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Food Connect Autumn 2008

NEWS FOR THE PROCESSING, MANUFACTURING AND EXPORT SECTORS

Autumn 2008

Voluntary introduction of Food Control Plans

A change in timing in the development of the new Food Bill will see the introduction of Food Control Plans on a voluntary basis for some sectors of the food industry in mid-2008.

In October last year Government agreed that a new Food Bill should be written, and development of the legislation has been underway since.

“Timelines for such a complex piece of legislation are always uncertain”, says Carole Inkster, NZFSA Policy Director. “As the Food Bill will not complete the Parliamentary process for a mid-2008 start, we are working to find ways to implement components of the system voluntarily under current legislation. This approach has received a strong groundswell of support and we want to maintain the momentum built up over the past few years.”

In the second quarter of 2008, NZFSA will consult on any aspects of the voluntary programme that have not to date been covered by the broader Domestic Food Review. The intention is to clear the way for business operators in the food service and catering sectors to apply for an exemption from the Food Hygiene Regulations 1974 by being able to implement and register Food Control Plans as Food Safety Programmes under the current legislation.

The imports programme will also be affected by the delay in the Food Bill’s introduction and NZFSA will consult on aspects of that programme that can be delivered under current legislation.

The extra time taken to get the new Food Bill passed offers an opportunity to test systems in the new regime. This has the advantage of allowing NZFSA, Territorial Authorities and food operators more time to develop skills and systems to support the new environment.

We expect to be out discussing the system more broadly in the second quarter of 2008 with the intention of introducing it in mid-2008.

Full policy position paper outlining transition timelines for implementation.

New Code of Practice for poultry processing sector – News for the Poultry Industry

NZFSA and the New Zealand Poultry Industry Association have developed a new code of practice specifically for poultry processing.

For many years, the Poultry Industry Processing Standard 5 (PIPS5) has been the industry’s main standard and guidance document. This standard referred to a number of other meat-processing manuals, making it difficult and complex to follow.

In conjunction with the industry, NZFSA has developed a code of practice (COP) to capture expected standards in one document.

The Poultry Processing Code of Practice includes:

• improvements for control of Campylobacter

• expected standards for good operating practice

• procedures to promote compliance with legal requirements under the Animal Products Act 1999.

The COP is being developed and issued in stages according to priorities set under NZFSA’s Campylobacter strategy. The first stage is completed and includes:

• Part 1, which covers the overall structure and purpose of the document

• Part 2, Chapter 5, which covers slaughter and dressing.

Other Parts of the document will be released as they are developed.

An RMP operator is expected to follow the COP unless an alternative is registered as part of their RMP. Operators must therefore review their RMP and either:

• make any necessary changes to ensure that it aligns with the COP – this would be considered a minor amendment; or

• submit their alternative for evaluation (with validation evidence if appropriate), then apply for registration of a significant amendment to the RMP.

The new COP overrides PIPS5 where relevant, but PIPS5 will still be the base requirement for some export markets for those things that are not yet covered in the new COP. In practice this means that processors of:

• non-broilers must continue to use PIPS5 as the basis of their export requirements or as guidance for their domestic requirements

• broilers must comply with the new COP (unless an alternative is approved as part of their registered RMP as described earlier) but will default back to PIPS5 and the referenced meat manuals where the new COP does not yet cover the issue.

The COP will be implemented on 1 March 2008. NZFSA will work with the Poultry Industry Association to ensure all poultry processors are aware of its requirements.

Poultry Processing Code of Practice

Not long now to get your Wine Plan in – News for the Wine Industry

Wine standards management plans are due to be submitted to NZFSA for registration by 1 September 2008 – only six months away.

For those who need a bit of a brush up, a wine standards management plan (WSMP) is a document that demonstrates how winemakers are complying with the Wine Act 2003.

Almost all winemakers (which includes those who make grape wine, fruit wine, cider and mead, contract winemakers, bottling plants and mobile bottlers) will need to register a WSMP. However, winemakers who make less than 10,000L wine a year, and who sell all of their wine in New Zealand, may apply to be exempt from the requirement to have a WSMP. These very small winemakers will still need to comply with other requirements of the Act, including the standards for safety, identity and labelling of wine.

WSMP template for grape wine

New Zealand Winegrowers and NZFSA, with a lot of input from grape winemakers, have developed a template WSMP that winemakers can pick up and use instead of developing their own from scratch.

Three documents form the package:

1. New Zealand Winegrowers Wine Standards Management Code of Practice (COP) outlines the procedures and requirements to meet the wine standards and includes record-keeping requirements of the Export Code. It is not mandatory to follow the COP, however, if a wine business chooses not to follow it, alternative documentation will need to be evaluated to ensure the procedures meet WSMP requirements.

