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Kernel
The Scotland Food and Drink Bulletin

Spring 2019
Kernel The Scotland Food and Drink Bulletin - CMS_LawTax_Negative_28-100.eps - CMS LAW-NOW
4 #undertheinfluence: Transparency and social influencer marketing

                  6 Say what? Reform to the Scots law of defamation

                  8 Consultation on food labelling: changing food allergen information laws

                 10 Employee ownership: a slice of the pie

                 11 Mass equal pay claims – are you next?

                 13 Tackling plastics, packaging and waste: significant UK proposals announced

                 15 Seminar – It’s a wrap: the end of plastic packaging as we know it

2 | Kernel – The Scotland Food and Drink Bulletin – Spring 2019
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Kernel

Welcome to the latest issue of Kernel, our Scotland food and drink bulletin.
In Kernel, we examine current legal issues affecting the Scottish food and
drink industry and provide bite-size articles on key developments.

In this issue, we consider the following:

——#undertheinfluence: Transparency and social influencer marketing

——Say what? Reform to the Scots law of defamation

——Consultation on food labelling: changing food allergen information laws

——Employee ownership: a slice of the pie

——Mass equal pay claims – are you next?

——Tackling plastics, packaging and waste: significant UK proposals announced

——Seminar – It’s a wrap: the end of plastic packaging as we know it

If you would like to discuss any of the articles in this edition of Kernel
or wish to provide any feedback, please contact Alison McCartney at
alison.mccartney@cms-cmno.com

                                         CMS_LawTax_Negative_28-100.eps

  Kernel
  The Scotland Food and Drink Bulletin

  Spring 2019

                                                                               3
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#undertheinfluence:
           Transparency and social
           influencer marketing

           The use of social media and social ‘influencers’ to market and promote goods
           and services is undergoing exponential growth. In the past few months, the
           authorities have cast a strong spotlight on the authenticity and transparency of
           social posts, given their potential to influence consumer purchasing decisions.
           Recent guidance issued by the CMA can help brands ensure compliance and
           avoid reputational damage.

           At around 4:30pm on a regular Monday afternoon in          In the competitive food and drink market, these social
           February, health food empire Deliciously Ella posted an    media pied pipers are lucrative marketing allies for
           Instagram image of their new Nut Butter Balls, a recent    brands established and new. Consider London-based
           snack product to hit UK retailers. The post asked for      @aliceliveing, an everyday twenty-something who
           flavour suggestions for its next batch. Within just four   started using Instagram to document her diet and
           hours, the post had received 1,674 suggestions and         fitness journey. Over the past few years she has amassed
           8,408 ‘likes’.                                             over 637k followers and posts images of delicious
                                                                      breakfasts using Clarence Court eggs. Here in Scotland
           This is just a snapshot of the myriad consumer             there’s @naturallystefanie (290k followers at the time of
           engagement and awareness opportunities presented           writing), a lifestyle blogger who posts recipes using
           by social networks like Instagram, Facebook, Twitter       MyProtein products, @tristancameronharper (29.3k)
           and YouTube, which happily come at a cheaper cost          who can be seen exploring the Highlands whilst
           than traditional channels like TV and print.               enjoying Graham’s yoghurts and @glasgowfoodgeek
                                                                      (30.3k) who reviews Glasgow restaurants and offers
           Whether your brand is looking to grow market               vouchers and discounts to her followers.
           recognition or retain existing customer loyalty,
           investment in social media is no doubt a key part of
           your marketing strategy. You may even have asked a
                                                                      Regulatory crackdown
           social influencer to talk about one of your products or
                                                                      In the past year questions have arisen regarding the
           services on their Facebook or Instagram accounts.
                                                                      authenticity and genuineness of influencer posts.
                                                                      Did the influencer independently purchase and cook
           The new trendsetters                                       the salmon steak they have earnestly reviewed on their
                                                                      YouTube channel, or did they merely receive GBP 5,000
           Social influencers are people who have accumulated a       to peddle a product that arrived on their doorstep and
           large number of ‘followers’ on social media channels.      which they didn’t even taste?
           In principle, their followers trust them and use them as
           a source for purchasing decisions. Film, TV and sports     It is no surprise that UK watchdogs, the Advertising
           celebrities are the usual suspects, however some of the    Standards Authority (ASA) and the Competition and
           most successful influencers are everyday people who        Markets Authority (CMA), have ramped up their
           have attracted a fan base due to their knowledge and       investigations in this area to ensure that posts which are
           expertise in a certain area (often coupled with great      triggered by payment and/or subject to third party
           photography skills).                                       editorial control are transparent as such. Failure to do

