Food and Drink

Top tips for food partnerships
21 August, 2017

Here’s our top tips if you’re operating your food business in a partnership. Partnership text

Many farmers or others involved in food businesses trade together in partnership.  This can be an efficient and flexible way of running a business when it works well, but all too often people get on with running their business, without giving much thought to what being in a partnership actually means. 

What is a partnership?

Firstly, it’s important to consider whether or not you’re in a partnership.  A partnership is a collection of individuals carrying on a business in common with a view to making a profit.  It isn’t essential that the business actually makes a profit, but this must be the desire or intention.  Taking the example of two brothers who are arable farmers, who own two fields that were passed to them following their father’s death and who buy their raw materials together and sell their crops to the same buyer – they are almost certainly trading as a business partnership. 

What does this mean?

Unless you’ve agreed otherwise, the terms set out in the Partnership Act 1890 (the Act) apply to partnerships.  It’s best practice to have a written partnership agreement setting out how the business should be run and how any disputes should be resolved.  

Things to think about and try to agree if you’re in a partnership

  1.  How are the assets / proceeds divided?

    It seems simple, but often the partners in a business have a different view as to what they believe is their personal asset and what belongs to the partnership.  In the above example, is the farmland a partnership asset?  What about if one of the brothers buys a new tractor?

  1.  Succession / family planning

    What will happen if one of the partners dies?  Under the Act, the partnership would be dissolved and farmland / buildings that have been in the family for generations could end up being sold.

  1.  Can my children take over my interest in the business?

    Unless all the other partners agree, you can’t retire from a partnership and appoint your children in your place.  The default position under the Act is that the original partnership would be dissolved and it’s important to consider and agree on how the partnership should change over time.

  1.  What if there is a disagreement?

    The fallout from any disagreements, especially within a family business can be catastrophic.  Having an agreed process of resolving any disagreement can help keep the business going (and money coming in) when a dispute arises.

What should I do next?

Even if you think your partnership is working well, it’s sensible for all the partners to sit down and consider how the business should be run.  Planning for the future can help avoid any potential disputes and keep the business going for generations to come.  For further advice on your partnership or if you have a partnership dispute please contact Tom Bourne on 01892 506099 or tom.bourne@cripps.co.uk.


Review your supply chain – slavery and human trafficking are ‘far more prevalent than previously thought’
11 August, 2017

Companies in the food & drink sector need to be aware of their obligations under the Modern Slavery Act 2015 (MSA) – do you?

The MSA came into force on 29 October 2015 and was designed to fight against slavery and human trafficking.  

On 10 August 2017 the National Crime Agency (NCA) released figures that suggest that modern slavery and human trafficking is being carried out on a far greater scale than previously understood.

The NCA commented that: ‘The intelligence we are gaining is showing that there are likely to be far more victims out there, and the numbers of victims in the UK has been underestimated.’

Law enforcement steps up response to modern slavery

Many areas of the food & drink industry rely on lower paid and lower skilled/qualified workers – such as seasonal fruit picking and kitchen support staff.

Unfortunately, less scrupulous employers seek to take advantage of vulnerable individuals looking for work and gainful employment.  As a result, the food & drink sector is high up on the authorities’ watch list.

2017 National Minimum Wage and National Living Wage

Under the MSA certain businesses (please see the link below) are required  to review their supply chains and evidence the steps they have taken to ensure that none of their business or supply chain is tainted by modern slavery or human trafficking.

Part of a supply chain? The Modern Slavery Act 2015 could impact you

The direct scope of section 54 of the MSA tends to only cover large businesses operating towards the top of a supply chain. However, as expected, several of our small to medium sized clients that operate at different levels of a supply chain have been required by their customers to evidence the action they have taken to prevent slavery and human trafficking in their own structure – this has included anti-slavery policies and accepting anti-slavery clauses in their commercial agreements.

In short, with extra media coverage, comes additional scrutiny. The result could well be that businesses covered by section 54 of the MSA start asking members of their supply chains to confirm they too have established anti-slavery processes.

If you want to retain your customer relationships, and you haven’t done so already, now could be a good time to ensure you have (and can substantiate) good anti-slavery practices in place.


Regulating our future
25 July, 2017

Since February 2016, the Food Standards Agency (FSA) has been consulting with consumers, food businesses and other parts of local and national government, and food regulators in other countries, to develop its approach and improve the way it delivers regulatory controls in food.  It has now published its plans to change food regulation in England, Wales and Northern Ireland.  This is paper is not about changing regulations but about improving delivery of controls across the food chain. 

