Chairman,
Ladies and gentlemen, food is safer than ever. But that doesn't mean people believe it. I am talking to you today representing 38 international food retailers currently affiliated to the Global Food Safety Initiative Task Force. I would like to update you on what we are doing to reduce the sense of unease many consumers feel about their food. We cannot accept that food items, rightly or wrongly, are perceived by the consumer as unsafe. We will not sit back. We will shoulder at least our own responsibility on behalf of the consumer. That there are other parties who should do the same is obvious, and I'll come back to that later.
Global retailers and suppliers are taking a leadership role in maximizing food safety throughout the supply chain. We are working together on a non-competitive basis to address this truly top priority. In close cooperation, CIES and FMI have teamed up with the food safety specialists of leading global retailers and manufacturers to orchestrate the activities of the Task Force. I am proud that Royal Ahold is very much part of the effort and I compliment my fellow CEO colleagues on their commitment to this vital initiative. We're all in this together. We cannot leave food safety only in the hands of governments, even though they historically ensured through legislation and controls that food was produced in a safe way. Governments have to change policy, focusing on the weakest links in food chains and recognizing the safety measures being taken by responsible food production and distribution players.
We as food retailers need to know how the food is made, where it comes from, how it was grown, what ingredients were added, who supplied what when and all kinds of other major and minor issues to ensure that our customers continue to trust their food on safety. Over the next 15 minutes, I would like to detail some of the issues and tell you what the global food safety task force has done since May last year. The 38 retailers listed on this slide - all the key industry players - have joined the initiative. Together we aim to guarantee the consumer that the products on the shelves of our worldwide store network are safe. How we plan to do that and where we stand today is what you are going to hear.
1. Global Food Safety Standards.
It is hard to believe that worldwide over 135 different supplier standards for food safety are in use today, resulting in different criteria and auditing practices and leading to negative cost implications and barriers to trade. The Global Food Safety Initiative, launched in Dublin in April 2000, can only guarantee that food items are safe if we use fewer though stricter standards. To do so, we have reached full agreement on the establishment of a few benchmark standards. The benchmark standards will be used for comparison purposes and for the accreditation of audit organizations.
For suppliers, uniformity in standards accepted by all retailers provides a considerable cost saving. This is an additional not unimportant reason why they have shown so much interest to cooperate. The party to benefit the most from this is the consumer, whom we now provide with a global norm in food safety. The Task Force invested considerable time in reviewing international legislative requirements, including the Codex Alimentarius, ISO standards and related codes of practice. I am proud to inform you that the Task Force this month completed the set of criteria that creates a global benchmark model for food safety standards.
The model covers quality management systems, good practices in agriculture, manufacturing and distribution and a Hazard Analysis and Critical Control Points (HACCP).
To get this far in a relative short period of time, an excellent working relationship on food safety among global food retailers and manufacturers has been established. This partnership also includes participation of both large and small manufacturers and producers from the agricultural sector. Top food safety experts of well reputed manufacturers such as Nestlé, Danone, Sara Lee, Unilever, Kraft, General Mills, Cargill and Coca Cola have confirmed the need for and acceptance of our benchmark model. It is their tool to boost food safety upstream the supply chain. Establishing criteria is not enough. An international auditing and certification system is also required for use by companies and authorities specialized in this field. Our Task Force has developed precisely that. The auditing and certification system addresses all key issues including the frequency with which audits are performed, the manner in which they are conducted, and the training and competence of the auditors themselves.
The Task Force has also developed a protocol for accreditation of auditing and certifying bodies to ensure their compliance with global standards. They are subject to rigorous scrutiny and accountability, because that is what consumers all over the world deserve. Following publication of the model at the upcoming CIES Food Safety Conference in Geneva this September, the formal endorsement process of existing food safety standards from organisations such as BRC (British Retail Consortium), SQF (Safe Quality Food) and Eurep Gap will get underway. Speed is essential as we cannot afford to lose any time.
