Annex II, Section I to Regulation (EC) No. 853/2004. It also requires that such meat may be placed on the market only in the Member State (MS) where slaughter took place, and in accordance with national law. The „special health mark‟ is both a health mark applied to carcases and an identification mark applied to cut meat and products derived from such meat. This will be made clear to enforcement authorities and interested parties when the Regulations come into force. In the UK, the format of the mark that is required is a square mark containing in legible form the letters “UK” in the upper part, the approval number of the premises in the centre and the letter “N” in the lower part. This format is the same format as a „national‟ mark used under previous legislation for a similar purpose, thus keeping costs to business to a minimum. The format of the health and identification mark to be used has already been determined by the Agency and was included in its Guide to Food Hygiene and other Regulations for the UK Meat Industry Guide (MIG) issued in December 2006 to FBOs at abattoirs and cutting plants. The MIG provides advice on what FBOs should do to comply with the requirements of the EU Regulations and the format of the mark is described in the MIG. It can be accessed at the Food Standards Agency website9. The format of the special mark will be set out in the Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012. 5. Consultation The SI has been subject to two formal public consultations from 6 April to 23 June 2010. The ambulatory reference and special health mark provisions were included in that consultation version (a Regulatory Impact Assessment (RIA) on the special health mark was provided and is included in the RIA section of this Explanatory Memorandum and no objections were raised on either of these issues by respondents to the consultation (no responses were received to the consultation in Wales). A number of other RIAs relating to various (generally minor) amendments to EU Regulations which were also put out to consultation in 2010 are now finalised and included with this document. Two RIAs are also included which were consulted on later in 2010 and 2012. A formal public consultation on the draft Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012 and two of the associated draft RIAs was held between 9 December 2011 and 9 March 2012. Two responses from industry representative bodies were received in Wales. Concerns were raised from industry bodies across

9 http://www.food.gov.uk/foodindustry/meat/guidehygienemeat, the relevant section is Part 2, Chapter 13, Paragraph C3.

the UK with regard to revised wording of the proposed special health mark provisions, objecting that the provisions now required the use of mark on various meat products (or their packaging) derived from emergency slaughtered meat and that EU regulations did not require this. However, this is not a new issue in that the EU Regulations anyway required the use of a national mark, but the UK has chosen to amend the provisions to make this clear. The European Commission has made it clear that national special marks must be introduced and used for the carcases, meat and other products derived from animals that have been slaughtered under the emergency slaughter arrangements. Failure to provide for such provisions could lead to infraction proceedings against the UK raised by the European Commission. 6. Regulatory Impact Assessment Plant Inspection Assistants (PIAs) voluntarily taking over some activities from meat hygiene inspectors (MHIs) in poultry and rabbit meat slaughterhouses 6.1.1 Options Option 1 Do nothing. Enforcement of Regulation (EC) 1021/2008 would not be provided for in Wales and the UK would be in breach of its EU Treaty obligations. Option 2 Provide for the enforcement in Wales of Regulation (EC) 1021/2008, which allows slaughterhouses to train their own staff to carry out official controls in meat plants under supervision of the Official Veterinarian (OV). This is the preferred option. 6.1.2 Costs Option 1 There would be no incremental costs Option 2 There may be costs associated with letting PIAs know that the Regulation will be adapted into law. Since this would simply be a continuation of the current practice, it should be quite easy to convey this information to both plants and PIAs. It is assumed that this will take a maximum of 1 hour for managers to understand and brief their PIAs, and 15 minutes for PIAs to understand this. This equates to a total one-off cost to industry of approximately £97, comprising of £42 (2 slaughterhouses – 1 hour @ £21 per hour) for poultry managers, and £55 to PIAs (20 PIAs – 0.25 hours @ £11 per hour). 6.1.3 Benefits Option 1 There would be no incremental benefits.

Option 2 There are considerable benefits to industry and the FSA by adopting option 2, as this would allow FBOs of poultry and rabbit slaughterhouses to continue to use PIAs instead of MHIs where they chose to, which is a more efficient way of carrying out official controls, while maintaining a high standard of public health protection. Since this would be a business decision for each individual slaughterhouse, it is not possible to predict how many may move to using PIAs in future, therefore, the benefit cannot be quantified. 6.1.4 Consultation An informal consultation took place with the British Poultry Council (BPC), the Royal Society for the Promotion of Health (RSPH), Meat Training Council (MTC), with FSA officials (who were at the time part of the Meat Hygiene Service, which has now become part of the FSA), Veterinary Advisers (VAs) and the Department of Agriculture and Rural Development (DARD) in Northern Ireland. No objections were raised. The BPC fully supports the move to make permanent the need for PIAs to be trained only for the specific tasks they perform, and to the satisfaction of the Competent Authority. They are particularly keen to increase uptake of PIAs, particularly in the context of the move to full cost recovery. Small businesses such as the operators of licensed poultry meat and wild game meat plants were also formally consulted. The FSA conducted a formal public consultation between 6 April and 23 June 2010 on the draft Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012, together with an RIA on this Regulation. No further data was received in regards to the considered costs and benefits. 6.1.5 Enforcement The FSA will remain responsible for enforcement of official controls. FBOs performing official control duties will do so subject to that food business operator or those that slaughter and bleed the animals having had the appropriate training and being subject to regular verification checks by the OV/AV. 6.1.6 Competition Assessment The proposal is not expected to either directly or indirectly limit the number or range of suppliers. It should not limit the ability of suppliers to compete or reduce suppliers‟ incentives to compete vigorously. The use of PIAs may actually open the market and encourage competition. It encourages efficiency in official controls in the poultry sectors. There is obviously a limited number of PIAs needed in the industry, but there will be an ongoing level of turnover that will support a small market for training and/or contracting. The market will be open to all interested parties.

Clarifying which establishment can apply ID marks 6.2.1 Options Option 1 Do nothing. Enforcement of Regulation (EC) 1020/2008 would not be provided for in Wales and the UK would be in breach of its EU Treaty obligations. Option 2 Provide for the enforcement in Wales of Regulation (EC) 1020/2008, which provides clarity on abbreviations for EU Member States should only be included in the identification markings for products of animal origin manufactures by approved establishments within the EU. This is the preferred option. 6.2.2 Costs Option 1 There would be no incremental costs. Option 2 As this option does not impose any new requirements on business or enforcement authorities in Wales, there are no costs expected to arise. However, there may be costs for third countries if they need to change their identification marking requirements, and for the European Commission in enforcing the requirements. 6.2.3 Benefits Option 1 There would be no incremental benefits. Option 2 Provides clarity to business and enforcement authorities on the use of health marks, which would ensure that the information provided by those exporting products of animal origin (POAO) to the EU is not misleading. It will also put the EU in a better legal standing to address any misuse of identification marks. This would have benefits in improving information to consumers and businesses, and contribute towards improved traceability. 6.2.4 Consultation The FSA is aware that the clarification will be welcomed by Competent Authorities as the issue was first raised by them. The FSA conducted a formal public consultation between 6 April and 23 June 2010 on the draft Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012. No comments were received on this issue. 6.2.5 Enforcement There will be no significant change to enforcement authorities. However, the preferred option will make it easier for inspectors to identify products produced outside the EU.

