Rural Affairs and Islands Committee

Meeting date: Wednesday, March 15, 2023

Official Report 601KB pdf

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Subordinate Legislation

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Alcoholic Beverages, Fruit and Vegetables (Miscellaneous Amendment) (Scotland) Regulations 2023 [Draft]

Our second item of business is consideration of an affirmative instrument. I welcome the Cabinet Secretary for Rural Affairs and Islands, Mairi Gougeon, and her officials: Kevin Matheson, policy manager in the food and drink industry growth team, and James Hamilton, a lawyer.

I invite the cabinet secretary to make an opening statement.

Thanks for inviting me to speak about the regulations. On 28 February last year, the United Kingdom signed a free trade agreement with New Zealand. During negotiations, the UK committed to making three minor changes to domestic legislation on how wine and other alcoholic drinks are described and marketed.

The Scottish Government remains of the view that the best option for the UK as a whole and for Scotland is the one that Scotland voted for—that is, remaining in the European Union. The Scottish Government’s default position is to align with EU law where appropriate and where that is in Scotland’s interests. However, as a responsible Government, we are required to observe and implement the United Kingdom’s international obligations. The instrument is required to implement the New Zealand free trade agreement.

The changes that are set out in the instrument will bring some flexibilities to how wine and other alcoholic drinks can be labelled and marketed. However, it will not impact on the practices that are currently employed by producers and traders, who can continue to label and market as they currently do.

The changes allow producers and sellers of wine and other alcoholic drinks slightly more flexibility in respect of the information that they choose to include on their labels. The instrument will make three changes to retained EU law.

First, the instrument will allow any wine product to show alcoholic strength to one decimal place—for example, the strength could be 12.2 per cent or 12.7 per cent. Retained EU law currently limits wine to being labelled to show alcoholic strength to whole or half units—for example, 12 per cent or 12.5 per cent. That will continue to remain a possibility for wine that is marketed here or exported.

The concession to label wine to a single decimal place is not new. That possibility was already extended to Australian wines by the EU in its wine trade agreement with Australia, which the UK retained after exit.

The instrument will also introduce a change to rules concerning the labelling of grape varieties for wine that is marketed in Great Britain. It will require that, where more than one grape variety is listed on a wine label, the named varieties must total at least 95 per cent of the content of the wine. Current retained EU legislation requires that to be 100 per cent. The changes will mean that up to 5 per cent of the content may consist of varieties that are not shown on the label.

The changes that are proposed in the instrument will provide businesses that market and produce wine of multiple grape varieties with the scope to vary the production of a wine, to bring improved consistency and quality. UK domestic wine producers have warmly welcomed the flexibility that that will bring.

The regulations will also allow flexibility in how the terms “alc”, or alcohol, and “vol”, or volume, appear with the numerical alcohol content on wine and other alcoholic beverages. The current rules require that “alc” appears before the numerical alcohol content of the drink and “vol” after. The instrument will allow the term “alc” to appear after the numerical alcohol content of the drink.

Together, those changes will facilitate the trade between the UK and New Zealand. They may also help smaller producers in both countries who might wish to exploit a niche for their product in the market but for whom the size of the order would mean a full label change that would not be economically viable.

I stress that the changes are optional. We expect that many in the industry with established markets in Northern Ireland and/or the EU will continue to label and market wine as they currently do to support sales in those markets.

The Scottish Government consented to a Great Britain-wide consultation seeking views from stakeholders in the sector and more widely on the proposal, and the UK wine industry firmly supports the changes set out in this instrument and welcomes the flexibility that it provides.

I hope that I have said enough to assure members of the need for this instrument. It represents just one part of the changes being made that will allow the new free trade agreement with New Zealand to come into force, but in making those changes we have taken the opportunity to give our thriving wine and alcoholic drinks sector flexibility that will support it to trade in the future.

Finally, the instrument also amends article 11 of retained regulation (EU) 543/2011 to correct a minor error that is contained in regulation 5(5) of the Agriculture (Retained EU Law and Data) (Scotland) Act 2020 (Consequential Modifications) and Agricultural Products, Aquatic Animal Health and Genetically Modified Organisms (EU Exit) (Amendment) Regulations 2022. I am happy to take any questions that the committee might have.

Well done on the title of that regulation. We will move to questions. Do you expect that more such Scottish statutory instruments to implement trade agreements will come to this committee?

There is what is set out in the Government’s legislative programme, obviously. You will have seen the debate on the legislative consent motion that took place in the Parliament yesterday, and this instrument is coming forward, but I will ask Kevin Matheson to say whether we expect any more, particularly in relation to food and drink.

No, I am not expecting any. Trade deals with Canada, India, Mexico and Israel are under discussion, and those might filter down, but I have not been given a heads-up about any.

It seems a bit odd that the only SSI that we have to deal with on a trade deal comes down to labelling and the content of the wine or the grape varieties that are used. We drink Australian wine as well, so is this a result of the flexibility within retained EU law or were there already concessions for Australian wine but not New Zealand wine?

As far as I am aware, New Zealand asked for this during the negotiations primarily to benefit some of the smaller producers that provide mainly for the home market at the moment but could see an opportunity to export to the UK.

The EU and Australia have a trade deal that covers wine, which was rolled over by the UK, so that trade deal with the EU and the UK already provides some of the flexibility that we see in this deal, such as the ability to label wine to 0.1 of a decimal point, so we already see that flexibility in other trade deals that the EU has.

I also point out that, in its negotiations with New Zealand, the EU is looking at similar changes with greater flexibility with regard to, for example, the percentage of the grape variety that should be on the label.

Okay. So, one of the main reasons for this SSI is that existing legislation dealt with the issue with regard to Australia, because there was an EU deal with Australia, but similar regulations did not exist within EU legislation in relation to New Zealand. I get that now.

The EU labelling regulations provide for exemptions for trade deals that the EU has done with other countries, so some of those are already incorporated, and the Australian deal, in particular, has been rolled into the UK agreement with Australia. Therefore, New Zealand not having had a trade deal is potentially an outlier. This will give New Zealand the flexibility that it has asked for, and the deal that it has negotiated with the EU has the same flexibility that is going through the EU ratification process at the moment.

I think that you have probably answered my question about the flexibility. I was going to ask you whether, within the free trade deal, this is one way of ensuring that New Zealand can export multiple grape varieties, which it probably does not do at the moment. The main varieties are probably Pinot Noir, Merlot and Sauvignon—we have a great taste for those in the UK—and there is the issue of the alcohol content, too. I assume that, as you say, this provides flexibility.

However, within a free trade agreement, surely it also removes the burden of labelling and provides help with that to allow greater choice, which provides flexibility. I presume that that makes a great free trade deal and that that is one of the negotiations that they had. Weather might also affect the grape variety and the alcohol content.

It also provides more clarity and transparency on the percentage of alcohol, which the lower-alcohol-volume producers have also welcomed. Other varieties can be used to up the consistency of the wine product, but producers on both sides have welcomed that.

Good.

As there are no other questions, we move on to our third agenda item, which is formal consideration of the motion to approve the instrument.

Motion moved,

That the Rural Affairs and Islands Committee recommends that the Alcoholic Beverages, Fruit and Vegetables (Miscellaneous Amendment) (Scotland) Regulations 2023 be approved.—[Mairi Gougeon]

Motion agreed to.

Is the committee content to delegate authority to me to sign off our report on our deliberations on the regulations?

Members indicated agreement.

That completes consideration of the regulations. I thank the minister and her officials for attending.

We will suspend briefly to allow a change in witnesses.

10:11 Meeting suspended.  

10:13 On resuming—