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Report Sustainable Food Supply Chains Report Sustainable Food Supply Chains Industry and Parliament Trust THE LONG AND THE SHORT OF IT SUSTAINABLE FOOD SUPPLY CHAINS INTRODUCTION 3. Introduction 4. Key Issues The Issues and Challenges of Sustainable Food Supply Chains Introduction “Sustainable food 5. Key Issue One How the Market Operates supply chains would In January 2013, the Food Safety Authority reported that horse 6. Key Issue Two DNA had been found in beef burgers being sold by five major be those which Volunteerism or Regulation? retailers in Britain and Ireland. The public outcry and subsequent help MEET THE 8. Site Visit One debate prompted by the “horsemeat scandal” raised issues about NEEDS OF THE Visit to Sodexo UK and Ireland - By Huw Irranca-Davies MP the supply chains of the food being sold to UK consumers and about levels of trust between food businesses and their customers. PRESENT without 9 Site Visit Two compromising the Visit to McCain Foods by Andrew Kuyk CBE It was this far-reaching public debate – together with the ability of 10. Key Issue Three recognition that food supply chain issues extend beyond issues Engaging with People as Citizens and Consumers of integrity alone – that prompted the Industry and Parliament FUTURE Trust, the University of Warwick and the Food Ethics Council to 12. Case Study One GENERATIONS establish the Sustainable Food Supply Chains Commission. The McDonald’s, Great Britain and Northern Ireland aim of the Commission was to explore the challenges facing food to meet their own 13. Case Study Two companies in ensuring the sustainability of their supply chains, and needs” Divine Chocolate to investigate the most significant upcoming policy developments – 14. Key Issue Four actual and potential – that relate to those challenges. This included Certification and other Assurance Schemes a number of industry case studies cited by one or more Commissioners as examples of good practice. 15. Case Study Three The remit of the Commission was very broad: Commissioners were asked to consider three ‘pillars’ of Coca-Cola Enterprises Ltd sustainability – social, environmental and economic – and to look at both domestic and global supply 16. Key Issue Five: chains. Under the widely-cited Brundtland definition, Investing in Supply Chains sustainable food supply chains would be those which help to “meet the needs of the present without 17. Concluding Thoughts compromising the ability of future generations to meet their own needs.” 18. Commissioner Biographies To undertake this exploration a Commission was assembled involving respected and authoritative figures from UK Parliament, the food industry and academia. 2 3 HOW THE MARKET OPERATES SUSTAINABLE FOOD SUPPLY CHAINS: KEY ISSUES KEY ISSUE ONE 1 Sustainable FOOD supply CHAINS HOW THE MARKET KEY issues Operates market share that can be commanded market concentration. Commissioners heard evidence from the KEY issue ONE by a values-based proposition. Many Fairtrade Foundation regarding bananas, which is an example food businesses have been able to gain of an increasingly concentrated market. While UK consumers The challenges covered in the evidence sessions were wide- There are many ‘win-wins’ a competitive advantage by showing are now paying approximately half of what they were paying ranging. They included the physical impacts of climate change, loss whereby the promotion of leadership on sustainability issues by for bananas ten years ago, costs at the producer end have of biodiversity, water scarcity, health and obesity, food waste, food sustainable food supply demonstrating their commitment to doubled over the same period. It was claimed that this trend affordability, unfair treatment of workers along the supply chain and chain practices can provide sustainability in their supply chains. has thus had negative impacts across all three pillars of farm animal welfare concerns. commercial benefits. The sustainability. Some producers are simply quitting, because it is reduction of avoidable waste The Fair Trade Foundation stated no longer economically sustainable to stay in business. Others “Businesses have been able to gain a and the value of investing in that there appeared to be a shift in the are making savings on labour costs, by making more use of long-term relationships were balance of power between producers, casual labour for example, undermining social sustainability. competitive adVantage by showing two such themes raised in the manufacturers and retailers. The UK is a And some are trying to make ends meet by using potentially leadership on sustainable issues by evidence sessions. There are relatively small player in the global market harmful pesticides and fertilizers, with possibly damaging a number of features of how for food commodities and