Curd Cheese (Restriction on Placing on the Market) (England) Regulations 2006

My Lords, I understand the importance of supporting the UK dairy industry and the concern over the treatment of a relatively small cheese-maker in Lancashire. The Government have not panicked, but this is a complex case and I need to explain as carefully as possible what has happened in order to answer some of the concerns expressed. First, I shall speak about the interim judgment, to get it out of the way. It required the Commission to withdraw a notification that it had placed on the rapid-alert system, which is the mechanism to notify other member states of food incidents that may affect them. The Court of First Instance did not make any judgment about the safety of the curd cheese produced at Bowland, nor did it prevent the Commission taking the further action that it took against the company. People may disagree with the Commission’s action, but the Court of First Instance did not prevent it doing so and it did not go into the merits of how the curd cheese was produced. I shall now address the key issues arising in a highly unusual case. I shall begin by describing the background to the event that resulted in the Commission using emergency safeguard provisions to adopt Commission Decision 2006/694/EC prohibiting the marketing throughout the European Union of curd cheese manufactured by Bowland Dairy Products Ltd in Lancashire. I shall also explain why, in the Government’s view, this statutory instrument, which gives effect to that Commission decision in England, should not be annulled. The background to the decision is complex. During an audit of the UK’s implementation of new EU food hygiene legislation in May and June this year, which was carried out by the Commission’s Food and Veterinary Office, FVO inspectors visited Bowland, which was producing curd cheese for sale to other EU member states for further processing. The FVO inspectors examined documentation at Bowland and identified what they considered to be the sale of dairy products made from raw materials unfit for human consumption. At the end of the audit, the FVO demanded immediate action to addressthe issues identified. It was supported by officials of the European Commission’s Health and Consumer Protection Directorate General, known as DG SANCO, in Brussels. They immediately called into question a number of the procedures and operations employed at Bowland, including the practice known as cheese cleaning or cheese recovery, involving the removal of mould from cheese, and repackaging the cheese, which was then despatched to other businesses for further processing. The Commission also questioned the production of curd cheese using milk that had been rejected by other companies for failing a rapid screening test for antibiotic residues, but which Bowland tested further and used if the result was negative. The Commission also had concerns about the use of interface milk, which is a mixture of milk and water, and whether such milk contained residues of cleaning chemicals. It argued that all such practices gave rise to unacceptable risks to consumers and should be halted forthwith. The Food Standards Agency, the central authority in the UK responsible for food safety matters, urgently launched an investigation into the FVO findings. To assist in that process, the company closed voluntarily for 10 days, during which the FSA and enforcement officers from the local authority fully audited the premises and the controls and procedures then in place. The purpose of that investigation was to determine whether the practices identified by the FVO should be allowed to continue and, if so, under what conditions. I should stress at this point that the FSA investigation did not identify any specific food safety risks arising from the curd cheese production procedures, but the company agreed to implement changes recommended by the FSA to a number of its processes and working practices and to improve its food safety management system. The cheese recovery operation was halted permanently, and the company was informed that it could restart operations only following the granting of the required approval from the local authority. On that basis, the company restarted curd cheese production towards the end of June, and the Commission was informed of the outcome of the FSA’s investigation. Although the FSA was content for the Bowland curd cheese manufacturing operation to resume, officials in the Commission’s DG SANCO were not so persuaded. The Commission did not inform other member states of the FSA’s position on Bowland by means of the rapid-alert system. There followed several months of intense discussion and negotiation between DG SANCO and FSA officials about the legality and safety of the practices in question. Despite those discussions, there remained differences of view about how the legislation should be interpreted and the science underpinning the interpretation. In the mean time, the company found it increasingly difficult to trade, largely because of the reluctance of the authorities in other member states to permit the resumption of trade in a product which the Commission continued to regard as unfit for human consumption. At DG SANCO’s request, the FVO carried outa further inspection at Bowland at the end of September to audit the company against the revised procedures specified earlier by the FSA. The FVO did not provide any immediate feedback on its findings to the UK authorities. However, it did report to DG SANCO in Brussels that the company was continuing to manufacture curd cheese using milk that had failed a rapid-screening test for antibiotic residues and to use interface milk. The FVO also criticised the UK’s approach to the enforcement of EU food hygiene rules. As a result of the FVO’s findings, Commission officials announced three related measures: first, that the Commission would take appropriate action itself in respect of Bowland Dairy Products Ltd; secondly, that it would initiate legal proceedings against the UK for failing properly to implement and enforce EU food hygiene legislation; and, thirdly, that the Food and Veterinary Office would be asked to carry out a follow-up mission to the UK in late November to inspect the entire UK dairy industry. So far as the first of those actions is concerned, the Commission concluded that Bowland’s continued production of curd cheese using milk that did not, in its view, comply with EU hygiene legislation presented unacceptable risks to public health and that suchrisks could be contained only by Community-wide measures. Accordingly, the Commission used the emergency safeguard measures provided for in the General Food Law Regulation 178/2002 to table a draft decision for consideration and vote by EU member states on 6 October. The purpose of the decision was to require all member states to prohibit the placing on the market of all curd cheese manufactured by Bowland and to trace, detain and dispose of all curd cheese from the company. The decision’s recitals set out in some detail the Commission’s interpretation of the legislative requirements