2. Application of HACCP to Grape Winemaking outlines the processing steps, hazards and controls for winemaking. Winemakers only need to do something if they do a processing step that is not covered by this document.

3. WSMP outline for Grape Wine is the formal part of the WSMP. The outline needs to be completed and signed by the winemaker and sent to NZFSA for registration.

Wine standards management plans

WSMP template for fruit wine, cider and mead

NZFSA is in the process of finalising a similar package for fruit wine, cider and mead makers. We have been visiting wine and cider makers to test the material to ensure it is practical and user-friendly. We are aiming to have the documents on the website early in April.

Dairy export quota opened up – News for the Dairy Industry

The dairy export market has opened up for exporters who meet the eligibility requirements.

With the passing in December 2007 of an amendment to the Dairy Industry Restructuring Act (2001) registered dairy exporters can now apply for quota to previously restricted markets. These new markets, which include the EU, Japan, the Dominican Republic and the US, opened up as their exclusive rights expired progressively from December 2007.

To be eligible to export, dairy product exporters must hold a valid export licence, apply for authorisation and the product must be manufactured at premises that have a registered Quota Compliance Programme.

This has meant changes to NZFSA’s systems to coordinate the registration of exporters for quota markets, obtain quota certificates and record that the product meets manufacturing, storage and testing requirements (via the Quota Compliance Programme).

Some parts of the new process will be managed by MAF, such as allocating export licences, maintaining a register of eligible export licence holders and transfers, while NZFSA will be responsible for compliance, certification and enforcement.

The export licences allocated by MAF will be registered in a Quota Management Register (QMR) which holds information relating to quota programmes, periods, product types, specifications, markets, quota licence holders and quota transfers.

Once an exporter has a licence they apply to NZFSA for authorisation to export to a quota market using NZFSA’s new Quota Management System (QMS) located in the Auckland Dairy Certification office. The QMS can track quota use and also issue quota certificates if required by an importing country.

Designated quota markets may also require a health/sanitary certificate, a country of origin certificate, a valid import licence and a valid customs export entry.

Butter and cheese exported to the EU must also meet the requirements of specification D204.1 ‘Quota Compliance Programmes’ and the December 2007 specification amendment.

This specification and the IMA Certification Regulations will be replaced in the middle of this year with the Dairy Export Products Regulated Control Scheme and new Quota Compliance Specification.

Note also that the fat content for butter for the EU quota market has changed. The EU Commission Regulation 2535/2001 now allows New Zealand quota butter with a fat content of 80–85%, whereas previously the fat content was 80–82%.

For general enquiries, email dairyquota@nzfsa.govt.nz

More information on the dairy quota management system

More information about licences (takes you to the MAF website)

Cost recovery under the ACVM Act –NZFSA update

It has been five years since the fees and charges under the Agricultural Compounds and Veterinary Medicines Act 1997 Act (ACVM Act) were last amended so it’s timely for NZFSA to review them.

When deciding on cost recovery options certain rules must be followed. Government essentially makes decisions about the provision and funding of government-provided functions, through the budget and purchase agreements. It is guided in this by departmental advice on whether it should purchase regulatory functions and how they should be funded. Government guidelines determine who should pay. For instance, public goods should be government (taxpayer) funded, while other goods (private or industry) should be funded by the users or beneficiaries.

If a function or activity is an industry good, costs can be recovered from that sector, and guidelines set out the key principles for cost recovery. In general, charges should be set at the full cost of providing the service (ie, including all overheads) but should not be excessive in relation to the costs incurred.

Setting standards and compliance monitoring best fit the definition of an industry good and therefore are industry funded. The same holds for approval and accreditation services, which are generally private goods. There are other considerations as well, in that charging provides incentives for industry to monitor the regulator’s cost and level of service.

In general, charges should be efficient, cost effective and consistent with the policy objectives of the agency. Transparency over charging is also important, in that the process for setting charges should be clear and appropriate.

The ACVM Act provides a ‘menu’ of tools (cost recovery mechanisms) covering fixed and variable fees and charges, sliding scales, differential pricing, levies etc.

Since the fees and charges under the ACVM Act were last amended, a number of factors have influenced the need for NZFSA to review the cost recovery regime. These factors include:

• salary and operating cost increases

• increased workload, particularly in the development and review of standards for agricultural compounds, regulatory control and compliance monitoring

• the provision of new services to ACVM registrants and other regulated parties as a result of recent amendments to the ACVM Act (see page 8).

