New Government powers to obtain information from companies in the food supply chain

Among the many powers introduced under the Coronavirus Act 2020 are new powers to require the provision of information by companies involved in the food supply chain. The aim of these powers, although not explicitly stated in the statute, is to enable the Government to intervene in the food supply chain should it become necessary. Whether or not these powers are ever used remains to be seen. Everything to date suggests that major actors in the food supply chain, most obviously supermarkets, are working closely with each other and with the Government to ensure that the food supply chain continues to operate as efficiently as possible. Indeed, one of the Government’s first moves at the onset of the crisis was to relax competition rules to allow closer cooperation between supermarkets, including the sharing of distribution infrastructure and stock level information. These powers might therefore be viewed as the Government taking the stance of better safe than sorry: better to have powers that are never used rather than be found to be wanting at a time of national crisis.

As these powers are so new and are completely untested, it is impossible to say how, or even if, they will be used. Until that point, they might best be seen as an emergency resource than a practical necessity. Nevertheless, we set out the information below as an overview.

The relevant legislation is contained in Sections 25-29 under the cross heading ‘Food Supply’.

Definitions

The new power compels ‘a person who is in a food supply chain’, or closely connected to one to provide ‘relevant information’ to an ‘appropriate authority’. The power does not apply to ‘individuals’ (see ‘limitations’ section below).

The power itself is found in subsection 25(1). This is a broad-ranging power to request information, with ‘relevant information’ defined under subsection 25(2) as ‘information about matters which relate to an activity of the person, where the activity is connected with the food supply chain’.

An appropriate authority is defined under subsection 26(1)(a)-(d). For the purposes of England and Wales, these are the Secretary of State in England, or the Welsh Ministers in Wales.

A ‘food supply chain’ is defined under subsection 29(2) as:

A supply chain for providing individuals with items of food or drink for personal consumption, where the items consist of or include, or have been produced to any extent using—

(a) anything grown or otherwise produced in carrying on agriculture, or

(b) anything taken, grown or otherwise produced in carrying on fishing or aquaculture.

The rest of section 29 goes on to give broad ranging definitions for each of these specific terms to ensure that any company linked to the food supply chain is included.

Limitations

Minor safeguards are introduced in subsections 25(4) and (5). Under subsection 25(4), the appropriate authority must consider that the information is necessary to establish whether a food supply chain is being disrupted or is at risk of being disrupted, or what the nature of a real or possible disruption is.

The condition under subsection 25(5) is that a request for information must have already been made and not complied with, either at all, or in a way that it false or materially misleading.

It is worth noting that subsection 25(6) specifies that ‘a requirement may not be imposed on an individual’. This should be probably be interpreted as meaning that a requirement can be imposed on any trading entity (eg, a limited company, or a partnership), but not on individuals.

Subsection 25(7) provides conditions for the form that the request must take. The request must be in writing and specify how the information is to be provided (e.g. what form it should be in) and when it is to be provided (e.g. providing a deadline).

Section 27 imposes a number of conditions for use and sharing of information, which can very generally be summarised as limiting it to safeguarding the food supply chain. The most notable of these are subsections 27(1) and (2), which provide that a person who holds information obtained under section 25:

 (1)…may use it if, and only if, the use is for—

(a) the purpose referred to in section 25(4), where there is a real or possible risk of disruption

(b) the purpose of mitigating or eliminating the effects of disruption to a food supply chain, or

(c) the purpose of preventing or reducing the risk of future disruption to a food supply chain.

(2) A person who holds information which has at any time been provided under section 25 (“the holder”) may disclose it to another person (“the recipient”) if, and only if—

(a) the disclosure is for a purpose specified in subsection (1)(a) to (c),

(b) in a case where the holder is not a government authority, the disclosure is in accordance with the terms on which the information was disclosed to that person, and

(c) in a case where the recipient is not a government authority, the information is anonymised.

Although not explicitly stated, the purpose of these subsections is probably to ensure that first, confidential trading data remains confidential, and second, that no disruption is exploited for commercial gain. For example, although there is an expectation that supermarkets will be sharing information on stock levels, a government authority might be able to make inquiries of Supermarket A if Supermarket B warns that their staffing levels are dangerously low.

Financial penalties

Finally, it is worth noting that Section 28 provides for a financial penalty where someone has failed to comply with a request for information, or has provided information that is false or misleading. Information on financial penalties is contained in Schedule 15 of the Act. A Notice of Intent specifying:

(a) the amount of the proposed financial penalty,

(b) the reasons for proposing to impose the penalty, and

(c) information about the right to make representations

Must first be served on the company. The maximum sum that can be imposed is 1% of the person’s turnover for their most recent complete accounting period.