Joint Committee on Agriculture, Food and the Marine publishes report on Pre-Legislative Scrutiny of Agricultural and Food Supply Chain Bill 2022

The Committee recommends that the Office proposed under the Bill should be called the National Food Regulator and that the maximum fine for offences committed under the terms of the Bill be increased to €10 million or 10 per cent of global turnover, whichever is greater, to act as a deterrent.

Launching the report, Deputy Jackie Cahill, Cathaoirleach of the Committee, said: “For years stakeholders in the agri-food sector have advocated for a regulator in the food supply chain to ensure fairness, equity and transparency from the primary producer to the consumer. This sector plays a vital role in rural employment and contributes significantly to both the national and rural economy. The Committee welcomes the Agricultural and Food Supply Chain Bill 2022 and the proposed establishment of the Office for Fairness and Transparency in the Agri-Food Supply Chain.

“The Bill reflects the European Union’s Unfair Trading Practices policy and the commitment made in the Programme for Government. The aim of the Bill is to seek to improve market transparency in the agricultural and food supply chain. The Committee hopes that with the establishment of this proposed Office the sector will see an improvement in the position of primary producers in the food supply chain and that with improved transparency greater relations between each part of the supply chain can be built upon.”

In April 2019 the European Union Directive 2019/6331 on unfair trading practices in the agricultural and food supply chain was adopted by the European Parliament and Council. EU Member States were required to transpose the Directive into national law by 1 May 2021 and apply it six months later. In the ‘Programme for Government – Our Shared Future’ the Irish Government committed to: Ensure fairness, equity, and transparency in the food chain by establishing a new authority called the National Food Ombudsman (NFO) to enforce the Unfair Trading Practices (UTP) Directive.

In April 2021, the Minister for Agriculture, Food and the Marine signed a Statutory Instrument transposing the UTP Directive directly into Irish law. The Minister created an interim UTP Enforcement Authority within the Department of Agriculture, Food and the Marine, pending the adoption of primary legislation to create a ‘National Food Ombudsman (NFO)’ as described in the Programme for Government.

The Committee received the General Scheme of the Agricultural and Food Chain Supply Bill 2022 for Pre-Legislative Scrutiny in May 2022. Three days of hearings were held in June and July 2022 and the Committee engaged with relevant stakeholders to discuss the general scheme of the Bill. Based on these engagements, the Committee has made 20 recommendations which it believes will enhance and strengthen the proposed legislation.

The key recommendations made by the Committee are that:

• The title of the office as constituted should be the National Food Regulator instead of ‘the Office for Fairness and Transparency in Agri-Food Supply Chain’ outlined in the General Scheme of the Bill;
• The proposed Office should also have the power to require market sensitive data that isn’t publicly published must be available to the proposed Office if requested to ensure fairness in the food supply chain;
• The authority to ‘conduct random inspections on suppliers and buyers to ensure continued compliance with the rules on unfair trading practices’ is included under ‘General functions and role of the Office’ (Head 8) and ‘Particular functions of Office’ (Head 9) of the Bill;
• The Office be obliged to conduct and publish regular analysis and reports on comparable price and market information elsewhere in the EU, UK and among international trading partners, which could assist in comparing trends and determining whether domestic cartel-like behaviour could be taking place;
• The suggested composition of the board of 6 members listed under Head 10 of the General Scheme is too small to adequately represent different parts of the agri-food sector and supply chain. The Committee believes that that the number of the proposed Office’s board is expanded in line with the other state bodies and is made up of experienced representatives of participants involved throughout the agri-food food supply chain. For example, Teagasc and Bord Bia have 11 members on their boards which includes representation from farming representative organisations;
• The time limit for prosecution for an offence under this Bill may be brought at any time be changed to at least 3 years after the date of the alleged offence, replacing the deadline of 2 years included under Head 50 in the Bill. The Committee believes that this is a tight deadline as due to the nature of the business of the sector it may take some time before a complainant may be aware that they have experienced an unfair trading practice;
• The fine listed in Head 52(2)(b) of the General Scheme which is limited to €500,000 when a person commits an offence under sections 48(11) or 49(1) of the Bill is increased to €10 million or 10 per cent of an operator’s global turnover, whichever is greater, in order to act as a deterrent to larger operators in committing an offence under this Bill.

Deputy Cahill said: “The agri-food sector is a significant part of Ireland’s economy through its exports and employment. In 2021 there were 15.2 billion total agri-food sector exports, and it is estimated that the sector accounted for more than 6 per cent of Ireland’s Modified Gross National Income in 2020. This sector plays a crucial role to rural economies as well as the national economy as it accounts for approximately 163,600 jobs or 7.1 per cent of employment in Ireland.

“The importance of food security has been especially highlighted in recent years with climate change, Brexit and the ongoing war in Ukraine. These turbulences and challenges have impacted the agri-food sector in Ireland. It is now more important than ever that there is more transparency throughout the food supply chain in order to bring fairness to all of those working throughout the agri-food sector.”

Deputy Cahill thanked Members for their input and their commitment in bringing forward this report and expressed sincere gratitude to every stakeholder that forwarded a submission or came before the Committee to give evidence. He said these discussions were critical to the development of the report and he acknowledged the shared commitment of all stakeholders to fairness, equity and transparency in the agri-food supply chain.

The report Pre-Legislative Scrutiny of the Agricultural and Food Supply Chain Bill 2022 is available on the Oireachtas website.

The Joint Committee on Agriculture, Food and the Marine has 14 Members, nine from the Dáil and five from the Seanad.