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Food supply chains & COVID-19: New power to investigate disruption

14 April 2020
Food Sector | DWF
Analysis of an as yet untriggered power provides an insight into how the Government and Devolved Administrations could compel participants in food supply chains to provide information in the near future.

The Coronavirus Act 2020 (the "Act"), a wide-sweeping piece of legislation introduced in response to COVID-19, came into force on 25 March 2020.

The Act facilitates investigations of the Government and Devolved Administrations into disruption in food supply chains by giving them the power to compel those in the industry to provide information.

The Government currently relies on information provided voluntarily to investigate disruption – a position that guidance accompanying the Act suggests should not be changed unless necessary.

Accordingly, further regulations triggering the commencement of the power are required before the power can be used. Whilst this means participants in supply chains cannot be compelled to provide information just yet, the power provides an insight into what may be expected of them in the near future.

Who may issue the request?

The Secretary of State, Scottish Ministers, Welsh Ministers and Department of Agriculture, Environment and Rural Affairs in Northern Ireland (the "Appropriate Authority") may issue a written request for information.

Before issuing the request, the Appropriate Authority must have previously requested the information (even prior to the Act coming into force!) and received no information or information that was false or misleading to a material extent.

What information may be required?

Only "relevant information" necessary to establish whether a food supply chain is disrupted, at risk of disruption, or the nature of the disruption or risk may be requested.
Information will be deemed to be "relevant information" so long as it meets the above and concerns activity of the person subject to the request (providing such activity is connected with the supply chain in question).

What information this may include remains unclear, but it could be argued to extend to information concerning stock levels, orders, deliveries and even pricing strategies.
The Appropriate Authority may only use the information to investigate whether disruption is occurring, mitigate the effects of disruption or reduce the risk of disruption. Consequently, the information may only be disclosed for these purposes and must be anonymised where passed to non-governmental recipients.

Who may be subject to a request?

The request can only be addressed to persons in, or "closely connected" to, a food supply chain, namely: 

  • persons carrying on agriculture, fishing or aquaculture ("Producers");
  • persons in the supply chain between the Producers and end-consumers ("Intermediaries");
  • persons supplying items to the Producers such as seeds, equipment and feed; 
  • persons providing goods or services to Producers or Intermediaries relating to food safety or animal welfare; and
  • bodies representing those above.

What happens if the request is not complied with?

Where a person fails to comply with the request "without reasonable excuse", or provides information that is false or misleading to a material extent, the Appropriate Authority may impose a financial penalty. 

This penalty may be up to a maximum of 1% of the turnover in that person's most recent complete accounting period. 

What does the power mean for those in industry?

It is clear from guidance surrounding the power, and the wording of the power itself, that the Government's focus remains on receiving information provided voluntarily.  The fact the power is not in force yet only illustrates this point further. 

However, those in industry should note that the inclusion of the power in the Act may indicate a readiness for the Government to take a more proactive role in the industry. Indeed, the guidance linked to above suggests that the "Government may seek to intervene to support industry efforts to restore efficient and equitable supply" in the event of disruption. 

Therefore, attention should be turned to observing whether this power is ever activated, as it may serve as a precursor to further government intervention.

For more information please contact one of our experts below.

 

View more insights on our COVID-19 Hub 

Further Reading

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