4 | Kernel – The Scotland Food and Drink Bulletin – Spring 2019
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ensure this may be deemed misleading to consumers            When considering prominence, the speed with which a
and result in investigation, enforcement action and          consumer can scroll through posts on a social network
negative publicity.                                          newsfeed should be a key consideration. The disclosure
                                                             (for example #ad) should not be hidden at the end of or
In January, hundreds of influencers received warning         among a block of other text and/or hashtags.
letters from the ASA for flouting the transparency rules.
The CMA separately obtained formal commitments from          Helpfully, the CMA sets out a number of frequently-
16 celebrities including Rita Ora, Ellie Goulding and        used practices which it considers are not compliant.
Alexa Chung, to clearly disclose on their accounts if they   These include:
have been paid or received free gifts from any brands
                                                             —— tagging a brand without additional disclosure
they refer to. To drum the message even louder, the
CMA recently new guidance directed at influencers:           —— using ambiguous language without additional
Social media endorsements: being transparent with               disclosure (for example ‘thank you’, ‘made possible
your followers.                                                 by’ or ‘in collaboration with’)

                                                             —— use of the hashtags: #sp; #spon; #client; #collab
What does the CMA guidance say?                              —— disclosure of the commercial affiliation
                                                                only on an influencer’s front, home or
The CMA guidance more or less reiterates previous
                                                                profile page. Each relevant post needs to
comments from the ASA and the CMA in this area,
                                                                contain an appropriate disclosure.
though it does help clarify the adequacy of certain
disclosures. The key instruction is that where the
influencer has received any payment, incentive or            Comment
other reward from a brand and that brand is mentioned
in a social media post, the post must be clear that it is    Given this is a high priority area for the authorities and
an ‘ad’. This applies even where the relationship is not     the resulting press coverage has been significant, brands
current, but there was a relationship between the            would be well advised to familiarise themselves with the
parties within the last year.                                CMA guidance as well as previous directions given by
                                                             the ASA in this area. In addition, we recommend
Even where the influencer has full control over the          carefully considering your choice of influencers and
content (i.e. no editorial input from the brand), the        ensuring your contracts include adequate protections to
content must still be identifiable as an ad. This goes a     mitigate legal and PR risk. This might include ensuring a
step further than the ASA’s previous comments, which         right to provide input and/or prior approval for any
suggested that both payment and editorial control            posts that feature your brand.
triggered the need to disclose a post as an ad.

Additional points in the CMA guidance include                              Victoria Bayly
ensuring that posts do not suggest that the influencer                     Associate
has purchased something of their own accord when in                        TT +44 141 304 6017
fact it was gifted or loaned, or that the influencer has                   EE victoria.bayly@cms-cmno.com
used the product or service themselves when this is not
the case.

The law and the guidance is not prescriptive on exactly
how influencers should declare relationships with
brands, but in any case it must be ‘transparent, easy
to understand, unambiguous, timely and prominent’
and upfront without the need to ‘click through’ to find
more information. The CMA suggests the following in
this regard:

—— prominent use of the terms ‘Advertisement Feature’
   or ‘Advertisement Promotion’

—— use of the hashtags #Ad or #Advert

—— on Instagram, using the ‘Paid Partnership’ tool (in
   addition to one of the above hashtags).

                                                                                                                          5
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Say what? Reform to the
           Scots law of defamation

           The Scottish Government is currently consulting on reforms to the Scots law of
           defamation, the area of law which aims to protect individual and business
           reputations from false statements. In an era of online reviews and viral sharing of
           opinion, protecting reputations is of critical importance to many food and drink
           businesses operating in Scotland.

