The European Food Summit Brussels, 11-12 April 2002

The EU Food and Drink Industry: An Industry that Cares
by Peter Brabeck-Letmathe
Chief Executive Officer, Nestlé
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Ladies and Gentlemen,

I have the privilege to address this distinguished audience at the end of a fascinating morning session, starting with Commissioner Fischler's outlook in the future European quality driven agriculture policy, based on production methods which favour environmental protection and more efficient use of natural resources. Commissioner David Byrne's presentation exposed the Commission's answer to the consumer's ongoing concerns about wholesome and safe foods.

The work accomplished in this field over the last two years by developing general principles and requirements of food law and establishing the European Food Safety Authority is impressive and presents an excellent base for winning back consumer confidence. My colleague Roger Deromedi brought in a highly competent view on food quality and consumer confidence from a global company with American roots. Bringing in Nestlé's perspective on an "industry that cares" I have the privilege to speak in the name of a truly global food and drinks manufacturer, created 135 years ago in Switzerland. With 34 Billion CHF sales generated in Europe out of globally 85 Billion CHF, Nestlé still remains deeply rooted in the European human and business culture.

The successful completion of the European single market including its imminent extension to the Central European countries, is an essential contribution towards a borderless global economy. As a company we fully share the Commission's priority of implementing a sustainable development strategy aiming at stable economic growth and higher employment coupled with environmental protection in the Union and internationally. The promotion of a new, more efficient European governance is essential in view of the advanced enlargement negotiations.

On the other hand, I would like to make it very clear to this audience: not all global economic challenges and confrontations can be solved from the sole perspective of the old continent. We are all aiming at a more peaceful development of the world economy at the beginning of this new Millennium. If we really want to give the emerging markets a fair share of the wealth to create, Europe will have to overcome a few prejudices and renounce on some privileges. Not the least in the area of agricultural raw materials. By the way, the objective of sustainable development will have to be implemented globally and cannot become a privilege of the rich countries.

This European Food Summit has been placed under the banner of "Quality for a Confident Consumer". This is highly appropriate, but let's not forget that only a minority of the world population has the luxury to focus their interest on continuously perfecting the already high quality supply of food and drink. The vast majority is confronted day by day with the problem of satisfying their hunger. Nestlé, as a company operating in all countries of this world, has to take this into account and deliver nourishing and safe food at affordable prices Whenever, Wherever and However. To be very clear, Nestlé applies global rules on quality and safety, no matter where the product is processed and marketed. This statement is certainly valid for all major international food companies.

By the way, this global behaviour is an active contribution of the international food companies to introduce high quality standards to emerging and developing markets. If tremendous progress has been made in food safety since 1989 in Central and Eastern Europe, bringing these countries nearer to the acquis communautaire, it is mainly due to the privatisation process and the consequent application of international quality standards in hundreds of formerly state-owned companies. International food companies have trained large numbers of local specialists in quality assurance systems and development of agricultural knowledge. As a company processing large quantities of fresh milk, Nestlé could contribute to diminish dramatically antibiotic residues in fresh milk. The same goes for nitrate contamination in other raw materials. The introduction of the HACCP systems makes quick progress in these countries and will further improve with the approaching date of the access to the EU.

Coming back to Western Europe, and reflecting on a period of intensive public discussion and media exposure to food quality issues, our industry as well as all the other participants in the food chain, had to learn some lessons which I would like to sum up as follows:

Firstly, food quality starts with the raw material and, in the case of live-stock, with feed, and ends on the fork of the consumer. It is not enough if one of the operators in the food chain works up to the highest quality standards if the suppliers up front or the clients downstream don't act accordingly. The full visibility and traceability of all ingredients entering the food products have become a must. The general requirements of the Food Law elaborated by the Commission for Health and Consumer Protection, reflect comprehensively this fact and stresses the need for close cooperation along the food chain.