relating to testing milk for antibiotic residues. The UK was unable to support the Commission’s decision. In a statement for the minutes, the UK made clear that it took food safety matters very seriously and shared the Commission’s desire to protect public health. It indicated that the FSA had taken a number of corrective measures at the company since June and had worked with the Commission to reach an appropriate solution. However, it was necessary for the Food Standards Agency to act on a sound evidence base and, in protecting the consumer, to be proportionate in its actions. In this case, there were genuine differences of views on the science behind testing for antibiotics in milk, and they had not yet been resolved. Because of different views of the science underpinning the Commission’s interpretation of the rules relating to testing for antibiotics in milk, theUK abstained and made that full statement. Of25 member states, 22 voted in favour of the Commission’s proposal, so, even if the UK had voted, there would have been an overwhelming majority in favour. The Commission subsequently formally adopted the decision into Community law, and it fell to all member states to give legal effect to it. In England that was achieved by means of the Curd Cheese (Restriction on Placing on the Market) (England) Regulations 2006. Similar steps have been taken to implement the decision in Scotland, Wales and Northern Ireland. As a consequence, the company’s approved status was withdrawn by the local authority, and measures were put in hand to detain and dispose of the remaining curd cheese stored at Bowland. As well as taking direct action in respect of Bowland Dairy Products Limited, the Commission initiated accelerated infraction proceedings against the UK for failing in its duty to properly implement and enforce EU food hygiene rules in the dairy sector. In considering how to respond to this legal action, the Government took into consideration a number of different factors. In particular, we recognised that almost all member states had implicitly agreed to the Commission’s interpretation of the legislation regarding the testing of milk for antibiotic residues, as set out in the Commission’s decision applying to Bowland. In addition, the Commission made a commitment to discuss antibiotic testing of milk with a wide range of experts across the EU, and to undertake a risk assessment of cheese recovery operations in the EU. With the agreement of other relevant government departments, and following discussions with representatives of the dairy industry, the Food Standards Agency subsequently instructed enforcement authorities across the UK to apply a revised approach to the enforcement of EU hygiene rules in the dairy sector, in line with the Commission’s interpretation. In particular, enforcement authorities were advised that where raw milk tests positive in antibiotic screening, the food business operatorhas two options: either to carry out chemical confirmatory tests that will identify whether any antibiotic exceeds the maximum residue level or to reject the milk and dispose of it as an animal by-product. Appropriate advice was also providedin respect of the other practices about whichthe Commission had concerns. Given the wider implications of the changed approach, milk producers were also alerted to the issue and advised on measures that they could take to prevent antibiotic contamination of milk in the first place. In responding to the Commission’s legal action, the UK was therefore able to explain that a revised approach was being implemented in the UK, in line with the Commission’s views. Commission officials have subsequently informed the UK authorities that, on this basis, they are recommending that legal action against the UK be terminated. The FVO’s follow-up mission to the UK tookplace a fortnight ago. I am pleased to report that no major issues were identified, and there was general acknowledgement of the steps taken by the UKto conform to the European Commission’s interpretation of the law. We now await the formal report. Although we have heard today a number of reasons to support the annulment of the statutory instrument, noble Lords will appreciate that, as a member of the European Union, the UK was obliged to implement the terms of the Commission’s decision relating to Bowland. Failure to implement and enforce the decision’s requirements in domestic legislation would constitute a serious breach of our obligations under the EC treaty and would almost certainly result in the Commission reopening infraction proceedings against the UK. It is not immediately apparent that the UK Government would have sufficiently strong reasons to challenge such proceedings in the European Court of Justice. The European Commission has also signalled its intention to either modify or lift the prohibition on Bowland once it has received the appropriate assurances from the UK authorities that all curd cheese manufactured by Bowland before the prohibition came into force has been properly disposed of as an animal by-product and has not been allowed to enter the food chain. We understand that appropriate disposal plans have been drawn up and are to be put into effect shortly. I recognise noble Lords’ strong views about how Bowland has been affected, but I hope that I have clearly explained the reasons for the Commission’s decision and the need for the statutory instrument. The Commission’s approach throughout has been motivated by its desire to protect public health, and it would be wrong simply to categorise this as an attempt by it to usurp the authority and powers of the FSA. That is not the UK Government’s view. The fact remains that the Community legislation has been agreed and we are required to implement it. Not to do so would put us in conflict with the European institutions, and it would be a conflict that, in this case, we would not win. Looking forward, I reiterate that, although there remain differences of view between the UK experts and the Commission about the science underpinning the EU rules on antibiotic testing for milk, the FSA very much welcomes the Commission’s commitment to further consider with member states and others the scientific and practical implications of testing milk for antibiotics. The FSA has urged this for some time, and we hope that such discussions in the expert group can commence in the new year. It goes without saying—but I will say it anyway—that whatever the outcome of those discussions, we will certainly expect the Commission in Brussels to make the necessary changes to legislation and to provide clear guidance for the whole of the Community’s dairy industry to follow. As usual, the UK wants to play a full part in those discussions, working with the Commission in a transparent way to protect consumer health and, more generally, to make the single market work for all its citizens. This was an unfortunate case, but it is a more complicated case and set of circumstances than some noble Lords acknowledge. We think that we have proceeded in the right way and that this statutory instrument is required legislation.