           Why is the Scottish Government                               What might change?
           consulting?                                                  This consultation seeks views on enacting some
                                                                        of the recommendations made by the Scottish Law
           The Scottish Government’s stated aim is to create a law
                                                                        Commission in 2017.
           of defamation ‘fit for 21st century Scotland, with a clear
           and accessible framework that balances freedom of
                                                                        Among the most important of the changes being
           expression and protection of individual reputation’.
                                                                        consulted upon are the following:
           The consultation follows on from the December 2017
           report published by the Scottish Law Commission on           1. Serious harm: the Scottish Government seeks
           its recommended reforms in this area.                           views on the introduction of threshold test for
                                                                           defamation, which is to be known as ‘serious harm’.
           The Scots law of defamation is largely rooted in                This test would serve as a barrier to minor or
           the common law, with some statutory footing, which              frivolous claims, meaning that judicial resources in
           was established in 1996. However, Scots law has                 the Scottish Courts were focused on only the most
           arguably not kept pace with developments in England.            serious cases, where ‘serious harm’ is suffered.
           The Defamation Act 2013 (which is largely inapplicable          A similar test was introduced in England & Wales
           in Scotland) brought wide-ranging changes to the                under the Defamation Act 2013 and to that extent,
           law of defamation in England & Wales. The current               if enacted, would bring Scotland into line with them.
           consultation seeks to bring Scotland arguably more
                                                                        2. Secondary publishers: under the current law,
           into line with the developments seen down south
                                                                           if someone other than the original author, a
           since the Defamation Act 2013 came into force.
                                                                           ‘secondary publisher’, publishes a defamatory
                                                                           statement, it is actionable against them just as
           Just as one could not have predicted back in 1996 the
                                                                           it would be against the original author. The law
           impact that online technology would have on society
                                                                           presumes that the secondary publication was
           in 2019, so too the law did not foresee the immense
                                                                           intentional. The proposed changes would provide
           impact the social media age would have on defamation.
                                                                           that no defamation proceedings can be brought
           It is now easier than ever to make false statements,
                                                                           unless they are against the author, editor or
           some of which may turn viral in the blink of an eye.
                                                                           publisher of the statement, who must be responsible
           The changes seek to strike a balance between making
                                                                           for its content and/or the decision to publish it.
           it easier to take action when this happens and
                                                                           This would replace the current defence of innocent
           preventing the Courts being flooded with trivial claims.
                                                                           dissemination and mean that liability is removed
                                                                           for secondary publication in the Scots law of
                                                                           defamation, again, bringing Scotland into line
                                                                           with developments in England.

6 | Kernel – The Scotland Food and Drink Bulletin – Spring 2019
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3. Honest opinion: the current law recognises that           If you would like to discuss protecting and managing
   some statements are statements of fact and some           your reputation in the sector, please contact our CMS
   merely comments or opinions, which may be                 Scotland Food & Drink contacts, Graeme MacLeod and
   disagreed with. Currently, if a statement is properly     Emma Boffey.
   ‘fair comment’, it will not constitute defamation.
   The burden on proving fair comment however
                                                                          Graeme MacLeod
   is onerous and technical. Under the current
                                                                          Partner
   consultation, the Scottish Government wants
                                                                          TT +44 131 200 7686
   views on whether to recast the defence as
                                                                          EE graeme.macleod@cms-cmno.com
   ‘honest opinion’.

4. Limitation: under the current law, actions for
   defamation must be brought within three years
   following the publication first coming to the                          Emma Boffey
   attention of the person bringing the action.                           Associate
   The proposed reforms might see that period                             TT +44 131 200 7551
   shortened to one year following first publication                      EE emma.boffey@cms-cmno.com
   of the false statement. While it is likely the Scottish
   courts would retain equitable powers to override
   any delay in bringing actions in appropriate
   circumstances, the Scottish Government seeks
   views on whether such a short period is too
   draconian or unworkable.

The Scottish Government’s consultation is open until
5pm on 5 April 2019. It heralds important potential
changes in the Scots law of defamation and for that
reason, will be of keen interest to all businesses and
individuals who are particularly exposed to online
comment, review and critique, as the food and drink
sector in Scotland is.

                                                                                                                     7
Consultation on food
           labelling: changing food
           allergen information laws

            The Government has launched a consultation seeking comment in relation to
            proposed changes to allergen information on pre-packed foods (link below).
            The proposed amendments would apply to both the domestic Food Information
            Regulations 2014 (England) and parallel FIR regulations in Northern Ireland, Scotland
            and Wales. The information gathered during the consultation will be published
            following its closure, and will be taken into account in relation to future regulation.

