FSA charges could force abattoirs to shut, body warns

Medium-sized abattoirs could face closure unless the Food Standards Agency changes its charging system, the Association of Independent Meat Suppliers has warned.

AIMS said the FSA was pressing ahead with changes to how discounts are applied despite a High Court judgment which, according to the organisation, found the agency’s charges to be unlawful.

The group said a Court Order was still awaited setting out what the FSA must do to remedy the situation.

Peter Hewson, veterinary director at AIMS, said the agency was acting “as if nothing has happened” and with “no regard for the survival of medium sized abattoirs”.

AIMS said local slaughterhouses played an important role for farmers, retailers and consumers seeking local meat, while also supporting animal welfare by helping to keep livestock journey times short.

“These plants provide the service to local farmers and retailers that ensures consumers can buy local meat and animal welfare is protected by keeping journey times as short as possible,” Mr Hewson said.

AIMS said the FSA Board had previously described discounts as a “subsidy” to industry, but Mr Hewson said the High Court judgment showed they had instead been “partially recompensing industry for FSA overcharging”.

“The sensible thing for FSA to do now is to park its work on the discount system until it has got its house in order,” he said.

AIMS claimed current charge-out rates were “grossly over-inflated”, saying official veterinarians paid £20 to £30 an hour were being charged out at nearly £80 an hour.

The organisation argued that the judgment made clear much of that overhead could not lawfully be included in charges.

Mr Hewson cited the example of a medium-sized AIMS member slaughtering about 10,000 livestock units a year, where current FSA charges of £220,000 were approaching the equivalent of half the plant’s wages bill.

He said the charges were also greater than the plant’s combined costs for business rates, energy and water.

“They bear no relationship to the value of the controls,” he said.

“The charges are not sustainable now and the FSA’s plans to remove all discount for such plants in the future will ensure their closure.”

AIMS said similar plants in the EU were paying around £40,000 a year under a headage system provided for by the Official Controls Regulations.

Under a headage system, charges are based on the number of animals processed rather than the time spent by officials on site.

AIMS said such a system would be simpler, more transparent and easier to administer than the FSA’s current time-based model.

It also argued that headage charging would remove the need for discounts and place greater pressure on the FSA to operate efficiently.

Mr Hewson said moving away from the time-based system was “the only way forward for the survival of medium sized plants that are crucial to the rural economy”.

AIMS said urgent action was needed following a 24% increase in charges this year.

“Immediate action is required to address the dire situation medium sized slaughterhouses find themselves in following the 24% increase in charges this year,” Mr Hewson said.

“Any delay will result in businesses closing as a direct result of FSA’s unlawful charges.”

The organisation also questioned whether current official controls were sufficiently risk-based.

AIMS argued that the controls did not identify the human pathogens commonly associated with meat and said the system needed reform.

Responding to the claims, Junior Johnson, director of operations at the FSA, said: “We understand businesses want clarity on what the court's judgement means in practice and will provide further information as quickly as the legal process allows.”

The FSA said it had acted in good faith on charge rates and was seeking leave to appeal.

“We acted in good faith on our charge rates and, while many charges will not be in dispute, the ruling creates some uncertainty over certain elements. We are seeking leave to appeal,” Mr Johnson said.

He said reinstating the headage rates set out in legislation, which had not been updated for many years, would lead to “a very significant increase in taxpayer-paid support”, with most benefit going to the largest businesses.

Mr Johnson said the FSA’s discount reform work showed that smaller businesses needed support most.

He added: “Food safety is non-negotiable. Our Official Vets and Meat Hygiene Inspectors carry out essential work every day that protects public health, upholds animal welfare, and underpins the £11.3 billion meat industry. That will not change.”