Food & Drink update – September 2020


Post-furlough planning and workforce measures for food and[...]
Many food and drink manufacturers have made use of the lifeline provided by the Coronavirus […]
Many food and drink manufacturers have made use of the lifeline provided by the Coronavirus Job Retention Scheme – particularly those with production lines which are purposed for the foodservice and ‘food to go’ channels, where demand has significantly reduced.
Grant funding for furloughed staff has been gradually decreasing since 1 August, before the scheme fully closes on 31 October 2020. Now is the time for employers to turn their attention to the longer-term impact of the pandemic on their businesses and what this means for the workforce.
In the Chancellor’s 8 July announcement, in which he outlined a ‘plan for jobs’, employers were promised a bonus of £1,000 for every furloughed employee retained in employment until at least 31 January 2021. However, with the requirement of three months’ continued employment, this seems unlikely to be a guaranteed way of avoiding cost-cutting measures altogether.
Government’s support packages may therefore only be serving to delay other cost-cutting strategies. Given the context, staff and trade unions might be open to creative proposals which present an alternative solution to job losses. Such measures might include re-training and re-deployment into alternative roles and changes to terms of employment, such as modified shift patterns and/or reducing shift premiums. Such proposals present a significant legal risk, which means it is important to navigate processes in line with company procedures, engage in collective consultation where necessary, and communicate with staff representatives and unions.
Future planning
Ultimately, after consideration of all feasible alternatives, it may simply not be possible to avoid redundancies – particularly as the foodservice and ‘food to go’ channels continues to suffer, with local lockdowns, the slow pace at which workers are returning to offices and the resultant restrictions on restaurants and the hospitality sector becoming the new normal.
When making redundancies, care should be taken over selection – selecting those on furlough leave as ‘at risk’ is likely to create employee relations issues and could potentially result in claims for unfair dismissal and discrimination.
Conversely, some ‘winners’ will have emerged from the crisis and many in the industry may have at least some areas of their businesses which are doing well. For them, now is the time to embrace further change. This could entail increased investment in technology and automation, which, in turn, should assist with social distancing and disaster recovery planning – Walker Morris is hosting a webinar on this topic on 12 November 2020, which you can register for here.
Other initiatives could include offering apprenticeships (Government will increase funding for apprentices hired between 1 August 2020 and 31 January 2021) and, importantly, considering how to reward key workers for their efforts.
In all of the above, while change can be difficult to implement, meaningful engagement with stakeholders is key – involving employees in strategy planning at the outset increases buy-in to the eventual outcome.
WM comment
This is a time to think creatively about the options available to ease the impact of cost-cutting measures, while acknowledging that there may unfortunately be situations where redundancies cannot be avoided. Please speak to Charlotte Smith, a Senior Associate in the Employment Team and part of the specialist Food and Drink Group if you need help and advice.

Brexit and your workforce – How should food[...]
Register for our webinar on 12 November 2020 on Technology, automation and people here. As […]
Register for our webinar on 12 November 2020 on Technology, automation and people here.
As a major employer of EU nationals, the food and drink manufacturing industry will face significant challenges when free movement ends on 31 December 2020 and a new skills-based immigration comes into effect. Walker Morris’ Business Immigration team presented a talk on the topic, which can be viewed below:
The session covered:
- the impact of the end of free movement on the food and drink industry
- an overview of the current skills-based immigration system and an introduction to the proposed new system, which will take effect from 1 January 2021
- practical steps organisations can be taking now to ensure they are ready for the regime
- the impact of Covid-19 on migrant workers.
The key take-away point is that all employers who wish to employ individuals from overseas (whether EU nationals or nationals from the rest of the world) will need to engage with the new system. The government is now actively encouraging employers who do not currently have a sponsor licence, but who may need to recruit from outside of the UK in the future, to apply for one as soon as possible. For those who do have a sponsor licence, there will still be significant changes to the rules and those who manage your sponsor licence should therefore start preparing.
For further articles and videos on changes to the UK’s immigration system please visit our Business Immigration Hub here.

