Piping techniques in decorating cakes and cupcakes.
Breakfast briefing F&D 'waste not want not' October 2019
1. W A S T E R E D U C T I O N I N F O O D A N D
D R I N K S E C T O R : P R A C T I C A L A D V I C E
A N D I N N O V A T I N G S O L U T I O N S
WA S T E N O T WA N T N O T
2. WASTE NOT WANT NOT
Introduction
STEVE ASHWORTH
TAX DIRECTOR
E: STEVE.ASHWORTH@PKF-FRANCISCLARK.CO.UK
T: 0117 403 9800
4. Regulatory context – Gavin Poole, Stephens Scown
Waste in food and drink industry in Cornwall – Dr Olga Andrianova, Tevi
Efficient food waste removal and recycling – Ben May, DCW and Gary Jones, Langage AD
WRAP and other support – Richard Wadman, PKF Francis Clark
Innovation funding – Richard Tyler, PKF Francis Clark
Q&A
MENU
5. WHY TALK ABOUT FOOD WASTE?
• 1.3 billion tonnes of food waste annually globally
• Yet 820 million people did not have enough to eat in
2018
• 10 million tonnes from the UK alone in 2015
• 600,000 tons of plastic waste gets into the
Mediterranean Sea alone every year
• 2.2 million tonnes of plastic being placed on the
market per year
• Food waste in landfill produces methane, which is
25 times more potent than carbon dioxide
• 60% of food packaging is waste, 99% is made from
carbon and is predicted it will account for 13% of all
green house gas emissions by 2050
6. WHAT ARE THE UK GOVERNMENT
AND OTHERS DOING?
• Targets E.g.,
• UN Sustainable Development Goal 12.3 calls for
halving food waste by 2030
• Funding E.g.,
• £15m scheme to help tackle food waste in the UK -
https://www.gov.uk/government/news/cutting-food-waste-game-changing-fund-opens
• Peer Group initiatives E.g.,
• The UK plastics pact, 4 targets and 78 business
members (WRAP)
• Making the business case. E.g.,
• average business able to achieve a 14:1 positive return
on investment (WRAP and The World Resources
Institute)
• Regulation…
7. IT’S NEWS…THE PUBLIC ARE INTERESTED… AND BUSINESSES ARE
TAKING ACTION…
Sainsbury's cuts plastic use further as new figures show supermarkets saved £85m of food
waste in a year (The Telegraph, 24/9/19)
BUDWEISER AND STELLA ARTOIS TO STOP
USING PLASTIC RING PACKAGING FOR CANS
OF BEER
Company aims to eliminate 850 tonnes of plastic a
year (Independent, 23/9/19)
Food recycler forecasts trebled turnover,
(mrw.co.uk 22/10/19)
Hovis working with community to
reduce food waste (Leigh Journal,
21/10/19)
Order supermarkets to publish food waste
data, Tesco boss urges Government
(inews.co.uk, 24/9/19)
Iceland responds to young environmentalist’s
request with sixth plastic reverse vending
machine (Grocer, 21/10/19)
WRAP has revealed that 121 of the
UK's biggest food businesses are
now providing evidence of their
efforts to halve food waste by 2030,
in line with the UN's Sustainable
Development Goals (SDGs).
(edie newsroom, 24/09/19)
8. Date: 28th October 2019
Waste not want not: waste
reduction in the food and drink
sector: carrots, sticks practical
advice and innovating solutions
9. Gavin Poole
Partner
Head of food and drink team
(Cornwall)
Tel: 01872 265123
Email:
g.poole@stephens-scown.co.uk
Web: www.stephens-scown.co.uk
10. • Food law history lesson
• Market forces
• Legislative drivers
• Initiatives
Overview
14. Market forces
• Measurement
• Bad press?
• PhD for all?
• Cost, behaviours and expectations
• Lessons from elsewhere
• Re-locate the problem?
• Environmental legislation and packaging/product
legislation are the factors most commonly identified by
senior executives in the food and drink industry that
threaten growth
16. Key legislative drivers today
• UN Environment and UK and EU environmental legislation
• Packaging and Packaging Waste Directive 1994/62 →
Producer Responsibility Obligations (Packaging Waste)
Regulation 2007
• EU 1935/2004 Contact Materials Regulation → Materials and
Articles in Contact with Food Regulations 2012
• EU 98/2008 Waste Framework Directive → Waste (England
and Wales) Regulations 2011 (amended 2012)
• Single Use Plastics Directive 2019/904
17. Legislative drivers for
tomorrow?
