Retail & CPG: Legislations & Regulations to Watch in 2023
How is new legislation affecting retail & CPG sectors? Which incoming regulations do organizations need to be aware of? And how can retail and CPG businesses prepare for changing legislation in a way that enables them to see change as an opportunity, not a threat?
For any CPG, retail or food and beverage business, the list of recent or incoming legislation is long and, on the face of it, arduous. From supply chain sustainability to the use of AI and issues of identity and productivity, the challenge for organizations is not just understanding their mandatory requirements, but understanding the risks as well as the opportunities, providing a solid foundation from which companies can work.
Key Regulations to Watch
For any organization, legal compliance is a matter of implementing existing mandatory requirements while staying abreast of a raft of incoming legislation set to place further responsibilities on the CPG and retail sectors. You can find a list of the key regulations (together with links to the relevant legislation) in our downloadable PDF, but here are some of the ones to watch right now:
- FCA Consumer Duty (UK only): Following a period of uncertainty due to the pandemic and financial disruption, the FCA Consumer Duty is designed to protect consumers from improper and misleading business practices. Retail and CPG companies must ensure that their products and services meet safety standards and disclose any potential risks. The Duty supports each of the following outcomes: fair value (consumers receive fair prices and quality), suitability and treatment (consumers receive suitable products and services and are treated well), confidence (consumers have strong confidence and levels of participation in markets) and access (diverse consumer needs are met).
- EU Single Use Plastics Directive: Unless you’ve been living under a rock, you’ll know the risk to brand reputation for any company not engaging in managing the impacts of plastics (and particularly plastic packaging) on the environment. The Directive requires EU countries to take measures to reduce the consumption and use of a series of single-use plastics at EU level, including an EU-wide ban on certain single-use plastic products. As of July 3, 2021, single-use plastic plates, cutlery, straws, balloon sticks and cotton buds cannot be placed on the markets of the EU Member States. The same measure applies to cups, food and beverage containers made of expanded polystyrene, and all products made of oxo-degradable plastic. Some EU member states, like Spain and Italy, have introduced punitive tax laws for companies failing to comply with the requirements.
- Corporate Sustainability Reporting Directive (CSRD): Designed to increase the consistency of corporate sustainability reporting, the CSRD effectively places sustainability reporting on the same footing as financial accounting, with all corporations based in the EU (or with subsidiaries in the EU) accountable for providing formal ESG reports. Inevitably, this increases cost and burden on business. The new rules will ensure that investors and other stakeholders have access to the information they need to assess investment risks arising from climate change and other sustainability issues. They will also create a culture of transparency about the impact of companies on people and the environment. Finally, reporting costs will be reduced for companies over the medium- to long-term by harmonizing the information to be provided.
- Customs and excise: The recently enacted EU Single Window Regulation for Customs delivers a timeline for the streamlining of C&E. The implementation of the EU Single Window Environment for Customs will be phased in gradually over the coming decade. The first phase will come into effect by 2025 and will focus on enhancing intergovernmental exchanges at EU borders. A second phase, planned for 2031, will provide a business-to-government scheme to simplify clearance processes for economic operators when moving goods in and out of the EU. The UK Government is currently in consultation regarding its introduction of a UK Single Trade Window, while other countries have already implemented (China, Japan, Singapore) or introduced their own single window systems. India’s Ministry of Commerce and Industry, for instance, performed a soft launch of its broader single window platform in 2021 to simplify trade with the country.