MANAGING REGULATORY AND COMPLIANCE CHALLENGES IN THE FOOD INDUSTRY
R&C: How would you describe the regulatory and compliance challenges currently facing businesses in the food industry? How have their risks and obligations changed in recent years?
Küster: From my perspective, the food industry is facing various regulatory and compliance challenges related to the composition of food and the marketing of food and traceability, from the sourcing of ingredients up to the consumer. For example, food trends like vegan, vegetarian and organic require new regulations to guarantee a fair level playing field for all food producers and to prevent consumers from being misled. Furthermore, regulations around front of pack labelling or country of origin increase transparency around food products. Among other things, communication restrictions for special food products, like baby food or food for special medical purposes, have recently been tightened in the EU and place new obligations on producers.
Foley: A primary compliance challenge in the food industry is the pace at which regulatory change occurs, whether it is privacy or data breaches and governance, recalls or the varying approach between local, federal and international regulators that requires in-house compliance professionals to be versed in regulations specific to all the locations in which a company operates. In addition, the number of consumers seeking transparency with respect to a company’s sourcing and supply chain activities has increased significantly. In part and as a result, this requirement to address consumers’ evolving needs and expectations heightened the focus on corporate reputation, specifically on how the work is done and what compliance principles and expectations are in place for employees and a company’s business partners. Finally, given the slow organic growth and stakeholder pressures for companies to increase value, consolidation within the food industry is occurring at a rapid pace.
Jul-Sep 2018 Issue
Deloitte Risk and Financial Advisory
The Hershey Company