Specific tools the Task Force of the Global Food Safety Initiative intends to make available include an audit protocol, a guidance document for certification bodies and a general organizational framework. These will be available in the second half of the year. I call upon food retailers and manufacturers to demonstrate their leadership in food safety by implementing the global food safety standards the moment the system is in place this Fall. Of course, retailers can only do so if they themselves apply HACCP-based safety procedures.
Allow me to go to my second theme of today, that relates strategically to products from the agricultural sector. To service and inform the customer better we need a Farm to Fork approach.
2. The need for a "Farm to Fork" Approach
Ironically, the BSE and foot-and-mouth crises in various European countries have moved thinking forward in this respect. The alarm bells and the devastating happenings in many European countries made a major impact in local communities and have made us all aware that a restructuring of the agricultural field and production methods is imminent. A generation ago, food safety was not an issue that taxed the mind of more than a handful of people involved in that specific field. Food was not only relatively safe, but incidences of contamination tended to be local in nature. Rarely did they make international or even national headlines. Attention was focused on abattoirs, factories and supermarkets, and resources were invested in treating the few contaminated products rather than ensuring that herds or flocks were free of contamination in the first place.
Then as now, contamination of food took many forms, ranging from microbiological to chemical and radiological. I need hardly remind you of the case of toxic cooking oil in Spain in 1981 that reportedly caused 800 deaths and some 20,000 injuries. Not that far from where we are sitting today is Chernobyl, a town that loomed into the international limelight 15 years ago when food contamination by radio-nuclides led to the contamination of wide areas of Europe. And more recently, the incident of toxic mustard seed in India in 1998 and the dioxin found in poultry in Belgium in 1999 stole the headlines.
If the BSE calamity has been good for one thing, it has firmly focused the mind on the first link in the food chain - the farm. Put simply, if contamination-free animals and poultry can be ensured there, it is so much easier to keep the products free from contamination further along the food chain. That means we need to make the agricultural sector fully transparent. At the same time we have to develop a streamlined process enabling industry players, farmers, governments and other authorities to join forces with us in resolving safety problems as they arise. The key driver in this partnership must be the protection of the interest of the consumer. Fully controlled supply chain projects should guarantee that from "Farm to Fork" the complete production process and all its contributors take their responsibility.
The European food distribution sector, represented in Brussels by Eurocommerce and the European Retail Round Table, is developing a proposal for pilot projects in all individual EU member states. This proposal involves all players from "Farm to Fork", aiming at agricultural production based on consumer demands. It also focuses on securing safety, ecology, animal welfare and world market quality competitiveness.
Let me now turn to my third theme - how we seen the role of government in all this, and how we strive to encourage cooperation between the worldwide food sector and national and pan-national governments and authorities.
3. Encouraging worldwide government cooperation.
Most quality retailers and manufacturers put the customer first and foremost. Members of the Global Food Safety Initiative believe that worldwide trade issues or political disputes should not be allowed to come between our core focus: the production and distribution of wholesome, nutritious food and related products in the safest possible way.
Trade disputes between North America and Europe, between Europe and Asia, or concerning Latin America, Africa or anywhere in the world should not be an excuse to exclude a region or country from the food safety initiative.
As one of its other priorities, the Global Food Safety Task Force encourages, advances and develops cooperation between the food industry and government policymakers. This is all the more vital as we believe that consumer trust in the activities of government regulators to ensure food safety has gone down drastically, especially in Europe.
One of the main challenges for government, especially in Europe, is the need to reform agricultural policy. To maximize food safety, the European Commission and national governments have to eliminate structural overcapacity in the agricultural sector, decrease wrongly-directed subsidies, increase overall quality of the sector, drive out non-value adding costs, ensure tracking and tracing and, based on it, deliver adequate product information.
This can only be successful if done together with the private sector in a supply chain focused approach. The process hereto always starts with the consumer top of mind. Their wish is our command, and should be the government's too. Specifically in Europe, we endorse the multi-functional role of agriculture. Here too we see a huge need for sustainable rural development, environmental protection and animal welfare alongside the number one imperative of food safety. The necessary initiatives must result in a new, strong, competitive agricultural sector.