            The focus of the consultation is on Pre-Packed Foods        —— Mandating allergen-only labelling on
            for Direct Sale (PPDS), which ultimately means foods           food packaging.
            which are packed on the retail site where they are
                                                                        —— Mandating ‘ask the staff’ labels on all products,
            later sold. There is no legislative definition of PPDS
                                                                           with supporting information for consumers available
            and the consultation asks for comments on the scope
                                                                           in writing. The information could include allergen
            of the labelling changes envisaged, and for now the
                                                                           information on the full list of ingredients.
            consultation stipulates that it expects businesses and
            Local Authorities to follow the interpretation set out in   —— Promoting best practice around communicating
            the Food Standard Authority’s technical guidance on            allergen information to consumers. Although on the
            allergen labelling, which is: ‘foods that have been            face of it there would not be a change in the law,
            packed on the same premises from which they are                there would be additional activity to promote best
            being sold.’                                                   practice within the current legislative framework.
                                                                           This may include: Best practice guidance for the
            The current provisions require (in brief) that foods           catering sector to be produced by FSA and made
            prepacked for direct sale are treated in the same way as       available to all local authorities; Cross-Stakeholder
            non-prepacked foods, both being made on the premises           conference with businesses hosted by Defra and
            where they are then sold. Currently, these foods are not       FSA to discuss best practice and encourage
            required to carry labels, and information on allergens         change without amendments to legislation;
            can be conveyed by any means the operator chooses.             Public information campaign to highlight allergen
            It is stipulated also that if the information is to be         knowledge and awareness for food businesses
            orally communicated customers must be clearly notified         and the general public. Comment is also welcome
            by way of a label, a sign or a menu that allergen              on whether this should be coupled with other
            information is available and will be supplied on request.      options above.

                                                                        The change comes after the Inquest of Natasha
            Food businesses and allergy sufferers are being
                                                                        Ednan-Laperouse who tragically died as a result of an
            invited to have their say on four options put forward
                                                                        allergy to the contents of on-site pre-packed foods.
            to change the way information is provided on
                                                                        The Coroner had gathered comments by way of
            packaging, including:
                                                                        response to queries raised of the parties to those
            —— Mandating full ingredient list labelling. This could     proceedings. Michael Gove, Secretary of State for
               include allergens being emphasised in bold as for        Environment, Food and Rural Affairs has stated that:
               prepacked foods.

8 | Kernel – The Scotland Food and Drink Bulletin – Spring 2019
Esme Saynor
—— Natasha’s parents have suffered a terrible loss, and I
                                                            Senior Associate
   want to pay tribute to Nadim and Tanya for their
                                                            TT +44 114 279 4245
   inspirational work to deliver Natasha’s law. We want
                                                            EE esme.saynor@cms-cmno.com
   to ensure that labels are clearer and that the rules
   for businesses are more consistent - so that allergy
   sufferers in this country can have confidence in the
   safety of their food. Many businesses are already        Fiona Carter
   bringing change on board independently, and in the       Consultant
   meantime they should continue doing all they can to      TT +44 20 7367 2672
   give consumers the information they need.                EE fiona.carter@cms-cmno.com
We refer also to our previous article which referred to
these changes on the horizon, which you can also read
here: Food Allergen Labelling a Catalyst For Change

If you wish to contribute you should follow this link
and complete the Consultation, you have until 11:45
on 29 March 2019.

                                                                                           9
Employee ownership:
           a slice of the pie

           The Employee-ownership model has entered the mainstream of the UK economy
           thanks in part to the tax reliefs introduced by the Finance Act 2014 that benefit
           owners and employees.

           The Top-50 UK employee-owned companies have                 Employee-owned practices are modern, innovative
           combined sales of approximately GBP 23bn and                and fair and they appeal to employees who want to
           employ approximately 175,000 employees. Employee            help shape their workplace without having to invest
           Ownership Association’s figures also show that four         financially. Employees of such companies are also
           food and drinks companies have broken into the              entitled to an income tax exemption on bonuses
           UK’s top 50 largest employee-owned companies.               up to GBP 3,600 per year.