Secondly, food safety is of increasing concern to the consumer. Non-governmental organisations, the Media and political parties reflect this in a partial and biased way. As an industry, we will have to live with this reality. The best way to deal with it is to play with open cards. As an industry we don't have to hide anything, so let's explain to our stakeholders what we are doing and why we are doing it, and never hesitate to admit immediately an error in quality relevant to safety if it occurs. In my company, we would not accept anyone voluntarily holding back an information relevant to product safety. We monitor closely all incidents relevant to product quality standards and regulatory compliance. In the 468 factories Nestlé is running in 84 countries in the world, we counted last year 48 quality incidents with costs above 100.000 CHF. In most cases the incident was discovered and disclosed while products were still under our direct control. In some cases we had to use geographically limited public recall. The number of incidents is decreasing but zero fault is impossible, so whenever anything happens, we act as responsible citizens. We have learnt that consumers are accepting the fact that in rare cases an incident might happen. What they rightly will not accept is if a food company tries to sweep it under the carpet.

Thirdly, one of the fundamental problems in Europe is the diverging scientific opinions issued by a multitude of bodies in the member states, underlined by national differences in principles and procedures governing the food laws. The lack of a European authority certainly contributed to the mess we went through with regard to the BSE, Dioxine, Foot and Mouth. We are confident that the creation of the Food Safety Authority will contribute to ease the national zeal and promote identical risk assessments. The issue of the British beef still refused entrance to France, should be the last outburst of nationalistic egoism. In the same vein, the endless discussion on opening the European market to GMO field trials by diverse scientific opinions and political constellations in member states, led to total blockage of this dossier. We all present here are hopeful that the EFSA will get the political support from the member states necessary to take a strong lead in this area. Diverging scientific opinions have proven to be one of the main obstacles in progressing food safety issues in a reasonable time span. Too much energy has had to be spent to overcome some real errors, misbehaviours of individual black sheep and to eradicate misunderstandings and unjustified attacks on our industry. Exponents of Green parties closely linked to organisations like Greenpeace, have developed efforts to discredit an industry which feeds daily in Europe a population of 250 Mio with safe and good food. As an industry it is of no use to complain, on the contrary. We have to act with self-confidence and explain to the public, without complacency, what we do and what we stand for and where further progress has to be made. This way we will recreate our image as reliable and caring partners. This effort has to be delivered in close links with our partners up- and down-stream in the food chain.Let me address a last issue which understandably will provoke controversial reactions.

The new European Food Law is rightly based on a very high level of health protection. It is also clearly stated that decisions on safety and health protection should be scientifically based and by this guaranteeing that unsafe food is not placed on the market. So far, so good. On the other hand, this sound principle for protecting consumers can be harmfully weakened by an extensive use of the so-called "precautionary principle". The precautionary principle should provide a mechanism for determining risk management measures but it carries the inherent risk of non-scientifically based hindrance of scientific progress. The history of food processing up to today's level is a long success story of technological and scientific innovation. If we want to proceed in this direction - by the way a condition if we want to nourish the world population of tomorrow - politics and the regulatory network should not obstruct or prohibit technological innovation by invoking the precautionary principle. If precautionary principles would have been applied in aviation, as one example, we would never have had a commercial plane in the air. The fear of the new is part of human nature and has to be taken into account in our decisions but should not prevent courageous steps in the future. The precautionary principle extensively applied in Europe has and will result in science transfer to other parts of this world with all the economic consequences. Europe had been in the forefront of innovation also in our industry . Politicians are well advised in the application of the Food Law to make use of precautionary principles in a very restrictive way.

Ladies and Gentlemen -
the food industry is an industry that cares. Every day we are placing our products to the judgement of the consumer. The cash register is the ballot box for our products. A sound regulatory frame-work and an immense effort in control measures offer today to the consumer a high guarantee of quality. Quality in terms of safety, nutritional value, diversity and taste. Our industry merits the consumer's confidence by granting maximum transparency and knowledge of what we are doing. The consumer's right to choose based on knowledge is fundamental and undisputed. For my part, I am confident that our industry will continue to fulfil its noble role of bringing good food, good drinks and daily enjoyment to the European population.

This is an outline of the speech content; only the spoken word counts.