The FSA recognise that leaving the EU will have a significant impact on the food and drink sector creating an increased need for a “flexible and responsive regulatory system.”  The FSA consider the existing approach to regulating the food industry to be “outdated and becoming increasingly unsustainable.”  The following are some of the changes the FSA proposes to achieve its vision of a “modern, risk-based, proportionate, robust and resilient system.”

  • An enhanced system of registration for businesses so that risk across the food chain can be better identified and managed by the FSA;
  • Segmenting businesses in a better way using a range of risk indicators based on wider information about the business, including the information gathered at the point of registration and from other sources;
  • The FSA want to be confident that businesses are doing the right thing and will introduce more options for how they prove it. The FSA will set the frequency and type of inspection activity the business will face. Businesses with a good history of compliance will face a lower burden from regulation, and free up local authority resources to target the businesses that present the greatest risk to public health;
  • The FSA remain committed to its Food Hygiene Rating Scheme and will ensure the scheme is sustainable and display becomes mandatory in England as it is in Wales and Northern Ireland.

The “FSA will set standards so that all food businesses of all types understand what is required of them”.  They will provide clarity to “avoid duplication or mixed messages to food businesses about what constitutes good levels of compliance with standards.”

The paper, ‘Regulating Our Future – Why food regulation needs to change and how we are going to do it’ can be read in full here  https://www.food.gov.uk/sites/default/files/rof-paper-july2017.pdf


“Order and Pay” apps – consider all the angles
30 June, 2017

The new order and pay app introduced by JD Wetherspoons in the spring offers an exciting new technological advance for food and drink retailers.  Reducing the amount of time customers spend queueing should allow them time to consume more and could help reduce staff costs (although the drinks and food still need to be brought to the customer’s table).  Driving consumers to your app also provides marketing opportunities and should help increase brand loyalty.  Fans of the new tech have pointed out the usefulness of being able to see all the nutritional and other data and even tasting notes for the drink you are considering before you buy it.

Whilst some commentators have raised concerns about decreasing human interaction, and that we will see the end of the “traditional pub”, it may be that the app will mostly be used when the pub is busy, at which times interaction with bar staff would be more limited anyway and staff may have more of an opportunity to talk to customers at their tables.  Bar staff will also need guidance on deciding which customers to serve first where orders come in via the app and in person at the bar at the same time.   If the pub is crowded then the speed advantage may become less obvious if the bar staff are having to regularly cross the room to deliver drinks. It seems unlikely that service at the bar will disappear completely.

Some more canny observers have also noted the potential for getting people not in the pub with you to buy your drinks using the app.  However, there are two particular considerations for pubs and other outlets offering the opportunity to order alcohol in this way: age verification and rules surrounding serving intoxicated customers.  Bars will still need to ensure they are not inadvertently supplying alcohol to under 18s (restrictions within the app and age checking at the table will still be needed) and licensees will need to have an eye on those being bought drinks to check their behaviour and ensure they are not being served when drunk.  Dealing with refunds in this situation may also be more challenging if the bill payer is not present.

In order to make the most of the opportunities presented by the new technology, premises just need to ensure that they think through all the angles and still comply with the old rules.


What can Gordon Ramsay teach us about Brexit?
23 June, 2017

We don’t know what Mr Ramsay is doing to mitigate the risk of Brexit, but we can tell you about his business Gordon Ramsay Holdings Limited. 

According to its accounts filed with Companies House last month, the company has recruited a buying team to help mitigate increasing food costs and fluctuations in the value of the pound.  The centralised buying team will do so by negotiating contracts with suppliers over the whole restaurant group, rather than on a restaurant by restaurant basis – a sensible step for any business to benefit from economies of scale.  The company also expresses concerns over its ability to recruit staff and the economy as a whole.  It doesn’t publish any answers to these issues, but the group is now on the right track returning to profit after the net loss it made last year.

This squeeze on food prices from restaurants, supermarkets and other retailers is one of the reasons why confidence levels among British farmers has plummeted (as measured by the National Farmers’ Union).  According to their survey one in five farmers said they were reducing investment, with only one in ten saying that they were planning to increase investment.  This is interesting because farmers were held out as one of the key supporters of leaving the EU prior to the referendum and their confidence will affect other areas, which are dependent on growth and investment in this sector.