Speech to the Global Food Safety Forum

Thank you for the introduction. It is a pleasure to address this forum today and to welcome visitors from China, the United States, Australia and New Zealand .

Can I acknowledge:

• Mr Rick Gilmore, Chairman of the Global Food Safety Forum
• Dr Helen Darling – for bringing this conference to New Zealand
• Dunedin Mayor Mr Dave Cull

I’m very pleased that the Global Food Safety Forum has chosen New Zealand as the location for its first such event outside China.  New Zealand is a fitting choice, given the strength of the relationship between our countries, the importance of China as a growing market for New Zealand’s high-quality food exports, and our well-deserved reputation for having a world-class food safety system.   

Today I want to emphasise the critical importance of food safety – for the environment that supports us all, the health of consumers, and the strength of our economy. In particular, I want to emphasise how critical it is that we all play our part in that system.

New Zealand is in the business of food. We produce, process, retail, import and export food. Agriculture, fisheries and forestry, are central to our economic wellbeing, contributing 12.7% of GDPand representingover 11.8% of employment.

Food exports account for 54 per cent of New Zealand’s total export value and our food and beverage exports go to around 200 markets.

The goal of the Government’s Business Growth Agenda (BGA), is to lift NZ’s ratio of exports to GDP to 40 percent by 2025.

To achieve this we need to recognise and respond to changes in market dynamics and consumer expectations. Ensuring a safe and secure food supply is one of the most fundamental responsibilities of any government. And it is one that the New Zealand Government takes extremely seriously. 

A successful food business must also play its part.

The key to success will often be the ability of a company – or a country – to respond to the market, to recognise and manage risks and to seize opportunities.

Consumer interest is increasingly going beyond food safety into values-based attributes such as animal welfare, sustainability, and production methods. Some areas are covered by regulation and some are not, but all areas benefit from a collaborative approach.

The process of globalisation has had many consequences.  In the food area it means that suppliers of food are more connected to markets and consumers than we have ever been before.

Fonterra

For New Zealand, exporting to nearly 200 markets around the world, the increased connectivity – and the inevitably increased scrutiny which results from it - does have its challenges. We in New Zealand have had recent first-hand experience of dealing with these: any incident regarding food, whether it concerns food safety or not, reverberates throughout our markets.

I am sure you are all aware of the recent incidents New Zealand has faced, which put our food safety systems in the international spotlight.

It goes without saying that New Zealand was very pleased when testing definitively established that there was in fact no Clostridium botulinum contamination in Fonterra whey protein concentrate.  That incident highlights the importance of ensuring world-class food safety systems and maintaining consumers’ and regulators’ trust.

New Zealand’s task – and one to which we are fully committed at both the government and industry level - is to redouble our efforts to assure consumers of the safety of New Zealand production and our food safety systems.

Already we have seen Fonterra release their own investigation into what happened, and they have committed to making changes.

The Government has two official inquiries underway. The Government’s Ministerial Inquiry is expected to deliver an interim report in mid-December, and the Ministry for Primary Industries’ compliance investigation is expected to be concluded by the end of the year.

Our systems have been tested by this incident, but we are determined to learn from what happened and take the opportunity to improve our systems. 

Holding these inquiries is important way of showing the world that we are open, honest and transparent.

Market demands

The ongoing challenge for suppliers of high-quality food products such as New Zealand is always to make sure we meet what the market demands.

This means products which are  produced sustainably, which are safe, and which are affordable.  The world might be growing smaller but the needs of its inhabitants are becoming greater. This is a challenge that producers, processors, marketers and governments must work together to meet.

New Zealand is well-placed to meet these challenges. The importance of meeting consumer needs is a sharp lesson we learned 30 years ago when agricultural subsidies were removed and the economic viability of our famers came to depend entirely on their ability to adapt to the demands of the market.

I note one of the sessions to be presented here is ‘Safe food as a trade and business advantage’. This is not a new concept to us. We have operated a systems-based regulatory framework for many years that recognises the importance of the whole-of food-chain approach to achieving food safety.  

We have negotiated a network of trade arrangements with our export markets around the world on the basis of that framework.  And we manage a very busy programme of study tours to New Zealand by technical experts from countries that are keen to replicate some of our systems.

Time does not stand still and New Zealand does not rest on its laurels. We are very conscious that we have to constantly look to improve how we do things.

Rules-based trade

New Zealand’s approach to trade policy is based on strong support for the rules-based multilateral trade system.

Even where we have negotiated free trade agreements with individual countries or with regions, the bedrock remains these multilateral trade rules and commitments. 

We are a small country without the leverage to impose our preferred approach on our trade partners.  We work with our partners in international and regional forums to agree on mutually acceptable solutions.

Without the rules-based system and the consistency, and climate of certainty that international standard-setting bodies such as Codex provide, New Zealand would struggle to secure adequate market access.

Changing expectations

However, in New Zealand we recognise that things have changed -  it is not enough to rely on the assumption that people do not want to know more than that ‘we are good people, we know what we are doing’.  