           Employee-ownership works at every stage of a                Wilkin and Sons, owners of various brands including
           company’s lifecycle. However, two of its key features are   ‘Tiptree’ converted to an employee ownership model to
           in succession planning and maintaining independence.        protect its independence and put in place continuity
           Owners are able to avoid complex and protracted sale        planning, allowing the Wilkin family to exit. Now other
           negotiations by selling a controlling interest to a trust   food and drink companies are following their lead,
           created for the company’s employees and unlike on a         with companies such as: Parfetts, Riverford Organic
           conventional sale, the sale proceeds are entirely exempt    Farmers and Fresca Group reporting growth following
           from capital gains tax. Not all shareholders require to     conversion. In addition, the recently appointed chairman
           sell their shares and the selling directors can remain in   of ‘Scotland Food & Drink’ is the co-founder of
           post after the sale. The shares are sold to a trust for a   Aquascot, one of Scotland’s largest employee-owned
           price determined by a jointly appointed share valuation     companies. The majority of these companies were
           expert. The profits generated by the business each year     family businesses and by introducing employee share
           are paid into the trust to pay the outgoing shareholders    and benefit schemes, employees have reported that the
           for the purchase price (larger buy-outs can also be         companies have retained their family feel.
           financed by bank lending).
                                                                       Scotland Food & Drink has set a target of making
           CASS Business School has conducted research for the         food and drink Scotland’s most valuable industry by
           Department for Business, Innovation and Skills on           2030 – recognised at home and abroad as a model of
           employee owned companies and their findings were            collaboration. Employee-ownership could be the key to
           that such companies:                                        realising this ambition.

           —— plan more for the long term
                                                                                    Jack Letson
           —— get more of their growth from adding new                              Partner
              customers                                                             TT +44 141 304 6147
           —— invest more in people                                                 EE jack.letson@cms-cmno.com

           —— have a more positive media image.

10 | Kernel – The Scotland Food and Drink Bulletin – Spring 2019
Mass equal pay claims –
are you next?

Around 30,000 shop floor workers have cleared the latest hurdle in their equal
pay challenge against their supermarket employer, as a result of the Court of
Appeal’s decision in ASDA v Brierley.

The case is spearheading a wave of equal pay claims          Further, in Brierely, the fact that the claimants’ pay is set
against supermarket employers, with female claimants         by a board committee and comparators’ by depot
arguing they are entitled to equal pay with male depot       management as part of a collective bargaining process is
colleagues. The trend looks set to spill beyond the          trumped by the fact that it is the Executive board, a
confines of the supermarket aisle, quite possibly to other   ‘single-source’ who can review and change the pay of
food & drink sector employers. Given that historically       both groups if necessary.
mass equal pay litigation has been mainly public sector
focussed this is likely to be new territory for many         If you do identify gender segregated roles within your
private sector organisations. We take a look at what         workforce with a pay disparity, claimants must be
steps your business can take to determine if it is           carrying out work of ‘equal value’ with their
vulnerable, why it matters and what steps it can             comparators in order to succeed. Determining ‘equal
take to best protect itself.                                 value’ is notoriously difficult. A points based system is
                                                             often used, awarding points to factors such as mental
Under the Equality Act 2010, women are entitled to           skills, physical effort, initiative & independence and
equal pay with men who carry out the same /similar           knowledge. If the jobs are scored the same (or similar)
work, work rated as equivalent under a job evaluation        they are of equal value. The process is similar to a JES
scheme (JES) or work of equal value. Based on the            and indeed, a valid JES gives an employer an automatic
pattern of supermarket cases to date, it is organisations    defence to an equal value claim if the claimant and the
where there are predominantly male and female                comparator have been graded differently under the JES.
dominated roles who are the most likely target of mass       Employers concerned about equal pay exposure could
claims, if one group earns more than the other in pay,       therefore implement such a scheme or, for a more
allowances and other bonuses.                                light-touch approach, carry out an equal pay audit or
                                                             job benchmarking exercise which will give an indication
The connection between the roles of potential claimants      of whether roles may be of ‘equal value’ or not.
and comparators will not always be obvious. They may
be carried out at different locations, by employees in       These types of exercises also give an employer an
different divisions and under separately negotiated          opportunity to document any rationale for pay
terms. However, a claimant can compare themselves to         discrepancies. This is helpful as, even if equal value
a comparator at a different location if the comparator’s     is established, employers have the opportunity to
terms would be the same if he worked at the same             explain that differences in pay are not because of sex.
location as the claimant. This is the case even if the       We understand for example that ASDA justifies the
claimant and comparator would never work at the same         pay difference on the basis that depot employees
location due to the practical requirements of their roles.   work anti-social hours in uncomfortable conditions
                                                             but it is yet to be seen whether the Court agrees with
                                                             this and whether it is a proportionate way of ASDA
                                                             achieving its aims.