6.2.6 Competition Assessment The proposal is designed to improve accuracy of information for industry and consumers. Therefore, it is not expected to either directly or indirectly limit the number or range of suppliers. It should not limit the ability of suppliers to compete or reduce suppliers‟ incentives to compete vigorously. Certification of the correct slaughter and bleeding of farmed game

6.3.1 Options Option 1 Do nothing. Enforcement of Regulation (EU) 150/2011 and Regulation (EU) 151/2011 would not be provided for in Wales and the UK would be in breach of its EU Treaty obligations. Option 2 Apply the requirements of Regulation 853/2004 and Regulation 854/2004, which requires an approved AV/OV to confirm that the animals have been slaughtered correctly. Option 3 Provide for the enforcement in Wales of Regulations (EU) 150/2001 and 151/2011, which allow the certification of the correct slaughter and bleeding at the place of origin under the supervision of the FBO, subject to the FBO or their slaughterer having had appropriate training an being subject to regular verification checks by OVs/AVs. This is the preferred option. 6.3.2 Costs Option 1 There are no incremental costs. Option 2 Industry Farmers would incur inspection costs for an OV/AV carrying out an ante mortem inspection per slaughter occasions. In Wales an average of 6-19 animals were slaughtered and inspected per occasion during 2011/12. It is estimated that 186 farmed deer were slaughtered during that period at the 1 approved on-farm slaughtered facility in Wales. This equates to 13 slaughtering occasions in that year.

It is envisaged that a typical inspection will last one hour with an additional two hours for travelling to and from the location; meaning a total inspection time of 3 hours. The cost per inspection can be quantified by multiplying the time a typical inspection takes (3 hours) by the hourly wage rate of an AV (£23.8910), which results in a cost per inspection

10Wage rate obtained from The Annual Survey of Household Earnings (2011)

(http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=15313). Median hourly wage of „Veterinarians‟ is used (£18.38 plus 30% overheads)

of £71.6711. To quantify the annual inspection cost per farm we multiply the number of inspections carried out per farm (ranging from 23 – 45 per year) by cost per inspection (£67.70). We estimate an average inspection cost per farm of approximately £1,648 to £3,22512 per year, which will equate to the total average annual cost of inspections to farmers in Wales for the 1 on-farm slaughter establishment. Taking the midpoint we derive a best estimate of £2,301.9413. Certification costs We assume that the requirement for certification of slaughter and bleeding would have increased the cost from £45 per consignment of animals by an additional £45 - £90, depending on how long the process would have taken. Taking the midpoint we derive a best estimate of £67.5014. It is estimated that 13 slaughtering occasions are carried out in Wales during 2011/1215; resulting in an incremental annual total cost to industry for certification of around £1,035 - £4,050 per year. Taking the midpoint we derive a best estimate of £2542.5016. Familiarisation Costs There would be a reading and familiarisation cost to farmed game establishments for reading Regulation (EC) 853/2004. It is estimated that it would have taken 1 hour per business to read and become familiar with the Regulation‟s requirements and disseminate this through the business. Based on current estimation there is 1 farmed game establishments operating in Wales that could be directly affected. To quantify the one off familiarisation cost to industry we calculated the familiarisation cost per business by multiplying the hourly wage rate of a farm manager (£17.52)17 by the one hour taken to understand the regulation, resulting in a familiarisation cost per business of £17.5218. The estimated one-off familiarisation cost to businesses in Wales is £17.52. Enforcement There are no additional costs associated with this option, other than familiarisation with the regulations. We estimate that each OV would have invested 1 hour reading and familiarising themselves with the Regulations and disseminating to key staff in the organisation. To quantify the familiarisation cost to the Agency we need to calculate the familiarisation cost per OV reading the regulation. A median hourly wage rate of £23.8919 has been applied to an OV, and when multiplied by the reading time equates to a familiarisation cost per OV of £23.89. To quantify familiarisation costs to the Agency in Wales we multiply the familiarisation cost per OV by the number of OV‟s in Wales (estimated to be around 35), which equates to a one-off familiarisation cost of £83620 .

11 3 hours * £23.89 = £71.76 12 Lower bound estimate £1,557.19) = Cost per inspection per farm (£1,557.19) * Number of on-farm slaughter establishments

in Wales (1) Upper bound estimate (£3,046.68) = Cost per inspection per farm (£3,046.68) * Number of on-farm slaughter establishments in

Wales (1) 13 Calculated by taking the midpoint of the range: (£1,557.19+ £3,046.68)/2 =£3,301.94 14 Calculated by taking the midpoint of the range: (£45 + £90)/2 = £67.50 15 Lower bound estimate (= 23 inspections per annum per farm * 1 on-farm slaughtering establishments in Wales

Upper bound estimate = 45 inspections per annum per farm * 1 on-farm slaughtering establishments in Wales 16 Calculated by taking the midpoint of the range: (£1,035+ £4,050)/2 = £2,542.50 17Wage rate obtained from The Annual Survey of Household Earnings (2011)

(http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=15313). Median hourly wage of a „Managers In Farming, Horticulture, Forestry And Fishing‟ is used (£13.48 plus 30% overheads)

18 1 hour * £17.52 = £17.52 19 Wage rate obtained from The Annual Survey of Household Earnings (2011)

(http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=15313). Median hourly wage of a „Veterinarians‟ is used (£17.36 plus 30% overheads)

20 35 * £23.897 = £836

The table below displays the number of OV‟s along with the familiarisation cost for the Agency broken down by country. Familiarisation cost to the Agency

Country Number of OV's Total

familiarisation cost

England 271 £6,474

Wales 35 £836

Scotland 52 £1,242

GB 358 £8,553 Note: Totals may not sum due to rounding. Costs are estimated by multiplying wage rates uplifted by 30% to account for overheads. This means that the wage rates reported in the text are approximate to 2 d.p. and when grossed may result in rounding error.

Option 3 Industry There will be an additional cost arising from the verification check on the competence of the person carrying out slaughter and bleeding operations. Although this will fall to a person, who is unlikely in most cases to be the FBO, the cost is likely to be passed on to the FBO as part of the overall cost of carrying out this work. The verification checks will need to be carried out on a regular basis but could be once every 2-3 years at a cost of about £20 - £30 each time.

Training Costs

There may be a small additional burden for those that undertake the slaughter and bleeding to undertake the necessary training. However, for those who currently carry out this work the FSA will seek to establish whether the training that they have carried out in the past is sufficient to meet the needs of this element of the proposal that such people who slaughter and bleed farmed game are competent to do so. We understand that a number of those who carry out this work are already trained to act as the trained person in wild game hunting parties. We have assumed that one employee per business will attend initial training. It is estimated that the average one-off training cost to industry in Wales would equate to £170. The cost of training is based on the cost of a farmer attending training for two days. The training cost applied is quantified by multiplying two working days of a farmer lost to training (14 hours) by the hourly wage rate of a farmer (£12.1421), which equates to a cost per farmer being trained of £170.

6.3.3 Benefits Option 1 There are no incremental benefits.

21 Wage rate obtained from The Annual Survey of Household Earnings (2011)

(http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=15313). Median hourly wage of a „Farmers‟ is used (£9.34 plus 30% overheads)

Option 2 Industry This is the more costly option with little or no benefit. Industry may benefit in terms of public perception over animal welfare as this option would require an AV and OV to confirm that animals were correctly slaughtered and bled in line with animal welfare considerations. Enforcement There are no particular enforcement benefits associated with option.

