Working at self-regulation

The biggest growth area in the food industry is regulation, which is multiplying at the national level -- and globally.

Many of the laws are driven by consumers' concerns over food safety and health. Some are attempts to harmonise law across the EU or the US, and even through international agreements such as the UN's Codex Alimentarius.

Other current or proposed regulations deal with subjects common to all industry, the environment, waste, export and import conditions and the like.

The food business, which is facing low margins at home and tougher competition overseas, is justifiably concerned that the legal fences being constructed around them will stifle their business.

The "stifle" scenario is especially true in the case of many of the smaller businesses, which do not have a phalanx of personnel to keep companies in line with the changing regulatory environment.

Self-regulation is increasingly being seen as the answer.

But why trust industry when its bottom line is the buck rather than consumer welfare?

Witness the current furor over benzene in soft drinks. The gamble by US authorities to let the industry deal with benzene residues in soft drinks on the quiet turned out to be a failure.

Fifteen years later benzene is still appearing in soft drinks and now the industry is in the doghouse with consumers and regulators. Restrictions and limits are bound to follow.

However, there are signs that limited self-regulation over specific issues, properly audited, could work, especially if an overall body can keep individual businesses in line with the agreed upon rules.

Health claims, nutritional issues, concerns about obesity and even consumer privacy concerns over the use of radio frequency identification are some of the areas primed for industry consensus.

The Confederation of the food and drink industries of the European Union (CIAA) is one organisation trying to bring the big and the small, the national and the multinational into just such a consensus.

One such move is in the area of political and public pressure on obesity. In October 2005 the CIAA adopted the new CIAA Food and Beverage Product Marketing Communications Principles, complementing the ones adopted in February 2004 relating to advertising.

The new advertising and marketing practices follow clearly defined principles, along with campaigns promoting healthier lifestyles.

The industry is quite right that tackling the issue will require multiple strategies and the sustained efforts of many sectors, not just the one that feeds the public's growing appetite.

More self regulatory proposals are due to come out of the association in relation to the EU's decision to take action on a common programme promoting diet, physical activity and health throughout the bloc.

The industry promises that it will do its part to "make products and choices available to consumers corresponding to demands for taste, nutrition and convenience while encouraging a healthy lifestyle."​

It's a question of public and regulatory trust. When the CIAA goes to the European Commission with its progress report on the new advertising and marketing commitments, it will have to prove, through an independent audit, that this initial trial at self-regulation is working.

Such voluntary behaviour, part of a grander concept known as corporate social responsibility, is a task industry will have to bear collectively and individually or face the heavy hand of the law once again.

Only then can it expect more leeway on other issues.

Ahmed ElAmin is a business writer of 20 years' standing, having specialised in development issues, technology, international business and offshore finance, before joining Decision News Media as the Editor of FoodProductionDaily.com. If you would like to comment on this article please e-mail nuzrq.rynzva@qrpvfvbaarjf.pbz​.​