                                                                                                                             11
Gillian MacLellan
           The repercussions for employers who unsuccessfully
                                                                       Partner
           defend such claims are huge. Claimants are entitled to
                                                                       TT +44 141 304 6114
           five years’ back pay (six in England) and equal pay going
                                                                       EE gillian.maclellan@cms-cmno.com
           forward. For employers who do identify an exposure,
           there are a number of robust options, including
           equalising pay or implementing pay protection, but
           these come with their own challenges. Softer measures,
           such as encouraging employees into roles dominated by       Catriona Aldridge
           the other sex, are also likely to assist on a longer term   Senior Associate
           basis and may form part of a wider gender pay gap           TT +44 131 200 7350
           strategy. Having transparent pay, bonus and promotion       EE catriona.aldridge@cms-cmno.com
           policies also helps take the heat out of the situation.
           We have found that employees who properly
           understand the remuneration structure and reasons for
           any difference are less likely to suspect discrimination
           and take legal action.

12 | Kernel – The Scotland Food and Drink Bulletin – Spring 2019
Tackling plastics, packaging
and waste: significant UK
proposals announced
On 18 February 2019, consultations relating to packaging, plastic use and waste
management were launched with major implications for retailers and food business
operators (‘FBOs’), in particular, together with others in the resource chain.

At the heart of the proposals is a desire to trigger       Chancellor and legislated in a future Finance Bill which is
behavioural change, reduce virgin material use, waste,     subject to review on an ongoing basis. The Government
emissions and environmental impacts. Maximisation of       has stated that the tax rate will be one which is
resources encouraging the redesign and reduction of        significant enough to change manufacturer behaviour
unnecessary packaging permeates throughout the             and to drive demand for recycled plastic.
consultations. The role of plastic has gained particular
legislative traction. The key incentives are financial:
the proposals aim to place the costs of managing
                                                           A Deposit Return Scheme (‘DRS’)
environmental impacts firmly onto producers and the        for beverage containers in England,
Government expects to raise between GBP 800m and
GBP 1bn a year from changes to the packaging waste
                                                           Wales and Northern Ireland
regime alone.
                                                           The consultation, jointly undertaken by DEFRA, the
                                                           Welsh Government and DAERA, follows a separate
A tax on plastic packaging with less                       consultation by the Scottish Government on establishing
                                                           a DRS in Scotland which closed on 25 September 2018.
than 30% recycled content                                  The consultation paper states the UK Government
                                                           will work closely with devolved administrations in this
The proposed tax would apply to all plastic packaging
                                                           policy area, but at this stage, there is no confirmation
with less than 30% recycled content which is
                                                           that the scheme will combine with the proposed
manufactured in the UK and any such unfilled plastic
                                                           Scottish DRS. Therefore, the impact of either a single
packaging imported into the UK. It is proposed that the
                                                           DRS or multiple DRS on business is uncertain and should
tax will take effect from 1 April 2022.
                                                           be fully considered.

The consultation explores possible ways in which
                                                           It is proposed that a deposit is added to the price of
‘plastic packaging’ and ‘recycled content’ can be
                                                           beverages in certain in scope drinks containers at the
defined to finalise the scope of materials subject to
                                                           point of purchase. This deposit would then be redeemed
the tax. The Treasury’s proposed definition would cover
                                                           by the consumer when the empty drinks container is
all plastic products used for the containment, handling
                                                           returned to designated return points. Similar schemes
and delivery of goods from producer to the consumer.
                                                           exist globally and have achieved positive collection and
Significantly for the food and beverages industry, this
                                                           recycling rates.
definition is likely to include food containers, plastic
cups and bottles, as well as any component parts such
                                                           Two different models are proposed for the design of the
as lids and bottle tops.
                                                           containers to which the scheme will apply. The ‘on the
                                                           go’ model would restrict the drinks containers in scope
The Treasury proposes that the tax would be UK-wide
                                                           to those less than 750ml in size and would exclude
and charged on the full weight of the packaging
                                                           multipack containers. The ‘all in’ model would include all
product, at a flat rate set per tonne of packaging
                                                           beverage containers.
material. The rate of the tax will be announced by the