Consumer The benefit to the consumer arises from the assurance that farmed deer are slaughtered and bled by competent persons in the same way that animals in a slaughterhouse would be and that animal welfare is not compromised. Option 3 Industry The main benefit to industry is the reduced cost compared with option 2. Enforcement There are no particular enforcement benefits associated with option. Consumers The benefit to the consumer arises from the assurance that farmed deer are slaughtered and bled by competent persons in the same way that animals in a slaughterhouse would be and that animal welfare is not compromised. 6.3.4 Consultation The original UK proposal was developed with the knowledge and support of the farmed game sector. Individual FBOs of on-farm slaughter facilities and the British Deer Farmers Association (BDFA) – the trade association for the farmed deer industry – have worked together with the FSA to drive this forward and fully supports the way that the UK has sought to keep additional burdens on the industry to a minimum during negotiations, as they believed that the additional cost of requiring a veterinarian to come to a farm to attest to the correct slaughter and bleeding at the time and date of slaughter would have rendered their businesses uneconomical. The FSA has continued to consult with the farmed game sector on these measures, in particular regarding the requirements for those slaughtering and bleeding farmed game to be competent to do so. A formal public consultation was undertaken from 13 December 2011 to 21 February 2012 on the draft Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012. No responses were received, indicating that the FSA‟s assessment of the impact is perceived to be accurate by stakeholders.

6.3.5 Competition Assessment The requirements are not expected to either directly or indirectly limit the number or range of suppliers to compete or reduce suppliers‟ incentives to compete vigorously. As a result of the application of the new EU regulations, the market for FBOs or those undertaking the certification of correct slaughter and bleeding or the date and time of slaughter should actually open and encourage competition. This would encourage efficiency in official controls in the farmed game sector. Requirements for health marking 6.4.1 Options Option 1 Do nothing. Enforcement of Regulation (EC) 1021/2008 would not be provided for in Wales and the UK would be in breach of its EU Treaty obligations. Option 2 Provides for the enforcement in Wales of Regulation (EC) 1021/2008, which clarifies the current requirement for health marking. This is the preferred option. 6.4.2 Costs Option 1 There will be no incremental costs. Option 2 The Regulation does not introduce or remove any existing requirements for slaughterhouses or enforcers in Wales and therefore no costs are identified. 6.4.3 Benefits Option 1 There will be no incremental benefits. Option 2 This option will ensure that the information provided by those exporting meat into the EU is not misleading, which may contribute towards improved traceability and will benefit consumers by increasing the accuracy of information. 6.4.4 Consultation The RIA was issued as part of a formal consultation between 6 April and 23 June 2010. No data was received as regards the costs and benefits. The measure was supported by a consumer organisation.

6.4.5 Competition Assessment Both options are designed to improve accuracy of information for industry and consumers. Therefore, neither option is expected to either directly or indirectly limit the number or range of suppliers. It should not limit the ability of suppliers to compete or reduce suppliers‟ incentives to compete vigorously. Requirements for samples from class B live bivalve mollusc (LBM) production areas 6.5.1 Options

Option 1 Do nothing. Enforcement of Regulation (EC) 1021/2008 would not be provided for in Wales and the UK would be in breach of its EU Treaty obligations. Option 2 Provide for the enforcement in Wales of Regulation (EC) 1021/2008, which allows the application of the 90% provision for Class B production areas to continue. This is the preferred option. 6.5.2 Costs Option 1 There would be no incremental costs to industry. The Centre for Environment, Fisheries and Aquaculture Science (CEFAS), which is responsible for assessing the sampling data, would need to familiarise themselves with the new Regulations. Option 2 There are not expected to be any familiarisation costs with the regulation as it is a continuation of existing practice. 6.5.3 Benefits Option 1 The majority of Class B beds in Wales would have faced reassessment and potential downgrading to Class C. Option 2 The shellfish industry in Wales will not be subject to a period of instability caused by re-assessment of Class B production areas and potential downgrading from B to C. 6.5.4 Enforcement No additional costs will be incurred as there will be no significant change to the current enforcement regime.

6.5.5 Consultation All relevant stakeholders, which included the shellfish industry and local enforcement bodies were consulted informally on these proposals in 2008 and are aware of the implications of the changes proposed. No objections to the proposals were received. The FSA conducted a formal public consultation from 6 April to 23 June 2011 on the draft Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012. No responses were received. 6.5.6 Competition Assessment Neither option will have any material impact on competition. Therefore, neither option is expected to either directly or indirectly limit the number or range of suppliers. It should not limit the ability of suppliers to compete or reduce suppliers‟ incentives to compete vigorously. Criteria for platelet count testing of raw cows‟ milk 6.6.1 Options Option 1 Do nothing. Enforcement of Regulation (EC) 1020/2008 would not be provided for in Wales and the UK would be in breach of its EU Treaty obligations. Option 2 Provide for the enforcement in Wales of Regulation (EC) 1020/2008, which enables FBOs manufacturing dairy products from raw cows‟ milk to be able to continue not to have carry out testing to establish the platelet count levels of milk prior to processing as long as that milk is processed within the time scales specified in the HACCP procedures. This is the preferred option. 6.6.2 Costs Option 1 There would be no incremental costs. Option 2 In 2009, there are approximately 300 silos of milk in Wales which will be affected by these Regulations. Because businesses are not currently required to carry out platelet counts on raw cows‟ milk there would be no associated cost or saving. However, businesses producing heat treated (processed) cows‟ milk intended for the manufacturing of dairy products are currently required to conduct platelet counts. It is expected that there would be an approximate annual saving to industry of £375,000 from avoiding the costs of platelet counts. The cost of a platelet count test is approximately £5. It is estimated that approximately 150 silos of raw cow‟s drinking milk and 150 silos of heat treated cows‟ milk would need to be tested, on average 250 times per year.

There is also a small saving to enforcement agencies, as they will not need to investigate historical test results or carry out occasional follow-up work. The scale of their impact in uncertain and this saving is, therefore, not monetised. 6.6.3 Benefits Option 1 There would be no incremental benefits. Option 2 The benefits to the raw cows‟ milk sector, is the cost saving from not having to carry out platelet counts. 6.6.4 Enforcement There will be no change to the existing enforcement regime. Local authorities will continue to enforce the requirements relating to approval of dairy processors. 6.6.5 Consultation Informal consultation took place with Dairy UK, which represents farming and processing in the dairy industry in the UK, and there were no objections to the proposals during the negotiations leading up to the publication of Regulation (EC) 1020/2008. During the formal public consultation between 6 April and 23 June 2010 comments were received from a consumer organisation which considered that the measure was a retrograde step for consumer protection and questioned the benefits. 6.6.5 Competition Assessment It is not expected that this proposal will directly or indirectly limit the number or range of businesses, to limit the ability of businesses to compete, or to reduce the incentives to compete vigorously. The removal of the requirement to test will apply equally to all businesses, and does not prevent each from implementing any testing regime they choose. Import certificates for „composite products‟ 6.7.1 Options Option 1 Do nothing. Enforcement of Regulation (EC) 1162/2009 would not be provided for in Wales and the UK would be in breach of its EU Treaty obligations. Option 2 Provide for the enforcement in Wales of Regulation (EC) 1162/2009, which introduces a staged compliance for industry to meet the requirements of Regulation (EC) 853/2004. This is the preferred option.

6.7.2 Costs Option 1 There would be no incremental costs. Option 2 This will have a cost implication for businesses as they will need to ensure that their suppliers and the sources of their suppliers are all meeting the requirements of Article 6 of Regulation (EC) 853/2004. The table below shows the number firms affected by size and country.

Number of firms affected by regulation, by location and size.