products, and environmental consequences. Hence it was suggested that, for demonstrating their coMMitMent markets operate, and how is facing increasing competition from this example at least, the market as a tool does not necessarily TO sustainability in their supply businesses operate within emerging economies in terms of sourcing deliver sustainability. chains” markets, that may be slowing from traditional suppliers. This is having a down, or even preventing, significant impact on the extent to which The question was raised as to whether relying on the market the implementation of more UK companies can influence suppliers to can address deeper challenges, for example around fairness, The intention was not, however, to attempt to cover all aspects of sustainable practices. raise their performance across a range global economic justice and environmental stewardship. the sustainability of supply chains, but rather to draw out a few key of social and environmental standards. underlying challenges that confront food businesses in relation to Companies that aspire their supply chains and to examine some promising approaches that to promoting social and One example The Fair Trade Foundation have been implemented, or proposed, as ways of addressing those environmental sustainability cited during the Commission was challenges. Key themes explored in the report were: in their supply chains in relation to the sourcing of fish. are competing with other EU companies follow the UN FAO’s 1 HOW THE MARKET OPERATES companies that may not share voluntary code on Illegal, Unreported those aspirations. While there and Unsustainable Fishing. However, it 2 VOLUNTARISM OR REGULATION? is evidently considerable scope was reported that some suppliers in the for the market to reward these Far East did not wish to comply with the 3 ENGAGING WITH PEOPLE AS CITIZENS aspirations, there is also a provisions of the code, asserting that AND CONSUMERS limit to how much companies the EU is a small market, and that they can expect consumers to pay do not want to change their practices to 4 CERTIFICATION AND OTHER for higher standards – a limit satisfy the requirements of that market. ASSURANCE SCHEMES in terms of the premium that consumers will be willing to Another significant, longer-established, 5 INVESTMENT IN SUPPLY CHAINS pay and also in terms of the feature of food markets are the levels of 4 5 VOLUNTARISM OR REGULATION? VOLUNTARISM OR REGULATION? KEY ISSUE TWO KEY ISSUE TWO 2 VoluntarisM OR regulation? KEY issue TWO “In essence, is there the scope within voluntary approaches to sufficiently incentiVise businesses There are many kinds of voluntary approaches The progress that has been made by voluntary developed in order to enhance the sustainability approaches across the broad range of sustainability that are not currently showing coMMitMent to of food supply chains. Certification and assurance criteria has been significant. However, the sustainability, or is further regulation needed? ” schemes represent one category (explored further question that was asked repeatedly throughout the on in this report). Another is the large number and Commissioners’ deliberations was: ‘can voluntary wide range of voluntary initiatives implemented by approaches deliver the further progress that we doing business as disadvantages of ‘too much’ or individual food companies with the goal of improving need, at a quick enough pace, in order to address ‘unnecessary’ regulation. the sustainability of their operations and (in some the enormous challenges confronting food supply cases) supply chains. Some of the best known of chains; or do they need to be supplemented by Given that there is always likely to be some level these are Marks & Spencer’s ‘Plan A’, Unilever’s additional regulation?’ of regulation in place in relation to sustainability ‘Sustainable Living Plan’ and Sainsbury’s ‘20x20 issues, the Commission discussed the importance Sustainability Plan’. Often the progress made by leaders on sustainability of long-term policy making. Competition policy is undermined, or threatened, by those organisations was cited as one example. There is a similarly wide range of collaborative or less focused on sustainability. In essence, is there multi-stakeholder initiatives including commodity- the scope within voluntary approaches to sufficiently The role of Government leadership in promoting, or specific groups (such as the Roundtable on incentivise businesses that are not currently fostering, sustainable food systems was identified Sustainable Palm Oil) as well as initiatives or good showing commitment to sustainability, or is further as being important. This relates not just to the UK, practice guidelines designed to address particular regulation required? but also to the UK’s role
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