Protecting innovation in the food & drink industry:[...]
The food and drink industry is firmly undergoing a revolution. Consumer demand for ethically produced […]
The food and drink industry is firmly undergoing a revolution. Consumer demand for ethically produced products, particularly those which are vegetarian and vegan has skyrocketed, driven by flexitarian diets and the desire to lead a healthier, more environmentally conscious lifestyle. In 2019, one in four new food products brought to the market was labelled vegan. Sales of meat-free foods leaped from £582 million in 2014 to an estimated £816m in 2019. By 2024 sales are predicted to surpass £1.1 billion[1].
But with so many meat-free, vegan and ethical food and drink products now available in a dynamic and growing market, brands need to be certain their innovations and intellectual property is adequately protected from use by a competitor.
A global race
Innovative practice abounds as new brands emerge onto the market at lightning speed, each with their own recipes and processes, developed in hopes of beating the competition to become a frontrunner in the space and build customer loyalty. Creating a meatless mince, chicken or sausage that looks, feels and tastes like its meaty contemporary, whilst containing ethically sourced ingredients – or manmade ones that mimic those we’re unable to source ethically – requires incredible innovation and can take years to perfect.
As plant-based and flexitarian lifestyles gain ground across the world, and it is no longer enough to have your products protected across only one territory. The race is on to become a global market leader and brands need to consider copyright, trade mark and patent protection across their designs, packaging and processes to gain and maintain a commercial advantage in multiple countries.
Imitation and limitations
Those new to the vegan, meat-free and ethical produce arena are looking to mimic those that have already succeeded. The market is awash with copies, lookalikes and imitations, and not many brands have yet built a big enough brand presence or consistently loyal following that enables them to rest on their laurels without consumers diverting to trying something new.
The issue of imitation is often complicated by the fact that, when it comes to meat-free products, there is a need for the brand name to explain what the product is. People like to know they are consuming meat-free products from the name – and it has to portray that it is vegan, meat-free and ethical.
The brand name chosen can often already be taken by someone quicker to market and, as these names tend to be inherently descriptive, this poses a problem as oft-used phrases can be hard to trade mark. A trade mark – in this case the name – needs to be capable of distinctive character, going above and beyond mere description. Think of The Meatless Farm Co, Impossible Foods and Beyond Meat as vegan and meat-free brand names that go above description, while still conveying exactly what the product is.
The power of patent
Perhaps unsurprisingly, patents in meat-free products are on the rise to protect brand innovations. There is a large amount of scientific discovery and development that goes into getting meat-free, ethical products on your plate. Growing ‘meat’ in a lab requires highly sophisticated bioscientific processes and, as well as this, meatless brands are having to rethink which core ingredients they can use while keeping their products ethical in production and healthy. For example, palm oil, used in many foods as it is the least expensive vegetable oil in the world, has come under much scrutiny in recent years due to the level of deforestation taking place to harvest it, and the subsequent negative impact on the environment. Meat-free, vegan and ethical products must find and, in some instances, create a substitute for ingredients like this. Innovations such as these must be adequately protected with registered patents in every territory to prevent a competitor using them to their own commercial advantage.
Recipe for success
Recipes are notoriously difficult to protect, however, there are means under intellectual property law and practice to look after the innovative combinations meat-free food development teams have worked hard to perfect.
Where confidential information is included in recipe development, brands need to have adequate maintenance policies in place and ensure contractual frameworks they have with any third parties are suitable, so sensitive information is not leaked or shared.
In any collaboration or joint venture, each party should set out the background intellectual property of each partner and what will happen to any intellectual property created during the process, including who owns it, who will cover associated costs and how commercial benefits of the intellectual property will be agreed. Underpinning the arrangement with a robust contract is key.
Behind the inherent innovation driving the meat-free, vegan and ethical food revolution lies strong research and development teams who are working with their legal advisors to ensure that the valuable intellectual property being created is suitably protected. By obtaining strong intellectual property rights, meatless brands can secure a monopoly over their innovation. This monopoly plays a critical role in the process of taking innovative technology to the market, as the exclusivity granted by their intellectual property rights ensures that these companies can establish a solid market position and a competitive edge. Furthermore, as there are many players involved in developing plant-based technology for this sector, it is critical that businesses secure and protect their innovation before their competitors. The effective use of intellectual property can reduce the risk for the businesses and ensure that they enjoy the full benefit of their innovation.
[1] https://www.mintel.com/press-centre/food-and-drink/plant-based-push-uk-sales-of-meat-free-foods-shoot-up-40-between-2014-19