Location/

Firm Size

Micro Small Medium Large Total

England 1,049 368 155 59 1,630

Wales 87 30 13 5 135

Scotland 212 74 31 12 330

NI 77 27 11 4 120

UK 1,425 500 210 80 2,215

Source: The Inter Departmental Business Register is accessible via the Office for National Statistics, http://www.statistics.gov.uk/idbr/idbr.asp Notes: 1) Totals may not sum due to rounding 2) Figures are the sum of premises listed under SIC 10.13 Production of meat and poultry meat products, SIC 10.20 Processing and preserving of fish, crustaceans and molluscs, SIC 10.51 Operation of dairies and cheese making, SIC 10.52 Manufacture of ice cream, SIC 10.85 Manufacture of prepared meals and dishes and SIC 10.89 Manufacture of other food products n.e.c. Firm size is based on the number of employees within an organisation. Micro 0 - 9 employees, Small 10 – 49 employees, Medium 50 – 249 employees and Large 250+ employees Familiarisation costs There will be a one-off cost to industry for reading and familiarising themselves with the Regulation. It is estimated that it will take 1 hour per business to read and familiarise themselves with the new arrangements and a further 1 hour disseminating to key staff22. This means a total of 2 hours for familiarising. There are currently 135 food businesses operating in Wales which are directly affected by the regulation. The table above displays the number of businesses affected in the UK broken down by location and size.

To quantify the one-off familiarisation cost to industry we calculate the familiarisation cost per business by multiplying the hourly wage rate of a „business manager‟ of £26.1023 by the 2 hours taken to understand the Regulation resulting in a familiarisation cost per business of £52.2024. To quantify the overall one-off familiarisation cost to industry we multiply the familiarisation cost per firm by the number of businesses affected by the regulation. This results in an average one-off familiarisation cost to businesses in Wales of approximately £7,204. The table below

22 While the FSA recognises that dissemination of information will result in an opportunity cost in terms of time of key staff

members it is anticipated that this will be minimal and the additional hour will cover these costs. 23 Wage rate obtained from The Annual Survey of Household Earnings, 2011) (See:

http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=15313). Median hourly wage of „Production Manager‟ (£20.08 + 30% to cover overheads = £26.10).

24 £52.20 = £26.10 (hourly wage rate) * 2 hours (familiarisation time)

displays the familiarisation cost to industry broken down by location and firm size. Familiarisation costs to industry by location and business size

Micro Small Medium Large Total

England 54,737 19,206 8,066 3,073 85,083

Wales 4,533 1,590 668 255 7,047

Scotland 11,081 3,889 1,633 622 17,226

NI 4,030 1,413 594 226 6,263

UK 74,381 26,099 10,962 4,176 115,618

Notes: 1) Totals may not sum due to rounding 2) Firm size is based on the number of employees within an organisation. Micro 0 - 9 employees, Small 10 – 49 employees, Medium 50 – 249 employees and Large 250+ employees

There will be a one-off cost to enforcement officers working in Environmental Health Departments or at a border inspection post (BIP) for reading and familiarising themselves with the Regulations. It is expected that one Environmental Health Officer (EHO) and one official from each Port Health Authority (PHA) will read the Regulations and disseminate the information to staff. It may materialise that enforcement of the regulation might be carried out by an EHO or a Trading Standards Officer (TSO). We have used the wage rate of an EHO to calculate the familiarisation costs because it is a higher wage rate value than the TSO wage rate, which means the costings covers either an EHO or TSO reading the regulation. We estimate that an officer will invest 30 minutes to read and familiarise themselves with the Regulations, and a further one hour disseminating the key points to other authorised officers in the organisation25. This means a total of one and a half hours for familiarisation. The familiarisation cost per enforcement authority is calculated by multiplying the reading time, one and a half hours, by the average hourly wage rate applied to an EHO of £20.4626, generating a familiarisation cost per enforcement authority of £30.6927. To quantify the overall familiarisation cost to enforcement authorities we multiply the familiarisation cost per LA by the number of LAs in Wales. There are 23 enforcement authorities in Wales with responsibility for the enforcement of food hygiene legislation, who will need to familiarise themselves with this regulation. This includes 22 LAs and 1 PHA in Wales. The total one off familiarisation cost for enforcement authorities in Wales totals £70628. The table below displays the number of LAs and PHAs per country with familiarisation cost.

25 While the FSA recognises that dissemination of information will result in an opportunity cost in terms of time of key staff

members it is anticipated that this will be minimal and the additional hour will cover these costs. 26 Wage rate obtained from The Annual Survey of Household Earnings, 2011) (See:

http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=15313). Median hourly wage of „Environmental health officers‟ (£15.73 + 30% to cover overheads = £20.46).

271.5 hours * £20.36 = £30.69 28 £30.69 (familiarisation cost per LA) * 23 (total LA‟s and PHA‟s) = £706

Familiarisation cost to Local Authorities and Port Health Authorities in the UK

no. LAs Familiarisation Cost

England1 393 12,061

Wales2 23 706

Scotland 32 982

NI 26 798

UK 474 14,547 1. Includes 39 Port Health Authorities 2. Includes 1 Port Health Authority Costs are estimated by multiplying wage rates uplifted by 30% to account for overheads. This means that the wage rates reported in the text are approximate to 2 d.p. and when grossed may result in a rounding error.

6.7.3 Benefits Option 1 There are no incremental benefits. Option 2 The Regulation will help facilitate trade as FBOs would be able to trade composite products across Member States if they are compliant with the correct certification when entering another Member State. Harmonising the requirements, so that foods containing both products of animal origin and processed products of animal origin being imported in the European Union require the same certification as for animal health purposes and are subject to veterinary checks at Border Inspection Posts, will enhance and strengthen current food safety measures, make enforcement easier, protect human health and assist with traceability of foods. The Regulation would deliver public health benefits. They will minimise the potential health risk to consumers posed by FBOs handling imports of composite products of animal origin to the EU. Although the benefits of this option are unquantifiable any option which contributes towards a reduction in foodborne disease is likely to have a significant economic benefit. 6.7.4 Enforcement Local Authorities will need to ensure that FBOs are compliant with the requirements of Article 6 of Regulation (EC) 853/2004. 6.7.5 Consultation Informal discussion held with industry did not lead to any substantial concerns being raised. The FSA conducted a formal public consultation between 9 December and 2 March 2012 on the draft Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012. No concerns or further data related to the considered costs and benefits were received from industry or from enforcers.

6.7.6 Competition Assessment The regulation is not expected to either directly or indirectly have any impact on competition. Use of clean water with fishery products 6.8.1 Options Option 1 Do nothing. Enforcement of Regulation (EC) 1019/2008 and Regulation (EC) 1020/2008 would not be provided for in Wales and the UK would be in breach of its EU Treaty obligations. Option 2 Provide for the enforcement in Wales of Regulation (EC) 1019/2008 and Regulation (EC) 1020/2008, which introduces control procedure for using clean water when handling fishery products. This is the preferred option. 6.8.2 Costs Option 1 There would be no incremental costs. Option 2 There are expected to be minimal familiarisation costs, however these cannot be monetised as the FSA is unaware of any land-based establishments using clean water when handling fishery products. Possible further costs to industry may arise through their need to implement and maintain procedures based on the HACCP principles (if their current system does not sufficiently assess the water quality). Since food businesses (except primary producers) are already required to have a HACCP system to manage food safety, it is not considered that these requirements will place a considerable extra burden. 6.8.3 Benefits Option 1 There would be no incremental benefits. Option 2 The benefit to consumers would be increased protection by ensuring clear food safety standards in sourcing clean water when handling fishery products. 6.8.4 Enforcement There will be no change to the current enforcement regime, therefore no additional costs will arise. Local authorities will continue to enforce HACCP requirements. The specified HACCP regime is the existing one in Regulation (EC) 852/2004.