We urge the European Commission, European Parliament and the governments and politicians of individual nations (including future members of the community) to bite the bullet and restructure the total agricultural sector in Europe. In North America, we see a different situation. We respect for example the role of the Food & Drug Administration (FDA) to secure food safety. In our opinion, there is nothing wrong in Europe copying all the good things the FDA represents. As retail specialists, close to the consumer, we are more than willing to offer governing bodies in Europe our experience and know-how. But stop talking. Action is needed now, because safety scares will continue to happen, that is also a fact of life.
4. Rapid alert system.
In this respect, the Global Food Safety Task Force recognizes that developing an early warning system among retailers is one other measure. The Task Force has set and evaluated the elements to be included in an early warning system and is running a pilot project to test its effectiveness. Participants in the pilot are exchanging food safety information through the internet and keep each other aware of any concerns. Once the full process is in place with all retailers using it, we will make another quantum leap forward. We have to, the consumer expects it from us.
Traditionally - and too often - food reaches the consumer before sufficient information is available to take a food safety decision. This serves neither our sense of social responsibility nor our business interests. We feel strongly that a rapid alert system would improve the speed and effectiveness of the industry's response to food safety crises. Such system facilitates the flow of information to all parties concerned, quickly, accurately and with clarity. It helps us also to take action when local incidents impact a wider audience.
We are not limiting ourselves to communicating information expeditiously among food retailers. We also want to improve rapid alerts with suppliers and governments. We are working diligently to shape this rapid alert process and expect by October to have the Early Warning System totally operational.
Now I would like to move on to my last theme - promoting consumer education.
5. Promoting consumer education.
With respect to food safety, we know the consumer's kitchen is still a weak link in the food chain. U.S. food retailers have joined forces with the FMI to develop a so-called "Fight Bac" campaign to heighten awareness of kitchen hygiene, proper food preparation and simple safe-food-handling messages directly to the consumer. And this is necessary, because research shows that consumer know-how of prevention principles to minimize food-borne disease is decreasing at the same rate that ready-to-(h)eat, microwave and outdoor consumption of food are increasing.
More graphically, over 50% of customers do not really understand new food technologies like irradiation, biotechnology, genetic modification or integrated crop protection. In the U.S., for example, a vast majority of mothers with children are sincerely worried about the presence of chemical residues on fruit and vegetables.
The Task Force, after having completed its efforts on the food safety standard, will start working on consumer education and information based on the FMI experiences as of the end of this year. Other geographical regions will also contribute to this initiative. A worldwide approach is necessary as all people have the right to safe food wherever they are. That's why we call it a global initiative.
Ladies and Gentlemen, as food retailers and suppliers, we shoulder our responsibility squarely to provide our customers with remarkable abundance, variety and value in safe, quality food produced in a sustainable way. We believe this approach is the best way to increase the long-term prospects for the world's food industries and ensure real improvements in food-borne disease prevention as well as in social accountability by maintaining and boosting customer confidence in food in the 21st century.
We have to ensure that governments also see it this way and act accordingly. We have established the best food safety standards for use by all parties. We now have quality management systems in place as well as good agricultural practices with links to manufacturing and distribution. The hazard analysis and critical control points are also essential tools.
Implementation of all elements of the Food Safety Initiative has started and seldom have we seen such cooperation among partners that normally would regard each other as true competitors. As leading industry players, we urge governments to again assume, as they did in the past, their responsibility to set up control and science-based institutes at national and European level, with sanctions at hand to keep irresponsible behavior at bay. We also plan to embark on a consumer education campaign jointly with government to make consumers more aware of what they can do to help themselves.
In summary: food safety is on top of everybody's priority list. We have jointly developed a mission, a vision, and action program - and we are committed to making it happen rapidly. May I congratulate you and your staff on what we have achieved so far and urge your continued commitment to what we must yet accomplish.
We count on you in the months ahead.
Thank you.