New guidance on allergen labelling – Natasha’s law
From 1 October 2021 there will be a change in the law relating to allergen […]
From 1 October 2021 there will be a change in the law relating to allergen labelling on food that is pre-packed for direct sale (PPDS) at outlets such as coffee shops.
Currently and until 1st October 2021, food businesses can provide mandatory allergen information for PPDS food by any means that they choose, including orally by a member of staff. Anecdotal evidence collected by Government indicated that it was often difficult for some consumers to distinguish between pre-packed and PPDS foods, and that some consumers assumed that the absence of allergen information on PPDS foods meant that food allergens were not contained in the product.
To address this issue, from 1 October 2021, a change in the law means that PPDS must have the name of the food and a list of ingredients directly on the packaging or label. If the food contains any of the 14 allergens, they must be emphasised in bold, upper case, contrasting colours or underlined. This change will bring the provision of allergen information on PPDS foods in line with labelling for pre-packed food, reducing consumer confusion.
The Food Standards Agency (FSA) has recently published guidance on the new labelling rules and although the guidance is not binding, it informs enforcement authorities as to how to apply the new law, and should therefore be given proper consideration by food business operators (FBOs).
Since PPDS is not defined in the legislation, the guidance sets out what the FSA considers to be PPDS. It states that foods considered to be PPDS will be those that meet the following criteria:
- The food is presented to the consumer in packaging which is completely or partially enclosed in a way that makes it impossible to alter the food without opening or changing the packaging.
- The food is packaged before the consumer orders it.
- The food is packaged in the same place it is sold. This includes food packaged by a food business on the same site where it is sold, or food sold from temporary or moveable premises (such as a food truck).
- Whether a food product is PPDS must be assessed on a case by case basis.
The guidance also offers the following as examples of PPDS food:
- A butcher who makes burgers or sausages which are pre-packed to be sold on the same premises.
- Sandwiches placed into packaging by the FBO and sold from the same premises.
- Boxed salads placed into packaging by the FBO and later sold from the same premises.
- Cafés giving away packaged samples of a new range of cakes made on the same premises.
- Foods packaged and taken by the same FBO to their market stall to sell.
- Foods that are pre-weighed and packed in a shop such as cheese or baked goods from an in-store bakery.
- Fresh pizzas from a delicatessen counter in a supermarket.
Failure to comply with the new allergen labelling rules is a criminal offence and may result in a criminal prosecution being brought against the FBO. A person convicted of an offence under the new legislation will be liable to an unlimited fine, the amount of which will be decided by magistrates on a case by case basis.
WM comment
It is important that FBOs study the guidance and understand the steps that they need to take to ensure that they are ready for when the new rules take effect. FBOs should establish which products qualify as PPDS and identify any allergens that the foods may contain, including any risks of cross contamination during production. Once this has been established, FBOs must consider how PPDS foods can be effectively labelled.

How can food factories avoid becoming coronavirus hotspots?
Hundreds of workers in food factories have tested positive for coronavirus. There have also been […]
Hundreds of workers in food factories have tested positive for coronavirus. There have also been major outbreaks in Germany, France, Spain and the US.
According to Lawrence Young, Professor of Molecular Oncology at the University of Warwick, “Factories and, in particular, indoor areas which are cold and damp, are perfect environments for coronavirus to linger and spread. Virus-containing droplets from infected individuals are more likely to spread, settle and stay viable.” Another possible factor in these refrigerated workplaces is noisy machinery, which requires people to talk more loudly or shout, which can increase the spread of infected droplets.
In addition, it isn’t just the conditions inside the plant that may be increasing the risk of coronavirus spreading. A lot of these factories have on-site or nearby accommodation where there are several people in each dormitory. The workers may be transported on a bus to the site of work, where they then spend all day together indoors and again in the evening.
So what can be done to protect workers? Government has issued guidelines (which can be accessed here) on working safely in food manufacturing – including keeping workers at least two metres apart when possible. The British Meat Processors Association has also issued guidance, including cleaning factories more often than usual, isolating staff who develop symptoms and staggering start times and break times. It also suggests providing additional personal protective equipment such as visors, if available.
It goes without saying that all workplaces will need to have completed robust risk assessments in the current pandemic but, additionally, food processing factories will need to take into account the particular context of their workplace and their workers. In particular, thought should be given to the following:
- The cold, damp environment of a food factory should be considered; is it possible to increase the ventilation?
- Production lines are often within enclosed areas where social distancing is difficult; can better PPE be issued or worker numbers reduced?
- Where are the areas which create ‘pinch points’ for contamination? How can sanitising facilities be most effective?
- Can shift patterns be organised so that teams are not constantly changing, making it is easier to isolate infected workers? Can teams be kept in the same groupings?
- Does travel between sites and between an individual site and worker accommodation need to be evaluated?
WM Comment
The safety of a business’ workforce will continue to be paramount making the guidance issued a ‘must read’.