6.8.5 Consultation Stakeholders were kept informed of the developments of these proposals via notifications on the FSA website while negotiations took place. In August 2008 an informal consultation letter was issued to a range of stakeholders who may be affected by the proposals. Amongst these is the Seafish Industry Authority (Seafish), which represents a large proportion of the UK fishing sector. No objections to the proposals were received. The FSA conducted a formal public consultation from 6 April to 23 June 2011 on the draft Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012. No responses were received. 6.8.6 Competition Assessment This proposal applies to all businesses. Therefore, it is not expected to either directly or indirectly limit the number or range of suppliers. It should not limit the ability of suppliers to compete or reduce suppliers‟ incentives to compete vigorously. Temperature of eggs during transportation 6.9.1 Options Option 1 Do nothing. Enforcement of Regulation (EC) 1020/2008 would not be provided for in Wales and the UK would be in breach of its EU Treaty obligations. Option 2 Provide for the enforcement in Wales of Regulation (EC) 1020/2008, which permits the continued use of existing national temperature controls, and allow Member States to apply such requirements that are considered appropriate in order to conserve the hygienic property of the eggs. This is the preferred option. 6.9.2 Costs Option 1 There would be no incremental costs. Option 2 There would be no incremental costs as the amendment does not impose any new requirements. 6.9.3 Benefits Option 1 There would be no incremental benefits. Option 2 There is a potential, though unquantifiable, benefit to consumers by ensuring that eggs imported from other Member States will, where appropriate, continue to be

stored and transported at temperatures best suited to assure optimal conservation of their hygiene properties in the originating Member State. 6.9.4 Enforcement There will be no change to the current enforcement regime and, therefore, no additional costs will be incurred. Local authorities will continue to enforce the requirements. 6.9.5 Consultation Informal consultations have taken place with the British Egg Industry Council (BEIC), British Free Range Egg Producers Association (BFREPA), which represents the egg products industry in the UK, and Local Authorities Co-ordinating Organisation on Regulatory Standards (LACORS), which represents enforcement bodies in the UK during 2008. There were no objections raised. The FSA conducted a formal public consultation from 6 April to 23 June 2011 on the draft Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012. No responses were received. 6.9.6 Competition Assessment This amendment should not have any implications for competition as it does not impose any new requirements on any business in Wales. Requirements for cracked eggs and their transportation to approved establishments for processing 6.10.1 Options Option 1 Do nothing. Enforcement of Regulation (EC) 1020/2008 would not be provided for in Wales and the UK would be in breach of its EU Treaty obligations. Option 2 Provide for the enforcement in Wales of Regulation (EC) 1020/2008, which allows food businesses to be approved to break out cracked eggs and transport the frozen or refrigerated content for processing at an establishment approved for that purpose. This is the preferred option. 6.10.2 Costs Option 1 There would be no incremental costs. Option 2 There would be no incremental costs.

6.10.3 Benefits Option 1 There would be no incremental benefit. Option 2 In 2009 there were 26 businesses identified as being affected by this regulation. It will allow these businesses to break out cracked eggs and transport the content for processing. Otherwise, the cracked eggs would be likely to break in transit, resulting in a cost to the business from wasted eggs. Industry figures at the time suggested this would be in the order of approximately £500 per year on average. This option would mean that this cost would be avoided, so has estimated benefits of approximately £13,000 per year (£500 x 26 businesses). 6.10.4 Consultation Informal consultation took place in 2006 with the British Egg Products Association, which represents the egg products industry in the UK, no objections were raised to the Regulation‟s application. The FSA conducted a formal public consultation from 6 April to 23 June 2011 on the draft Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012. No responses were received. 6.10.5 Enforcement There will be no change to the current enforcement regime, and, therefore, no additional costs will be incurred. 6.10.6 Competition Assessment As this Regulation applies to all relevant businesses, there are not considered to be any issues for competition. Importation of fish oils 6.11.1 Options Option 1 Do nothing. Enforcement of Regulation (EC) 1020/2008 would not be provided for in Wales and the UK would be in breach of its EU Treaty obligations. Option 2 Provide for the enforcement in Wales on Regulation (EC) 1020/2008, which sets a TVB-N limit for all fishery products used in the preparation of fish oil. This is the preferred option.

6.11.2 Costs Option 1 There would be no incremental costs. Option 2 There is a possible additional cost to enforcement authorities in Wales from having to test fish oils with respect to TVB-N limits to ensure acceptable quality, although this testing should fall entirely on competent authorities in third countries. 6.11.3 Benefits Option1 There are no incremental benefits. Option 2 Without the regulation applying to third countries, there would be a potential for un-regulated fish oils to be imported and potential food quality issues indicated by high TVB-N levels, with a subsequent impact on public health. Changes to TVB-N limits will ensure that all firms throughout the EU will be subject to the same limits. This will help facilitate trade from third countries to all in the EU, rather than on a country by country basis. 6.11.4 Enforcement There should be no significant impact on enforcement authorities. 6.11.5 Consultation Informal consultation has been undertaken with several letters issued to stakeholders outlining the position with regards to the Commission proposal. The FSA has also held discussions with industry representatives to raise any concerns. Written concerns from industry were received and taken forward, as well as concerns sent direct to SCoFCAH by industry. Arrangements were also made for industry representatives to attend a Commission Restricted Working Group meeting, to participate in the discussion and put their views forward. The FSA conducted a formal public consultation from 6 April to 23 June 2011 on the draft Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012. No responses were received. 6.11.6 Competition Assessment This amendment should not have any implications for competition as it does not impose any new requirements on any business in Wales.

Food Chain Information requirements 6.12.1 Options Option1 Do nothing. Enforcement of Regulation (EC) 1020/2008 would not be provided for in Wales and the UK would be in breach of its EU Treaty obligations. Option 2 Provide for the enforcement in Wales of Regulation (EC) 1020/2008, which ensures a consistent definition and understanding of the term Food Chain Information which would correct any existing misinterpretation of FCI across the EU. This is the preferred option. 6.12.2 Costs Option 1 There would be no incremental costs. Option 2 The amendment only clarifies FCI terminology and does not change the obligations on food businesses to request, receive, check or act upon FCI. As both producers and slaughterhouses operators in Wales are already compliant with the existing FCI requirements there will be no additional costs to them. 6.12.3 Benefits Option1 There would be no incremental benefits. Option 2 Consistency between businesses and countries within the EU will correct differences in information provided at each level of the food chain, improving traceability and minimising any existing potential health risks. In addition, harmonisation of the understanding of the term Food Chain Information may smooth the trade in associated food products between EU Member States as information provided by producers will be consistent. 6.12.4 Enforcement There should be no significant impact on enforcement authorities. 6.12.5 Consultation The FSA conducted a formal public consultation from 6 April to 23 June 2011 on the draft Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012. No responses were received regarding the considered costs and benefits. The measure was recognised by a consumer organisation as supporting traceability.

6.12.6 Competition Assessment The proposal is not expected to either directly or indirectly limit the number or range of suppliers. It should not limit the ability of suppliers to compete or reduce suppliers‟ incentives to compete vigorously. Treatment to kill viable parasites in fishery products for human consumption 6.14.1 Options Option1 Do nothing. Enforcement of Commission Regulation (EU) 1276/2011 would not be provided for in Wales and the UK would be in breach of its EU Treaty obligations. Option 2 Provide for the enforcement in Wales of Commission Regulation (EU) 1276/2011, which extends the freezing controls to all cold smoked fishery products intended to be consumed without further processing; and provide a specific freezing exemption for farmed fishery products that meet the relevant exemption criteria. This is the preferred option. 6.14.2 Costs Option1 There would be no incremental costs. Option 2 Freezing Controls for Smoked Fishery Products Food business operators processing cold smoked fishery products would be required to familiarise themselves with the new freezing requirement. It is envisaged that 1 hour would be required per business to read and familiarise themselves with the new legislation, plus an additional hour to disseminate this information to staff 29. This means a total of 2 hours per business to become familiar with the revised controls. There are currently 9 „cold smoked‟ fish processing businesses operating in Wales which are directly affected by the proposal.

