Food Update - February 2010
The Price of Compliance - The New Data Protection Fee RegimeProducer Responsibility (Packaging Waste) Regulations 2007 Ignore them at your peril (and possibly substantial cost)
Better known as the ‘Waste Packaging Regulations’, these are a reincarnation of those first introduced in 1997. It is therefore a matter of some considerable concern that there are apparently still a significant number of businesses (including food businesses) who are either ignorant of their existence, or who are failing to comply.
Follow the leader?
Against the odds - bucking the trend in bee keeping
The Price of Compliance - The New Data Protection Fee Regime
Approximately 70% of the circa 10 million tonnes of packaging waste produced annually in the UK is generated by the food and drink sectors.
The 2007 Regulations are the UK’s attempt to impose obligations to meet the targets set in the EU Directive on Packaging and Packaging Waste and to reduce packaging being sent to landfills. Like many other environmental offences, the consequences of non-compliance are criminal sanctions - fines, and if the circumstances merit, imprisonment.
In July 2009, Red Bull, the drinks importer, incurred fines and costs totalling in excess of £270,000 for failing to comply since 1997. Red Bull approached the Environment Agency when they realised they had failed to comply - it must be assumed that organisations who are found out by the EA face penalties of at least the same size, pro rata to their circumstances.
The Regulations apply to any organisation whose turnover in its last financial year before 31st December in the current year exceeded £2 million and which “handled” in excess of 50 tonnes of packaging materials or packaging in the previous calendar year. Charities are exempt from the Regulations.
The Regulations apply to raw material manufacturers, packaging converters (i.e. those who form raw materials into packaging), packer/fillers (i.e. those who send out their products in packaging, including service providers who carry out e.g. hiring/lending of packaging) and sellers (i.e. those who sell packaged goods to the end user).
The obligations imposed by the Regulations are to:-
1. Register with the Environment Agency or join an approved compliance scheme;
2. Recover the specified amount of packaging waste;
3. Provide evidence of recovery by producing Packaging Recovery Notes (”PRN’s”) or
Packaging Export Recovery Notes (”PERN’s”)
Sellers have to fulfil additional consumer information obligations to give information about return/recovery systems, their own role in recovery and the meaning of symbols. If a producer handles over 500 tonnes per annum, they have to provide an operational plan.
For most organisations, the easiest way to comply is to join a compliance scheme, which takes over responsibility for the member’s compliance. However, the producer must join by 7 April in the relevant compliance year, and is responsible for providing the scheme with accurate data.
The obligations apply to packaging which is owned, or passed on to the next entity in the packaging chain or the end user, or directly imported from outside the UK. There are exceptions for long term packaging, packaging which is part of the product, and freight
containers.
It is inevitable that there is a wide range of “packaging” which does not fall squarely within the definition of “packaging” in the Regulations, and it will be a matter of fact in each case whether or not the particular packaging is part of the producer’s obligation.
It cannot be emphasised enough that non-compliance is a criminal offence, carrying potentially large fines and costs.
For more information contact:
Brian Wake: 0845 634 2604
brian.wake@freethcartwright.co.uk
Despite the economic downturn, sales of certain food products have shown a dramatic increase, particularly budget products. For example, the Co-op’s Simply Value range increased sales by 80% from last year’s figures.
The opportunity to make more from own-brands makes it tempting for retailers to adopt packaging that ‘hints’ at market leading products. There have been few challenges in the past, which is perhaps not surprising given that supermarkets will be the biggest customers of many leading brands. Where there have been cases they have proceeded on the basis that the consumer is misled as to the origin of the goods. For example, in 1997 United Biscuits successfully sued Asda stores over a chocolate biscuit called “Puffin”, which had similar packaging to the well-known Penguin bar.
However, the recent decision of the European Court of Justice in L’Oreal SA v Bellure NV has caused speculation that it may be easier for leading brands to enforce trade mark rights against copy-cats who fall short of misleading or confusing consumers, but who simply use packaging and marks that ‘hint’ at the leading brand.
The case concerned look-a-like and smell-a-like perfumes that brought to mind two of L’Oreal’s famous perfumes, Trésor and Miracle. Despite the fact that no consumer would be confused by the look-a-likes, the court found that infringement of L’Oreal’s marks occurred where the look-a-like took unfair advantage of the well-known marks by seeking to ride on their coat-tails in order to benefit from the power of attraction, the reputation and prestige of the marks and to exploit, without paying compensation, the marketing effort expended by the trade mark owner. The court had specific regard to the fact that there was a clear intention to create an association with the famous marks and a commercial benefit in doing so.
The court also considered that comparison to famous brands for the purpose of advertising was not permitted where the product was presented as an imitation or replica as in the L’Oreal case, which meant that it took unfair advantage.
In order to succeed, brand owners will want to ensure trade mark registration of their packaging as well as the main brand because an association is more readily created by reproducing the look and the feel of the packaging, as well as choosing a similar name.