New package of legislation to target obesity
In July 2020, Government announced a raft of measures to be enacted as part of Government’s […]
In July 2020, Government announced a raft of measures to be enacted as part of Government’s new obesity strategy.
The measures include:
- banning unhealthy food adverts – new legislation will ban the advertising of food high in fat, sugar or salt (HFSS) on television and online before 9pm. Ahead of this, Government will hold a consultation on whether the ban on online adverts for HFSS, should apply at all times of day
- banning ‘BOGOF’ offers – new legislation will ban volume promotions of HFSS foods. There will also be a ban on these items being placed in prominent locations in stores, such as at checkouts and entrances, and online. Shops will be encouraged to promote healthier choices and offer more discounts on food like fruit and vegetables
- calorie labelling – new legislation will require restaurants, cafes and takeaways with more than 250 employees to add calorie labels to the food they sell
- alcohol calorie labelling – a consultation will be launched on plans to provide calorie labelling on alcohol. It is hoped alcohol labelling could lead to a reduction in consumption
- front-of-pack nutritional labelling –a consultation will be launched to gather evidence on the current ‘traffic light’ labelling system. Government is considering adopting elements of a mandatory system pioneered in Chile, which uses stark black and white “STOP: high in” labels to indicate they are high in fat, sugar or salt.
Although, in theory, any plans to help combat obesity should be welcomed, the Food and Drink Federation (FDF) has warned of dire consequences for the industry warning that the measures could cost the sector £1.7 billion per year. Tim Rycroft from the FDF was quoted as saying “it is extraordinary that the Government is proposing a ban on promotions of food and drink in retail at such a precarious economic time“.
WM comment
At the moment Government hasn’t issued any timescale for bringing in the new legislation. We will monitor the situation and update you once it is known when these measures are to take effect.

Updated marking, labelling and marketing standards
On 10 September 2020, Government updated its guidance on the marking, labelling and marketing standards […]
On 10 September 2020, Government updated its guidance on the marking, labelling and marketing standards that food business operators (FBOs) must follow to import and export food, plant seeds and manufactured goods from 1 January 2021. You can read the full guidance here.
In relation to food labelling, the guidance is split into two parts. Food that is being exported to the EU and that which is sold in the UK.
Exporting to the EU
The EU has issued guidance on labelling changes required from 1 January 2021. FBOs should check with their EU importer to find out how the EU’s new labelling requirements affects their products. Food products placed on the EU market before 1 January 2021 can continue to be sold, distributed or transferred in the EU without labelling changes.
In brief, the EU emblem, EU health and identification marks and EU country of origin labels must all be removed from 1 January 2021. Use of the EU organic label is still up in the air until we know whether an equivalency deal is agreed with the EU.
Goods sold in the UK
From 1 January 2021, FBOs must use the new UK health and identification marks for products of animal origin to clearly show the UK product has been subjected to strict health and welfare checks. FBOs must include a UK address on pre-packaged food or caseins sold in the UK or, if the FBO is not in the UK, include the address of the importer.
As mentioned above, FBOs must not use the EU organic logo on any UK organic food or feed from 1 January 2021, unless either the control body is authorised by the EU to certify UK goods for export to the EU or the UK and the EU agree to recognise each other’s standards.
Foods currently protected with the geographical indication (GI) logo will need to switch to using the UK GI logo which we understand will be available from 1 January 2021.
There are detailed rules in the guidance for country of origin labelling for different food products which can be read here.
WM comment
FBOs should study the guidance and understand the steps that they need to take to ensure that they are ready for 1 January 2021.