The total familiarisation cost is quantified by multiplying the median hourly wage rate of a manager of £26.1030 by the time required to familiarise themselves with the policy (2 hours) by the total number of approved „cold smoked‟ fish processing businesses affected in Wales (9); resulting in a familiarisation cost to the sector of £47031. The table below displays the number of affected businesses by country:

29 While we recognise that dissemination of information will result in an opportunity cost in terms of time of key staff members

we anticipate that this will be minimal and the additional hour will cover these costs. 30 Wage rate obtained from the Annual Survey of Household Earnings (ASHE) 2011. Median hourly wage rate of „Production

Manager‟, £20.08, uplifted by 30% to account for overheads (20.08*1.3) = 26.10 31 9*2*1*£26.10=£12,518

Policy Option 2a - fish processors supplying certain species of wild cold smoked fish

Micro Small Medium Large Total

England 93 53 27 4 177

Wales 5 3 1 0 9

Scotland 25 14 7 1 47

Northern Ireland

4 2 1 0 7

UK Total 126 72 36 6 240

Note: totals may not sum due to rounding

The table below displays the familiarisation cost to Fish Processors by country and firm size. One-Off Familiarisation Costs to Fish Processors, by Country and Firm Size

Micro Small Medium Large Total

England £4,851 £2,772 £1,386 £231 £9,241

Wales £247 £141 £70 £12 £470

Scotland £1,288 £736 £368 £61 £2,454

Northern Ireland

£192 £110 £55 £9 £365

UK £6,578 £3,759 £1,879 £313 £12,530 Note: totals may not sum due to rounding

With regard to cold smoked fishery products derived from farmed fish, no freezing was required previously under the EU hygiene legislation. It is fully expected that all aquaculture production methods currently in operation in the UK will be able to demonstrate that they meet the freezing exemption criteria, therefore farmed cold smoked fish will continue to be exempted from the freezing requirements and no additional freezing costs are expected for businesses supplying these products as a result of this policy option. Based on the data available we are unable to separate out the activity of processors handling cold smoked fish derived from wild species. However, our assumption is that production volumes of affected wild cold smoked fishery products that will now require freezing for the first time are likely to be small. The main species likely to be affected are wild trout, cod and halibut. The UK‟s largest trout processor (who process approximately 80% of UK trout) has confirmed that they do not produce any cold smoked wild trout. They also confirmed that there is likely to be minimal amounts of cold smoked wild trout, cod and halibut produced commercially in the UK. We therefore assume that any additional freezing costs to UK industry are likely to be minimal. The Commission Regulation will enable FBOs in the UK to make costs savings by removing the need to freeze raw, cold smoked and marinated/salted fishery products derived from farmed fish where the new exemption criteria are met. The table below shows annual freezing cost savings broken down by country and firm size:

Freezing Costs Savings per Country and Firm Size (£, per annum, Central Estimate)

Micro Small Medium Large Total

England £3,712,433 £1,010,781 £118,908 £6,193 £4,848,315

Wales £185,100 £50,126 £5,752 £282 £241,260

Scotland £402,995 £107,873 £13,193 £727 £524,789

Northern Ireland

£139,559 £37,964 £4,474 £233 £182,229

UK £4,440,086 £1,206,744 £142,327 £7,435 £5,796,592 Note: totals may not sum due to rounding

Freezing Exemption for Farmed Fishery Products FBOs wishing to make use of the freezing exemption would be required to familiarise themselves with the new freezing exemption. It is estimated that 1 hour would be required per business to read and familiarise themselves with the new legislation, plus an additional hour to disseminate this information to staff. It is estimated that 3,944 food businesses will be affected in Wales by the proposed changes, resulting in 7,888 hours of industry time required to become familiar with the changes. Assuming the median hourly wage rate of a food business manager of £26.1032 per hour, and that one manager per FBO will be required to familiarise themselves with the policy, this would result in a familiarisation cost to industry of £205,908. The table below displays the number of affected businesses by country: Fish farming companies, fish processors, retailers and food service businesses

Micro Small Medium Large Total

England 60,689 16,524 1,944 101 79,258

Wales 3,026 819 94 5 3,944

Scotland 6,588 1,763 216 12 8,579

Northern Ireland

2,281 621 73 4 2,979

UK Total 72,584 19,727 2,327 122 94,760

Note: totals may not sum due to rounding

The table below displays the familiarisation costs for industry associated with preferred option. One-Off Familiarisation Costs to Industry by Country and Firm Size

Micro Small Medium Large Total

England £3,168,458 £862,674 £101,484 £5,285 £4,137,902

Wales £157,978 £42,781 £4,909 £241 £205,908

Scotland £343,945 £92,067 £11,260 £621 £447,892

Northern Ireland

£119,110 £32,401 £3,818 £199 £155,528

UK £3,789,490 £1,029,922 £121,472 £6,346 £4,947,230

Note: totals may not sum due to rounding

32 Wage rate obtained from the Annual Survey of Household Earnings (ASHE) 2011. Median hourly wage rate of „Production

Manager‟, £20.08, uplifted by 30% to account for overheads (20.08*1.3) = 26.104

The freezing exemption for farmed fishery products is available where fish are cultured from embryos and fed exclusively on a diet that cannot contain viable parasites that present a health hazard, and are either exclusively reared in an environment that is free from parasites, or where FBOs can verify through procedures, approved by the competent authority, that they do not present a health hazard with regard to parasites. It is expected that all aquaculture production methods currently in operation in the UK will meet these exemption criteria. On this basis, we envisage no additional costs to UK fish aquaculture businesses resulting from the need to carry out additional risk assessment or verification monitoring, assuming there is no change in farming practices. A freezing derogation will also increase the value of farmed fish supplied for raw consumption, as freezing turns a high quality fresh product into a cheaper frozen commodity product. The table below shows the annual benefit derived from an increase in product value as a result of the freezing exemption, based on central estimates and broken down by country and firm size: Product Value Increases from Freezing Exemption, by UK Country and Firm Size, (£, Central Estimate, per annum)

Micro Small Medium Large Total

England £2,445,838 £665,927 £78,339 £4,080 £3,194,184

Wales £121,948 £33,024 £3,790 £186 £158,947

Scotland £265,502 £71,069 £8,692 £479 £345,743

Northern Ireland

£91,945 £25,011 £2,947 £154 £120,057

UK £2,925,233 £795,031 £93,768 £4,899 £3,818,931 Note: totals may not sum due to rounding

Enforcement Local Authorities enforcing the revised freezing controls and exemptions would be required to familiarise themselves with the revised legislation. We assume that 1 hour would be required per Local Authority for one Environmental Health Officer (EHO) to read and familiarise themselves with the new legislation, plus an additional hour to disseminate this information to staff. All 22 Local Authorities in Wales will be affected by the proposed changes.

To calculate the total familiarisation cost we first need to quantify the familiarisation cost per LA. The familiarisation cost per LA is calculated by multiplying the hourly wage rate of an EHO (£20.4633) by the number of hours required for familiarisation and dissemination (2 hours), resulting in a familiarisation cost per LA of £40.92 (assuming that one official per LA will be required to familiarise themselves with the new policy). This would mean a one off familiarisation cost of £90034. to local authorities in Wales The table below displays the familiarisation cost to enforcement authorities broken down by country.

