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Clarified organic rule could leave businesses outside the law

Date Published: 12/02/2013

Brokers, brandholders and wholesalers of organic products could be falling outside of the law following a recent interpretation of the rules by government.

OF&G Certification & Compliance Manager, Stephen Clarkson
OF&G Certification & Compliance Manager, Stephen Clarkson

Leading organic certifier, Organic Farmers & Growers, has flagged-up the issue after it became apparent that the change had not been communicated effectively to the industry.

As the “competent authority” for organic certification in the UK, Defra has ruled that a broker, wholesaler or brandholder which “takes title” to organic produce in the supply chain, should be subject to inspection and licensing under the organic regulation.

Previously, as a general rule, only those dealing in bulk or unpackaged organic goods required certification. The recent interpretation of the regulation will now see more operators of different kinds falling under its scope, with only a small number of exceptions.

Certification and Compliance Manager for Organic Farmers & Growers, Steve Clarkson, said: “We have been pushing for some time for this clarification of what was a very grey and often confusing area. We’re pleased to now have something definitive, but it has quickly become very clear to our certification team that there are many operators who do not know about this change and are therefore falling foul of the law. If they do not already have a relationship with a control body, no-one seems to be flagging this change up to them and many remain oblivious.”

Defra’s updated guidance asserts that brokers who take possession of goods, perhaps storing or delivering them, fall clearly inside the regulation, requiring full inspection and certification. Brokers who merely take legal ownership (and are therefore within the organic regulation definition of “placing on the market”) also require certification, though it is accepted that this could be delivered with a “light touch” for pre-packaged foodstuffs – generally involving the audit of processes and records, with less frequent physical inspection (usually once every three years).

The only exception in the new interpretation is for brokers who introduce sellers and buyers to each other, but which do not take ownership or possession of any organic product.

Equally, wholesalers who store organic product must be certified as organic, again with a light touch approach supported for those dealing only in pre-packaged goods and those who only “take title” to the goods, without physically receiving them.

Brandholders subcontracting out production and processing to third parties also require certification if they retain ownership of the product in question. The exception to this is where the brandholder does not take ownership until the product is “stored in connection with the point of sale”, for example a retailer taking delivery of goods. The latter will not require certification.

Mr Clarkson added: “There will always be complexities to this system and there will be many who are not immediately clear where they stand. Fortunately, with the aid of these clarifications from Defra, our processor certification team now know exactly where everyone fits in to or out of the certification system and will be happy to definitively advise anyone who comes to us with the question.”