We have always spent time and effort making sure that our production and management systems are reliable and deliver the quality outcomes that people  require. 

What will change in the future is that we will spend more time discussing these systems, and sharing information on ways in which they are being improved.  This enables the increasing numbers of consumers who want to know more about the safety of their food to have full confidence in its origins and systems of production.

Governments and businesses are not the sole source of information anymore. Communications about risk through official channels  now has to compete with social media.  And, unlike social media, which are generally not held to account for the accuracy of information, official risk communication needs to take the time and care  necessary to  gather the facts and to give them proper consideration.

Government regulators have no choice but to approach the management of food safety on the basis of reliable, justifiable and transparent regulatory and commercial systems.

In the long term this is the only way that consumer confidence can be won and held.   Social media  too is a component of this story.  It will increasingly be seen in the future as an effective channel  to convey accurateinformation across in ways that are accessible to modern consumers. 

In New Zealand we have built our food business on our  reputation for safety and by providing consumers what they want. We have done this successfully and exported food for over 120 years.

We – government and business – need to be smart about keeping up with changing consumer expectations.  What we use to feed and treat animals, fertilise crops and manage pests, transport, process and package food regardless of its destination or origin, all counts towards food safety. 

It is the Government’s job to make sure the policy framework is internationally recognised to be fit for purpose so that our food exporters can build on that level of confidence to persuade consumers to buy New Zealand food products.

The task is not small. New Zealand has 40,000 regulated food businesses. Each business is responsible for implementing regulated standards across all food production, handling, processing, storage and transportation.

The system is supported by 11 scientific programmes that test food across the entire food supply chain.  More than a million tests a year are commissioned by the Ministry for Primary Industries to monitor the effectiveness of the regulatory system. 

Over decades of investment in systems and training , we have built a robust and effective official food assurance system. It is one which has provided consumers around the globe the confidence in our products – confidence that it meets our own high safety standards and the requirements of each market.

In addition to this regulatory testing, AsureQuality - which provides food safety and biosecurity services globally - also analyses over 1.4 million food samples every year on behalf of its clients.  This is all part of good due diligence: making sure the system works and consumers are confident that it works.

One of the most significant changes in the global economy in recent years has been the increasing importance of global value chains. This means having oversight through the supply chain – even if the food has changed hands.

The reputational benefits and risks run through the producer, to the manufacturer, the exporter, the shipping company, the importer, the distributor and the retailer. Knowing who they all are and having a shared interest in protecting the integrity of food and the reputation of a brand throughout the process is a good start.

The WPC incident highlighted the critical importance of supply chain management, and ensuring traceability at all points throughout the supply chain.

Government assurances can assist an exporter to access a market, but they cannot guarantee its commercial success. Business-to-business relationships must be established across borders to provide the level of confidence consumers are now demanding. Systems and relationships that maintain the integrity of the supply chain and can demonstrate that as a commercial advantage to consumers are becoming a necessity.

We recognise that the role of government in the market success area is changing and we need to work together to support the supply chain within our respective spheres of responsibility.  

Relationship with China

On that note, and with the large number of Chinese delegates here, I want to say a few words on the extremely important relationship New Zealand has with China, including in the area of trade in food products.

New Zealand was the first OECD member nation to sign a Free Trade Agreement with China in 2008, and this is something we are very proud of. Over the last five years it has been an outstanding success.

Two-way trade between our countries is now worth over $16 billion. Our aim is to increase bilateral trade to $20 billion by 2015 and we're on track to achieve that goal.

New Zealand’s exports to China have grown from $2 billion in 2007 to over $8 billion  in September 2013.

This is spectacular growth and as a Government we are putting a real priority on building our structure for robust future growth.  This includes work on supporting  New Zealand’s reputation in China for quality products and working closely with regulators.

As part of this, the Ministry for Primary Industries is working on a 25-point plan to improve our dealings with China.

Two new Ministry for Primary Industries (MPI) staff will be stationed in China by the end of the year, in addition to the existing Counsellor for Agriculture and a number of locally engaged staff.

MPI are doubling their market access team in Wellington from 8 to 16, and investing in training to strengthen and deepen the relationship between MPI and key Chinese regulators.

And as you’ve seen with the video at the start of my presentation, the Government is also helping exporters to tell the ‘New Zealand Story’ overseas.

Conclusion

I want to finish by noting that while the world is rapidly changing, the role of Government as regulator remains a fundamentally important one.

We have the crucial responsibility as government to manage regulatory systems so that food is safe to consume.  This role has to be met in an environment in which consumers are demanding more information, and producers are seeking to increase production and quality.    

Let me finish by assuring you that New Zealand is well-used to adapting to, and sometimes leading, change of this kind. 

We are producers of quality agricultural and horticultural products for the world.  New Zealanders demand that the standards in production and regulation that have put us in the position will continue to adapt and improve so that we retain this prime position.

Thank you again for the invitation to open this conference and I wish you all the best for a productive few days.