33 Wage rate obtained from the Annual Survey of Household Earnings, 2011.

(See:http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=15313). Median hourly wage of „Environmental health officers‟) £15.74 + 30% to cover overheads = £20.46).

34 22*1*2*20.462=900

Familiarisation cost to enforcement authorities by country

Number LAs

Familiarisation Cost

England 354 £14,487

Wales 22 £900

Scotland 32 £1,310

Northern Ireland 26 £1,064

UK 434 £17,761 Note: totals may not sum due to rounding

It is assumed that the freezing exemption for farmed fish will reduce the level of enforcement action required to be taken against companies supplying farmed fishery products intended to be consumed raw. The following table shows lower and upper bound estimates including a central estimate of these freezing exemption cost savings to local authorities, broken down by country: Freezing Exemption Cost Savings to Enforcement Authorities by UK Country

Cost Saving

No. of Affected

LAs

lower bound

upper bound

Central Estimate

England 22 £226 £679 £453

Wales 1 £14 £42 £28

Scotland 2 £20 £61 £41

Northern Ireland

2 £17 £50 £33

UK 27 £278 £833 £555

6.14.3 Benefits Option 1 There would be no incremental benefits. Option 2 Freezing Controls for Smoked Fishery Products The extension of freezing controls to all wild cold smoked fishery products may provide reputational benefits to businesses producing these products as customers and consumers can be reassured that appropriate public health controls have been applied for at-risk species that have not undergone processing sufficient to kill any viable parasites that may be present. No additional benefits to enforcement authorities have been identified for this option. The introduction of more risk-based controls for cold smoked fishery products will ensure that consumers are provided with an appropriate level of public health protection in relation to cold smoked products derived from wild species that will now need to be frozen to kill any viable parasites that may be present in the product. Freezing exemption for Farmed Fishery Products All industry representatives and affected businesses consulted in the development of this RIA have stressed that freezing of farmed salmon intended to be consumed raw or almost raw results in significant deterioration in the quality of the fish due to the soft, oily nature of the flesh, making it very difficult to slice into sashimi. The

introduction of a freezing derogation will ensure that product can be supplied fresh, avoiding this quality issue and any potential deterioration in demand for raw product. The freezing exemption may reduce barriers for new companies entering this raw „ready to eat‟ market by removing the need to invest in freezing equipment and infrastructure. The Scottish Salmon Producers Organisation (SSPO) has indicated that individual quick freezing (IQF) of raw material at the initial processing stage (immediately after gutting) is the best way to ensure optimum quality for finished raw products such as sushi and sashimi. The freezing exemption removes the potential need for any new salmon companies entering the market to invest in IQF equipment at production sites. It is likely that the new freezing exemption will help reinforce confidence in the ability of the UK farmed salmon industry to deliver premium fresh product in a timely manner. The SSPO have indicated that the freezing process introduces additional variability and costs into the supply chain that is not consistent with the supply of standard fresh product, and that freezing results in a loss of all the benefits of Scottish provenance and marketing. They highlight that the supply chain needs consistency and certainty of supply to operate effectively and when this consistency is compromised by additional processes, such as freezing, processors may seek alternative options to UK supply resulting in potential market deflection towards Norwegian imports. The ability of producers to carry out the freezing process also becomes a factor in the decision by retailers and food service businesses to buy UK farmed salmon. These factors have the potential to dilute the „locally grown‟ and sustainability messages promoted by the Scottish industry, and could result in a fall in consumer confidence with respect to the quality of UK farmed salmon. The new freezing exemption will remove this additional variability in the supply chain and mitigate any potential impact on the reputation of the Scottish industry that may have otherwise occurred if freezing continued to be a legal requirement. Provision of a freezing derogation for farmed fishery products intended to be consumed raw will provide consumers with a level of public health protection that is appropriate to the risks. The proposal only allows for fishery products to be exempted from the freezing requirements when there is sufficient evidence or risk assessment to show there are no risks to public health from parasitisation, or where those risks are shown to be negligible, ensuring that consumers are not exposed to products that may contain live parasites without first having been frozen.

6.14.4 Enforcement Enforcement of Commission Regulation (EU) 1276/2011 will fall to local authorities in Wales. 6.14.5 Consultation The FSA held ongoing discussions with affected industry sectors as negotiations on the Commission proposal progressed, including individual meetings with the three main farmed fish industry bodies - SSPO, British Trout Association (BTA) and British Marine Finfish Association (BMFA). All three organisations are supportive of the changes and proposed freezing exemption for farmed fish.

An early draft of the proposal was circulated for comment to all interested parties across the UK in January 2011. This was sent to industry, consumer, and enforcement stakeholders. Four responses were received UK-wide which indicated general support for the changes, although a number of questions were raised regards the scope of the proposal, requirements for monitoring data, and alternative treatments. These points were addressed in subsequent drafts of the proposal and draft Commission guidance. In addition, officials from the FSA in Scotland met face to face with a number of individual affected businesses from the production, processing and retail sectors to discuss the impact of the proposals and inform the UK negotiating position. A shortened 4 week public consultation was issued in Wales on the draft RIA between 16 March 2012 and 14 April 2012. No responses were received in Wales, however two responses were received UK-wide, both in support of the amendment to the regulation and in agreement that the changes would lift unnecessary burden on industry. 6.14.6 Competition Assessment The requirements of Commission Regulation (EU) 1276/2011 are not expected to either directly or indirectly limit the number or range of UK suppliers of affected fishery products. The introduction of a freezing exemption for farmed fishery products may increase the competitiveness of FBOs supplying the raw „ready to eat‟ market by removing additional processes and variability in the supply chain. This may help affected UK businesses compete against farmed fish imports from other third countries, particularly imports of farmed salmon from Norway.

Emergency Slaughter Mark 6.15.1 Options Option 1 Do nothing. The EU Regulation will still be applicable in the UK, however, enforcement authorities in Wales will be unable to enforce the provision of a special mark. The UK would be in breach of its EU Treaty obligations Option 2 Allow enforcement authorities in Wales to enforce the provisions of the use of a special mark in Wales. This is the preferred option. 6.15.2 Costs Option 1 There would be no incremental costs. Option 2 There would be a one-off costs to red meat slaughterhouses, red meat cutting plants, producers, wholesalers and retailers of meat products to familiarise themselves with the new Regulation.

It is envisaged that one official per business would take 30 minutes to familiarise themselves with the Regulation, and a further 30 minutes to disseminate this information within the organisation. It is assumed that the Production Manager would be responsible for familiarisation. The median hourly wage rate for a production manager is £26.1035. Multiplying this wage rate with the time required for familiarisation and dissemination (one hour) results in a familiarisation cost per business of approximately £26.10. Multiplying this with the total number of businesses affected (539 in Wales) results in a total one-off familiarisation cost to industry in Wales of approximately £14,042. The table below displays the number of affected business by country:

Summary of All Businesses Affected by the Regulation: Red Meat Slaughterhouses, Red Meat Cutting Plants, Producers, Wholesalers and Retailers of Meat Products, by Firm Size and UK Country

Micro Small Medium Large Total

England 6,847 1,013 188 55 8,104

Wales 449 70 15 5 539

Scotland 751 116 24 7 899

NI 423 64 13 4 504

UK 8,470 1,265 240 71 10,046

The table below shows the familiarisation cost to industry by country:

Familiarisation Costs to Industry, by UK Country and Firm Size

Micro Small Medium Large Total

England £178,656 £26,410 £4,887 £1,435 £211,388

Wales £11,702 £1,833 £387 £120 £14,042

Scotland £19,710 £3,088 £653 £202 £23,654

NI £10,321 £1,350 £168 £39 £11,877

UK £220,389 £32,681 £6,095 £1,796 £260,962 Note: totals may not sum due to rounding

There will be a one-off cost to those slaughterhouses which do not already have the required health mark and that handle emergency slaughter animals. Information from FSA Operations Group suggests that there are 11 red meat slaughterhouses in Wales that do not have the required mark. However, we have been unable to establish from the data which of these slaughterhouses handle emergency slaughtered animals and are therefore required to purchase the mark, making it difficult to monetise the cost to industry. We therefore calculate an indicative cost estimate by assuming that 50% of these establishments (approximately 6 red meat slaughterhouses) in Wales will be required to purchase this mark. The table below shows the number of slaughterhouses that do not have the required mark, by UK country and firm size.