NZFSA has released a discussion paper of cost recovery proposals under the ACVM Act and is asking for submissions from all regulated and interested parties on any aspect of the proposals.

The discussion paper sets out the new and existing services that NZFSA provides to ACVM regulated parties, which are subject to these cost recovery proposals and describes a costing model to cost these services.

The model shows how the public, private or industry nature of the new services provided under the Act could be determined. The proposals cover the costs of standard setting, approvals and

monitoring and compliance services provided by NZFSA under the ACVM Act. They also include border clearance for imported agricultural compounds provided by Biosecurity New Zealand.

Among the proposed changes are increases in hourly rates for certain services and a single fixed annual charge. The target implementation date for the proposed new rates is 1 July 2008. No changes are being proposed to the existing Crown/industry funding split.

NZFSA welcomes comment on the proposals and is especially interested to know what impact they may have on your business if they were adopted.

Review of Agricultural compounds and Veterinary Medicines (Fees & Charges) Regulations 2002

Honey gets official tick for residue testing – News for the Bee Industry

A new regulated control scheme has been developed under the Animal Products Act 1999 to demonstrate to our trading partners ongoing freedom from and control of residues and contaminants in exported bee products, principally honey.

A new regulated control scheme (RCS) developed by NZFSA will offer more assurance to importing countries around residues and contaminants in New Zealand bee products and should make it easier to get into overseas markets. Having a general export RCS in place will help NZFSA negotiate less costly outcomes for exporters to those countries requiring residue assurances and provide some flexibility around the testing (either more or less as required).

A number of countries require an official assurance for residues and contaminants in exported bee products. However, certificates for bee products exported to some other countries require health attestations that they ‘have met the New Zealand regulatory requirements for items intended for human consumption’. This can only be managed with a comprehensive testing programme.

Importing countries of New Zealand honey may also have prescriptive residue and contaminant standards to which New Zealand exported bee products, mainly honey, must adhere. Some countries may require New Zealand exporters to conduct per-consignment testing and provide the test result along with other documentation required for importing bee products.

The RCS will help to minimise the impact of the more onerous importing country demands. The testing programme’s size and scope will reflect the concerns of these countries and the accumulated record of compliance.

EU export honey testing funded by levy

Previously, only honey exported to the EU needed to be tested for residues, as required by the European Overseas Market Access Requirements. This was funded by a voluntary levy set by the honey exporters and covered the sampling, testing and administration costs of AgriQuality New Zealand Ltd (now AsureQuality New Zealand), which managed the operational sampling programme for NZFSA.

Although NZFSA negotiated the laboratory and sampling costs for that programme and accumulated the test results in its database, it has never recovered any administrative costs for the programme. In addition, the export levy did not provide for surveillance (ie, further scrutiny of beekeepers who supply noncompliant product) or surveys, which should be part of a comprehensive and credible programme.

All honey exports eligible for testing

A 2006 report by the European Food and Veterinary Office (FVO) expressed some concern that the honey sampling and testing programme was specified only in the EU Market Access Requirements rather than as a scheme in its own right, as is with other animal products.

Such schemes provide standards around sampling, testing, persons who can undertake certain activities and regulatory intervention for non-compliant product. Without them, NZFSA has no mechanism to respond to issues raised by exporters, importers or the competent authority in the importing country concerned.

For these reasons, and noting the comments set out in the FVO report, NZFSA proposed carrying over the current honey residue monitoring requirements into an RCS that will include both the requirements for the EU and other export markets for honey and other at-risk bee products. This RCS will provide for random and targeted sampling and testing of all honey exports. However, only a very small proportion of exported honey is likely to be tested in any one year.

Costs associated with the RCS will be recovered through a levy applied to bee products risk management programme (RMP) holders.

Bee product RMP operators are the most appropriate place in the bee product production chain to meet the costs of the programme as they benefit from the overseas markets who accept the residue monitoring programme. Bee product RMP holders can reflect these costs with their commercial suppliers and clients so that programme costs are balanced across the industry.

The fee option favoured by NZFSA as administratively the least costly would see an increase in the existing annual fee ($258) which NZFSA levies from all bee product processing premises or places. (Remembering that removing the voluntary levy for EU testing will offset this new cost to a certain extent.) This will increase in the 2007–2008 year to an estimated $542 (including GST) per annum for each bee product RMP holder. This levy would be adjusted as necessary in future years to take account of annual variance in the total cost of the RCS as testing increases or decreases. The operational programme will start around 1 March 2008 and cost recovery options from 1 July 2008.