                                                                                                                         13
It is proposed that the amount of the deposit is             The Scottish government has also recently announced a
           set by Government in consultation with the Deposit           commitment, in principle, to introducing a charge on
           Management Organisation, a newly established body            disposable drinks cups – the so-called ‘latte levy’.
           funded by producers, which would administer and              The exact details of the scheme are reportedly still
           operate the scheme. Questions are posed as to                being considered by an expert panel, which is due to
           whether the deposit should be a flat rate or should          report back in the coming months, with proposed
           vary according to material and how unredeemed                legislation set to follow in the 2019-20 parliamentary
           deposits should be used. Under Scottish DRS proposals        year (although it will take some time for this to pass
           unredeemed deposits would be proposed to be                  through the legislative process).
           returned to the scheme administrator to fund the
           operation of the scheme and infrastructure.
                                                                        Comment
           Reform of the UK producer                                    The consultations will close in mid-May 2019. Many
                                                                        FBOs are, of course, already taking action to identify
           responsibility packaging waste system                        innovative solutions for the packaging and supply of
                                                                        their food and beverage products. However, the
           The consultation contains a raft of proposals to
                                                                        proposed pace of these legislative changes is relatively
           transform the UK-wide plastic packaging waste system.
                                                                        fast with the roll out of potentially 2 DRSs by 2023 and
           The headline proposal is that producers will be required
                                                                        the revised packaging regime planned for 2023 with
           to cover the full net cost of managing their packaging
                                                                        the plastics tax in 2022. A ‘joined up’ approach will be
           waste. This is a major reform as, under the existing
                                                                        crucial to ensure the initiatives work effectively, are
           regime, producers only cover around 10% of the cost of
                                                                        compatible and do not create unforeseen issues.
           managing packaging waste. By making producers cover
                                                                        Retailers, FBOs and others likely to be affected by these
           the full net cost, the Government aims to incentivize
                                                                        measures should therefore review the proposals and,
           producers to use less packaging and switch to
                                                                        where necessary, make their voices heard.
           packaging that is easier to recycle. Under the proposals,
           the ‘full net cost’ would cover the cost of all stages in
                                                                        CMS is running a seminar in Edinburgh on 27 March
           the recycling process; the treatment/disposal of
                                                                        looking at the key practical issues and opportunities
           products that cannot be recycled; as well as the cost of
                                                                        facing businesses arising from the rapidly progressed
           communicating with consumers about recycling
                                                                        proposed EU Directive on single use plastics and other
           packaging waste and anti-littering; and compliance
                                                                        initiatives at international and UK level.
           monitoring by the regulator.
                                                                        Find out more.

           It is proposed that the full net cost recovery will only
           apply to ‘consumer facing’ packaging. Packaging waste
           for commercial or industrial applications commonly used                    Alex Ibrahim
           in ‘business to business’ transactions, is out of scope of                 Of Counsel
           the ‘full net cost’ proposals.                                             TT +44 20 7524 6569
                                                                                      EE alex.ibrahim@cms-cmno.com
           Other initiatives
           In addition to the aforementioned consultations, the
           Government is continuing to progress its proposal to
           ban the sale and distribution of certain single-use                        Olivia Jamison
           plastics products such as plastic drinks stirrers, plastic                 Partner
           stemmed cotton buds and plastic straws (for non-                           TT +44 20 7367 2055
           medicinal use) in England following a consultation which                   EE olivia.jamison@cms-cmno.com
           closed in December 2018. Whilst at European level, a
           proposal for a Directive on the reduction of the impact
           of certain plastic products on the environment (which
           includes prohibitions on certain single-use plastic
           products and consumption reduction targets for others),                    Paul Sheridan
           is anticipated to enter into force in mid-2019. Member                     Partner
           States will then have two years to transpose it into                       TT +44 20 7367 2186
           national law. This proposal forms part of the European                     EE paul.sheridan@cms-cmno.com
           Union’s plastics strategy, which aims to make all plastic
           packaging placed on the EU market, recyclable or
           reusable by 2030.

14 | Kernel – The Scotland Food and Drink Bulletin – Spring 2019
Seminar – It’s a wrap:
the end of plastic packaging
as we know it
CMS Scotland are running a seminar in Edinburgh on 27 March looking at the key
practical issues and opportunities facing businesses arising from the rapidly progressed
proposed EU Directive on single use plastics which has achieved provisional political
agreement) and other initiatives at international and UK level. During the session we will
cover the proposed Directive, UN and UK measures, the potential opportunities and what
it means for businesses in Scotland, with a particular focus on the food & drink sector.

You will hear from the CMS Environment team, Changeworks and eteaket.

Please register your interest here

                                                                                             15
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