Predictions of a post-lockdown upturn in food M&A activity
The food and drink manufacturing sector has shown itself to be one of the UK’s […]
The food and drink manufacturing sector has shown itself to be one of the UK’s most resilient sectors during the Covid-19 pandemic. Although early on in the pandemic we saw empty shelves in supermarkets due to stockpiling, the industry quickly adapted to the shift towards home cooking and product ranges were rationalised and supply chains reinforced. According to a recent report by BDO, businesses which are resilient have value and unlike other sectors that have reined in their ambitions, food and drink manufacturers are still focused on growth and the appetite for M&A remains high. The report suggests that many corporates within the sector remain keen to grow through a mixture of organic growth, product R&D and acquisition.
Not only will transactions that were put on hold in March get underway again but it is thought that some food manufacturing deals that were pencilled in for a 2021 launch will be brought forward to the last quarter of 2020 after businesses experienced better than expected sales during lockdown.
According to one leading corporate financier: “There are many food deals set to be launched in September and October. Trade buyers will be acquisitive. When private equity looks across sectors for where to invest, they are definitely not buying in leisure, travel, aero. They will be asking ‘what will perform well and be defendable if there is another coronavirus spike?’ and food manufacturing, with the big rise in in-home consumption, performed better than most. PE thinking is that in a pandemic environment, food manufacturers are not a bad business to have in the portfolio.”.
Food Manufacture magazine suggests that companies are gearing up their acquisition programmes to achieve better market positions, driven by a spike in demand for domestically produced food which is in turn compounded by a backlog of international freight. Just this week, Waitrose and Nestlé were reported to be amongst the interested parties vying to acquire farm-to-fork recipe box brand Mindful Chef valuing the business at around £50 million.
So, if these predictions bear fruit, we can expect to see an increase in deal activity within the sector over the next few months. Furthermore, the trends that were developing pre-pandemic towards food provenance, meat-less, free-from and health conscious consumers could accelerate in the post-Covid environment.
WM comment
At Walker Morris we have a team of corporate lawyers who are very experienced in leading M&A transactions within the food and drink sector. If you are a director or shareholder of one of those businesses thinking of buying or selling within the next few months please get in touch and we will be happy to share our experience with you.

Trademark infringement – the battle of the burgers
Fast food giant McDonald’s has issued proceedings in Australia against the Australian burger chain Hungry […]
Fast food giant McDonald’s has issued proceedings in Australia against the Australian burger chain Hungry Jack’s, for trademark infringement after Hungry Jack’s launched their new ‘Big Jack’ burger. The court documents claim Hungry Jack’s ‘Big Jack’ trademark is ‘substantially identical with or deceptively similar’ to McDonald’s Big Mac trademark. McDonald’s is seeking an injunction on Hungry Jack’s use of the burger name, which it claims is damaging the value of its intellectual property. McDonald’s also wants the court to cancel two trademarks granted to Hungry Jack’s and order the destruction of all promotional materials related to the burgers.
Hungry Jacks applied for their ‘Big Jack’ trademark in November 2019, which was accepted in February 2020. They then launched the ‘Big Jack’ in August before posting images to its website and social media pages. McDonald’s have held the ‘Big Mac’ trademark since 1973 and claim the Australian chain used ‘flagrant or wilful disregard’ in promoting their ‘Big Jack’ burger.
A spokesperson for Hungry Jack’s said “Hungry Jack’s is bemused by the trademark lawsuit filed against it in the Federal Court, this is without basis. Big Jack is a registered trademark of Hungry Jack’s and it is clearly evident that customers are not confused or misled that the Big Jack and Mega Jack burgers are only available at Hungry Jack’s.”
WM Comment
We will keep you updated as to the progress of the infringement proceedings and with any lessons to be learnt from the case.

CMA inquiry into joint venture between Carlsberg UK and Marston’s
On 18 August 2020, the Competition and Market’s Authority (CMA) launched its phase 1 investigation […]
On 18 August 2020, the Competition and Market’s Authority (CMA) launched its phase 1 investigation into the merger of Marston’s brewing business with Carlsberg UK. The joint venture, which was agreed in May but is now on hold, would see the merger of Marston’s brewing business with the UK division of Carlsberg, which is the world’s fourth-largest brewer. Under the terms of the joint venture, 60 per cent of the newly-created Carlsberg Marston’s Brewing Company would be controlled by Carlsberg UK, which will be entitled to have its drinks sold in Marston’s pubs and bars.
The CMA is assessing whether the joint venture would lead to a ‘substantial lessening of competition’ in the UK. Interested parties had until 2 September 2020 to submit comments to the CMA on the arrangement. The two companies had initially hoped to complete the transaction by the end of September but this is now unlikely as the deadline for the CMA to decide whether or not to launch a more in-depth phase 2 investigation is 19 October 2020.
WM Comment
We will keep you updated as to the progress of inquiry and if you have any questions relating to this investigation or to the role of the CMA in general, please contact us as we have competition law experts who can help.