Courts tougher on food regulation breaches – Compliance & Investigation News

NZFSA’s Compliance & Investigation team has had some big wins in court recently.

Compliance & Investigation Assistant Director Justin Rowlands says there is clear evidence that the Courts are handing out stiffer penalties to those who breach food regulations.

“The Courts are recognising the seriousness of these types of offences particularly in regard to the impact they could have on international trade and public health.”

“In the recent prosecution of NZFSA v J & R Moore Holdings Ltd for presenting a bobby calf for processing that contained sulphonamide drug residues, the defendant and the defendant company entered guilty pleas and were convicted and fined $1000.00 plus costs. In the past this sort of offence attracted a fine of around $500.”

Two more cases successfully prosecuted by NZFSA await sentencing.

After a four-day trial in September 2007 in the Wellington District Court before Judge C Henwood, defendants Sea Resources Company Ltd (1st defendant) and Ian Kenneth William Pharaoh (2nd defendant) were found guilty of three charges each under s128 of the Animal Products Act 1999.

In essence, the defendants sold squid, knowing it had not been processed in accordance with the Animal Products Act. Sentencing is set down for early March. During that investigation, NZFSA seized and destroyed over 107 tonnes of non-compliant fish products.

The maximum sentence per charge is a fine not exceeding $500,000 for a body corporate, and in the case of an individual, imprisonment for a term not exceeding two years and a fine not exceeding $100,000.

On 26 November 2007 in the Auckland District Court, Shefco Ltd pleaded guilty to two charges laid on indictment under s11AA of the Food Act 1981. Essentially the charges were that Shefco wilfully acted in contravention of s9(4)(a) of the Food Act by selling tahini contaminated with Salmonella, knowing the sales may create a risk to human health. The matter has been adjourned for sentencing. The maximum sentence is a fine not exceeding $100,000.

Antimicrobial resistance project – NZFSA update

New Zealand’s levels of antibiotic resistance compare well to those internationally but NZFSA will continue to monitor them.

A report released in July 2005 by an expert panel set up to review the use of antibiotics in animals and horticulture made several recommendations. These will ensure that the issue continues to be monitored and will help reduce any likelihood of antimicrobial resistance in people from products used on animals.

Of the 30 recommendations, a number were identified as actions for NZFSA, which will be delivered through its Antimicrobial Resistance Implementation project. This project has been running for the past year and a number of key events have happened in that time.

Information requirements around agricultural compounds and veterinary medicines (ACVM) have been updated, and the risk assessment and review of antimicrobial veterinary medicine registrations is well under way. Registrants who will be affected have been contacted to let them know what will be required.

Veterinary medicines containing Streptomycin have been reviewed and registrants will have two years to provide additional information prior to a formal reassessment of the affected registrations. The one horticultural product containing Streptomycin is currently being reviewed and an update is expected by the middle of 2008.

NZFSA set up a working group that has made recommendations on what is required for an antimicrobial surveillance programme, and this is being implemented. An expert advisory group will be set up to provide advice on the registration of new antimicrobial products and the results of ongoing surveillance.

You can find out more about this project on NZFSA’s website www.nzfsa.govt.nz/acvm/subject/antibiotic-resistance.

ACVM Act is amended – NZFSA update

In October last year the ACVM Act was amended and some significant changes were introduced.

The Agricultural Compounds and Veterinary Medicines (ACVM) Act 1997 regulates risk areas related to importing, manufacture, sale and use of products used on animals and plants. It also ensures residues in food comply with relevant standards.

After 10 years of the Act, gaps in the system and changes in the regulatory environment highlighted the need for it to be updated. On 17 October 2007 the Agricultural Compounds and Veterinary Medicines Amendment Act 2007 came into effect. This introduced some significant changes, including:

• considering public health implications of products

• providing new mechanisms to exempt products from registration

• the ability to recognise persons and approve operating plans

• expanding regulation-making powers with the ability to issue specifications

• expanding cost recovery provisions

• suspending registration and recalling agricultural compounds

• issuing of certificates of compliance.

As a result of this amendment, a number of discussion papers will be released in the upcoming months on cover cost recovery under the ACVM Act and regulation changes relating to a range of areas such as manufacturing, labelling, advertising and own use (including compounding).

For updates and more information, keep watching the ACVM area on our website www.nzfsa.govt.nz/acvm/index.htm.

NZFSA Conference

Food safety – your business is the theme of NZFSA’s sixth annual conference. The focus will be on food businesses moving forward under the Food Bill and the new regime. Keep your diaries clear for September 17–18 at the Distinction Hotel in wonderful Rotorua. More details will be available on our website later in the year.