Indeed, some brand owners may want to go further and look to register the shape of products as trade marks. However, this is not always easy as Mars recently found out when it sought to protect the shape of its Bounty bar. In the Mars case, the court found that the shape of the Bounty bar and the three chevrons on top did not depart significantly from the norm in the chocolate industry and could not be registered.
Since the decision in the L’Oreal case, JS Sainsbury has been sued by Diageo over a look- a-like bottle of Pimms. The case has since been the subject of a confidential settlement and perhaps serves to illustrate a natural reluctance to litigate between leading brand owners and some of their biggest customers.
Also, in difficult times consumers are more likely to perceive look-a-likes that do not cause confusion as fair competition. Nevertheless, it remains to be seen how brand owners will respond to competition of this sort, and consumer perceptions may yet change if brand owners step-up and invest more in protecting their brands.
Retailers, on the other hand, may wish to conduct some due diligence before launching look-a-like products and/or presenting them as imitations or replicas. For example, they will want to consider what aspects of the product (shape, design, marks used etc.) are registered as trade marks or designs or may give rise to infringement of copyright.
For more information contact:
Simon Barker: 0845 634 2583
simon.barker@freethcartwright.co.uk
Against the odds - bucking the trend in bee keeping
It has been well reported over the last few years that the honey bee population is in decline. The consequences of this could be devastating forthe population as a whole and food producers in particular.
One source says that if the bee population becomes extinct, which is feared could happen within the next 10 years, it could cost the economy up to £165 million as a result of the lack of pollination of fruit trees and other flowering field crops.
The most recent explanation for the bee’s decline is a reduction in plant diversity. cientists have found that bees eating pollen from a range of plants have a healthier immune system than those that obtain pollen from just one source. Other reasons include:
• Milder winters killing off fewer bugs
• Wet summers causing illness within a hive
• Crop sprays
• Increase of the varroa mite
• Poor bee keeping husbandry, and even
• Radiation from mobile phones which interfere with the bee’s navigation system.
But one of our food sector clients, Tony Spacey, who owns Littleover Apiaries in Derbyshire, the largest commercial honey producer in the UK, is bucking this trend.
Mr Spacey has not lost a bee colony in 4 years and believes this is because he does not use chemical treatments and antibiotics in his hives.
Mr Spacey also expresses concern that the use of chemicals in bee keeping husbandry can result in traces of the chemicals remaining in the honey and thus finding their way into the food chain.
If you have any comments on this article or would like to raise any issues of concern to the food industry, we would be delighted to hear from you.
For more information contact:
Philippa Dempster: 0115 936 9334
philippa.dempster@freethcartwright.co.uk
Karl Jansen: 0845 634 9780
karl.jansen@freethcartwright.co.uk
The Price of Compliance - The New Data Protection Fee Regime
Most businesses process personal data and so are well aware of their obligation under the Data Protection Act 1998 to “notify” (register with) the Information Commissioner’s Office with details of what they do with that data. The ICO uses those details to create an entry on its register of “data controllers” which is open to public inspection at www.ico.gov.uk - failure to notify is a criminal offence.
The yearly renewal fee has been £35 for many years, but as from 01 October 2009 new regulations brought into force a “two tier” fee structure. For “Tier 1″, the notification fee is unchanged at £35, but for businesses in “Tier 2″ the fee is now £500 a year. The new fees apply to renewals of notifications due on or after 01 October 2009.
Whether your business is Tier 1 or 2 will depend on its size and turnover:
Q: Does your business have fewer than 250 members of staff?
If your answer is YES - The business is ‘TIER 1′- the annual fee is £35
If your answer is NO - Go to the next question below
Q: Did your business turn over £25.9 million or more in its last financial year?
If your answer is YES - The business is ‘TIER 2′- the annual fee is £500
If your answer is NO - The business is ‘TIER 1′- the annual fee is £35
In calculating how many “members of staff” there are in your business, you will have to total up the number of staff for each month of your (most recent) financial year and then calculate the monthly average over that year. You need to count not only employees, but also others such as partners and “office holders”.
To calculate “turnover”, companies and limited liability partnerships need to apply the relevant definition in the Companies Act 2006 and related regulations.
For other businesses, turnover will be the amount derived from the provision of goods and services falling within the data controller’s ordinary activities, after deducting:
• Trade discounts
• VAT
• Any other taxes based on the amount so derived All these calculations will have to be done for each company in a group.
For more information, see the document “Notification fee changes - what you need to know” available from the ICO website, or speak to:
Deryck Houghton: 0845 070 3810
deryck.houghton@freethcartwright.co.uk
Whilst every effort has been made to ensure the accuracy of this bulletin, it does not provide complete coverage of the subjects referred to, and it is not a substitute for professional legal advice and should not be relied upon as such.
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