35 Wage rate obtained from the Annual Survey of Household Earnings, 2011, All Employees, median hourly wage rate of

“Managers and Senior Officials: Production Managers”. This includes an overhead of 30% (£20.08*1.3=£26.10)

Red Meat Slaughterhouses without Health Mark, by Firm Size and UK Country

Micro Small Medium Large Total

England 53 24 12 5 94

Wales 6 3 1 1 11

Scotland 8 4 2 1 14

NI 0 0 0 0 0

UK 67 31 15 6 119 Source: FSA Operations Group (2012); firm size proportions calculated based on IDBR (2011) category 1011 (includes slaughterhouses)

The cost of the health mark in Great Britain is £51.6036 per mark. Multiplying the total number of businesses affected (approximately 6) by the cost of purchasing the mark (£51.60) results in a total one-off cost to industry in Wales of approximately £31037. Cost of Purchasing the Health Mark to Industry, by UK Country

Micro Small Medium Large Total

England £1,456 £666 £333 £125 £2,580

Wales £175 £80 £40 £15 £310

Scotland £102 £47 £23 £9 £181

Northern Ireland £0 £0 £0 £0 £0

UK £1,733 £792 £396 £149 £3,070

The Regulation will impose a one-off cost to enforcement authorities that will need to read and familiarise themselves with the Regulation. We envisage that one official per enforcement authority will be required for familiarisation, and that it will take 30 minutes per official to familiarise themselves with the Regulation, and a further 30 minutes to disseminate this information within the organisation; a total familiarisation time of approximately one hour per enforcement authority. We assume that it is the Environmental Health Officer (EHO) that is responsible for familiarisation. The median hourly wage rate of an EHO is £20.4638. Multiplying this wage rate with the time required for familiarisation and dissemination (one hour) results in a familiarisation cost per business of £20.46. Multiplying this with the total number of enforcement authorities results in a total familiarisation cost to enforcement authorities in Wales of approximately £471 as shown in the table below.

Familiarisation Costs to Enforcement, by UK Country

36 The mark itself costs £33, plus £10 courier and VAT (20%) = £51.60 37 119 (Total number of Red Meat Slaughterhouses (RSL) without the required mark in GB)*0.5 (percentage of RSLs requiring

the special health mark) *£51.6 (cost of acquiring the health mark)= £3,070 (total one-off cost to industry of purchasing the mark)

38 Wage rate obtained from the Annual Survey of Household Earnings, 2011, All Employees, median hourly wage rate of “Associate Professional and Technical Occupations: Environmental Health Officers”. This includes an overhead of 30% (£15.74*1.3=£20.46)

England Wales Scotland NI UK

Local Authorities £7,244 £450 £655 £532 £8,881

Port Health Authorities £798 £20 N/A N/A £818

Total £8,042 £471 £655 £532 £9,699

The Regulation will have an effect on red meat cutting plants that handle emergency slaughtered animals. The mark will need to be applied to meat from emergency slaughtered animals when it is packaged, using pre-printed labels carrying the mark. Alternatively, a stamp similar to the ones used in the slaughterhouse can be used, which is usually the case when a cutting plant is co-located with a slaughterhouse that has the mark. The FSA has been unable to obtain information on the number of cutting plants that do not have the required pre-printed labels. However, FSA Operations Group envisage that this cost would be negligible as only a small number of cutting plants accept emergency-slaughtered animals. It is assumed that these plants would already have the required labels. The identification of meat from emergency slaughtered animals and the restrictions on its marketability may result in a decrease in its value, with fewer slaughterhouses ready to accept such animals and fewer businesses willing to process their meat. However, lack of data and uncertainty on the type and volume of products traded make it difficult to quantify and monetise this potential cost. 6.15.3 Benefits Option 1 There would be no incremental benefits. Option 2 The Regulation is associated with benefits to consumers as it improves the traceability of meat from animals slaughtered outside of an approved slaughterhouse as it will bear the necessary health mark thus enabling consumer choice. 6.15.5 Consultation A twelve week public consultation was carried out in 201039 did not elicit any concerns from industry or stakeholders about the format of the special mark. No further evidence was received with regard to costs or benefits resulting from the measure or the effect on sustainability or other identified areas of impact. The FSA conducted a formal public consultation from 6 April to 23 June 2011 on the draft Food Hygiene (Wales) (Amendment) (No.2) Regulations 2012, the response from Association of Independent Meat Suppliers (AIMS) raised concerns about the national mark. AIMS‟ view was that when the special health mark is applied under the supervision of an Official Veterinarian, the current rules already prevent the meat from being given an oval identification mark when cut or further processed. AIMS considers that there is no EU requirement for meat preparations, meat products, mince meat, MSM or meat products to bear a special identification mark if they are derived from meat from emergency slaughtered animals and that there is therefore no need for the proposed Regulations to go beyond describing the special health mark as currently used under the supervision of official veterinarians.

39 http://www.food.gov.uk/news/consultations/consultwales/2010/foodhygieneregs2010walesamend2

In response AIMs argued further that if a national requirement was introduced on all FBOs, as proposed, to apply a special identification mark, it would introduce an unnecessary cost burden on many registered premises such as caterers and butchers and inevitably decrease the number of outlets available for such meat, and drive down its price. Consequently, AIMs argued, any reduction in returns for the limited number of slaughterhouses willing to carry out emergency slaughter on the farm would in turn deprive many farmers of having the option of having injured animals slaughtered on farm for human consumption, and receiving some payment. They would instead have to pay for animals to be killed for animal by-product production. This in turn would result in delaying decisions to slaughter injured animals and have a negative effect on animal welfare. AIMS did not comment on the format of the special mark. The National Farmers Union (NFU) also responded with similar concerns but did not comment on the format of the special mark. In this RIA the FSA has made it clear that the requirements for emergency slaughter introduced by Regulation (EC) No 853/2004 are much more restrictive than had applied prior to its coming into force January 2006 (i.e. to what previously were termed „casualty‟ animals) and that the impact of those requirements was previously assessed at that time. The purpose of this consultation was therefore restricted to the format that the special health mark would take, on which neither AIMS or the NFU provided comments.

When this proposed national measure was subject to earlier consultation (as required under the EU Technical Standards arrangements) in the EU, the European Commission insisted that it should apply not only to carcases and the fresh meat derived from animal subject to emergency slaughter as had originally been proposed, but should also cover meat preparations, minced meat, meat products and mechanically separated meat (MSM). The text of the measure was therefore amended to accommodate the Commission‟s view. 6.15.6 Competition Assessment The proposal is unlikely to affect competition.