This article is adapted from a presentation that Dominic Watkins, Head of Consumer at DWF, gave at the European Food Law Association Congress 2023 on whether the UK alternative protein sector can benefit from Brexit, as well as the panel discussion that followed.
Alternative Protein in the UK and EU
Throughout the Congress it was evident that food law experts from different fields (legal, political, and industry) felt that food was central to how the world should approach our ever-pressing climate and environmental issues. Speaking at the Congress, Bernardo Ivo Cruz, Secretary of State for Internationalisation in Portugal, said that there are five major drivers to sustainable development: science, law, access to finance, talent, and the market.
With the UK government advertising foreign direct investment opportunities in the sector (Department for Business and Trade), and the opening of an alternative protein research hub in the UK (UK Research and Innovation), it is clear that the government want the UK to stand out to the full range of alternative protein companies as being ahead of the research and encouraging investment.
However, the picture in the market is less clear. News headlines in the UK have proliferated in recent months about plant based product lines being dropped due to profitability. The Guardian reported earlier this year that "even Veganuary backfired" – asking if the vegan bubble had burst.
According to Frederic Fernandez & Associates, a strategy and M&A consulting firm specialising in FMCG, consumers have generally displayed a strong interest in plant based food and this is mostly for health, sustainability & ethical reasons (Source: Table 1 - FMCG CEOs: Is Plant-Based Dead? | LinkedIn). This market interest was matched by high venture capital interest, with investment exceeding USD13bn across 200+ plant based start-ups, and it is often presented as a more sustainable solution than meat, (Source: Key message 1(ii) - FMCG CEOs: Is Plant-Based Dead? | LinkedIn).
Despite this interest, the market projections fell short, and Frederic Fernandez & Associates said that the market reached USD26bn in 2022 when it had been forecasted at hundreds of billions.
One suggestion is that plant based customers are being disappointed by the taste and price of plant based foods on offer. If the market interest is still there, is taste something that can be delivered on by cell based/cultured meat companies? The taste test published by TIME magazine certainly suggests it could (Cultivated Meat Passes the Taste Test | TIME), but the price issue remains. And that's before you get to another major driver, currently a blocker: the law.
Can the UK alternative protein sector benefit from Brexit?
Many alternative proteins are novel foods and therefore must be approved before they can be placed on the UK market. When the UK left the EU, the concept of Retained EU Legislation was created which converted law "as it stands at the moment of exit into domestic law" (European Union (Withdrawal) Act 2018 (legislation.gov.uk)). This included the Novel Food Regulation (EU) 2015/2283. This means that the current novel foods authorisation process in the UK is substantively the same as in the EU.
The UK government have repeatedly suggested that they want to change this. In a January 2022 paper titled "The Benefits of Brexit" they said they would review the novel foods regulatory framework, and "specifically encourage safe innovation in the sustainable protein sector."
We saw the UK move ahead with precision breeding before the EU, passing the Precision Breeding Act which sets out a framework for both plant and animal based precision breeding in the future. This underlines how legislating on areas that are at the forefront of technology is something the UK is striving to do.
They have made good on this promise to review, with the Food Standards Agency (FSA) publishing a summary of a review they commissioned by Deloitte which outlines new models for consideration.
'No regrets' opportunities: retain key features of current model, but remove pain points to improve accessibility and get rid of statutory instruments that do not 'value add'.
- Triage-based: retain current approach but change how applications are processed (e.g. by risk). There could be specific criteria.
- Lifecycle based: Take a staged approach (conditional authorisation, ongoing monitoring).
- Collaborative regulation: authorise novel foods using insight and knowledge from other organisations e.g. recognising evidence/decisions of food regulators in other jurisdictions and/or putting more responsibility on the industry.
- Innovation-centric: introduce a 'front door' for all products deemed high risk enough to need authorisation, and focus on consumer awareness.
It is clear from the summary that the FSA wants to make the most of the "surge in investments in novel foods", saying that food is the new tech. They indirectly suggest that alternative proteins could benefit from application prioritisation, particularly when there is alignment with net zero national strategy.
While the potential exists, the reality is that there are currently few applications in the UK with reports of Israel's Aleph Farms having applied to sell cultivated meat in August, after making a similar application in Switzerland in July.
By anticipating an increase in novel food applications (such as cell based meat) and improving the process beforehand, the UK could get ahead of other markets by stripping away regulatory barriers. Unfortunately, while the intentions are positive the reality is more challenging. Not long after the summary was published, the FSA made it clear there were limitations on the UK's ability to get ahead due to:
- Resource limitations: There were 40 FSA posts not filled working on key areas including novel foods, and many of the teams had been diverted for several months working on the implications of the EU law revocation project.
- A slow down on regulated product reform needed: Other projects meant ambition may need to be slowed down.
- Longer term plan (3-5 years) not ASAP: It was suggested that progress with alternative proteins was slower than originally anticipated and might be 3-5 years away.
So while the UK alternative protein sector could benefit from Brexit, it does look likely that in reality, this will not be the case en-masse unless the FSA's priorities and resources change. At best, in the short term the benefit seems most likely to be a more flexible approach as was seen in the approach to CBD products, rather than anything more substantive.
What about the EU?
The Team Leader of Novel Foods at the European Commission (EC), Rafael Perez Berbejal, also spoke at the Congress and provided a summary of the current state of play in the EU. Mr Berbejal made clear that "as a regulator we're behind the innovation and we need to understand exactly what's going on". He confirmed that though no applications for cultured meat had been submitted, the EC are "really encouraging them to submit applications".
Mr Berbejal did not set out any concrete steps as to how the EC are encouraging these applications. However, the recent European protein strategy report by the Committee on Agriculture and Rural Development suggests that concrete steps to encourage alternative protein are in the works. The strategy, which the EC intend to adopt in early 2024, highlights how vital protein is, and notes that sustainable production of protein is crucial "for the transition towards more sustainable food systems with a reduced impact on the climate and biodiversity".
A possible sign of change to come, the strategy boldly states that when it comes to cell-based food "the Novel Food regulation is not fit for purpose" and calls on the EC to present a comprehensive impact assessment of novel food for human consumption.
Interestingly, Mr Berbejal did mention that a key issue with previous novel food applications for CBD was a lack of information. One of the concrete policy actions in the protein strategy addresses this exact point, suggesting that a scientific and technical guidance document is created that "complements the administrative guidance document on the preparation and submission of novel food applications in order to clarify the authorisation process" (Source: Section 58(iii) - REPORT European protein strategy | A9-0281/2023 | European Parliament (europa.eu)).
Could this document, if created, provide enough clarity and confidence to alternative protein companies for us to start seeing submissions in the EU? Or could the EU protein strategy lead to a broader questioning of the EU novel foods regime and whether it is fit for purpose in today's 'food tech' world?
The UK and EU are aware of and seem to have the intention to make changes benefiting the alternative protein sector. Whether it is general lack of impetus, focus on, or resource for alternative proteins – there is not currently a clear path of improvement in the legal burdens that alternative protein companies face in either the UK or EU.