• Exponential Roadmap
• Environment Bill 2019
5 Environmental Principles:
• Policy making
• Preventative action to avert
environmental damage
• Precautionary
• Rectification at source
• Polluter pays
Office for Environmental Protection
• Packaging producer responsibility
• Deposit return scheme
• Consistent recycling collections
• Charges for single use plastics
19. • Food Standards Agency
• Environment Agency
• DEFRA
• UK Government
• Others
• LEAF
• Too Good to Go
• WhyWaste
• WRAP
Campaignsandresources
• Intergovernmental
• United Nations
• Exponential Roadmap
22. The information in this presentation is intended to be general
information only and should not be interpreted as legal advice.
English law is subject to change so whilst Stephens Scown
LLP seeks to ensure the information contained in this
presentation is up to date and accurate, the law can change
quickly and no guarantee is made as to its accuracy which
means the information should not be relied upon. Presentation
slides should not be viewed as an alternative to professional
advice and Stephens Scown LLP does not accept liability for
any action taken or not taken as a result of this information.
24. PKF Francis 3d annual conference for food and drink producers
28 October 2019, Eatery, Falmouth
Dr Olga Andrianova, E-mail: O.Andrianova@exeter.ac.uk
Waste in food and drink industry in
Cornwall: challenges and opportunities
Dr Olga Andrianova
Industrial Impact Fellow /Research Fellow, Tevi
25. PKF Francis 3d annual conference for food and drink producers
28 October 2019, Eatery, Falmouth
Dr Olga Andrianova, E-mail: O.Andrianova@exeter.ac.uk
‘Tevi’ is Cornish for ‘Grow’
Page 25
https://tevi.co.uk/
26. PKF Francis 3d annual conference for food and drink producers
28 October 2019, Eatery, Falmouth
Dr Olga Andrianova, E-mail: O.Andrianova@exeter.ac.uk
Tevi delivery team
• 12 hours of free support to registered
SMEs in the adoption of innovative
technologies and processes
• helping to apply for funding projects
• 6 Challenge Networks up and running
• Sensors, Knowledge Hub and Circular
Economy Tools
Page 26
27. PKF Francis 3d annual conference for food and drink producers
28 October 2019, Eatery, Falmouth
Dr Olga Andrianova, E-mail: O.Andrianova@exeter.ac.uk
What we do
Raw materials Supplier Manufacturer
Customer
Consum
er
Disposal
Logistics
‘Take, make, waste’
Consum
er
Manufacturer
Customer
Used material
Product
Re-manufacture
Return & recycle
Supplier
Raw materials
The circular
economy
• Tevi supports Cornish businesses in going
from a linear to a circular economy
• 180 businesses (SMEs) in Cornwall are on
board (30 food and drinks industry)
Page 27
28. PKF Francis 3d annual conference for food and drink producers
28 October 2019, Eatery, Falmouth
Dr Olga Andrianova, E-mail: O.Andrianova@exeter.ac.uk
Product design: Wasted Apple
Page 28
29. PKF Francis 3d annual conference for food and drink producers
28 October 2019, Eatery, Falmouth
Dr Olga Andrianova, E-mail: O.Andrianova@exeter.ac.uk
Biodegradable cups: Yallah
Page 29
• All coffee bags and takeaway cups are biodegradable,
plus coffee grounds are an organic waste
• Local delivery to local customers, reducing the waste
of cardboard by collecting crates and any of our
biodegradable bags from our customers to dispose of
them properly at the roastery
• Use the waste product from roasting coffee (chaff) as
fuel for the biomass boiler
30. PKF Francis 3d annual conference for food and drink producers
28 October 2019, Eatery, Falmouth
Dr Olga Andrianova, E-mail: O.Andrianova@exeter.ac.uk
31. PKF Francis 3d annual conference for food and drink producers
28 October 2019, Eatery, Falmouth
Dr Olga Andrianova, E-mail: O.Andrianova@exeter.ac.uk
Cornwall’s food and drink industry
Page 31
32. PKF Francis 3d annual conference for food and drink producers
28 October 2019, Eatery, Falmouth
Dr Olga Andrianova, E-mail: O.Andrianova@exeter.ac.uk
Waste in food and drink industry
• “Food waste is any food, and inedible parts of food, removed from
the food supply chain to be recovered or disposed (including
composted, crops ploughed in/not harvested, anaerobic digestion,
bio-energy production, co-generation, incineration, disposal to
sewer, landfill or discarded to sea)”.
EU FUSION EU28
Page 32
33. PKF Francis 3d annual conference for food and drink producers
28 October 2019, Eatery, Falmouth
Dr Olga Andrianova, E-mail: O.Andrianova@exeter.ac.uk
Waste in food and drink industry
Page 33
34. PKF Francis 3d annual conference for food and drink producers
28 October 2019, Eatery, Falmouth
Dr Olga Andrianova, E-mail: O.Andrianova@exeter.ac.uk
Challenges & Opportunities
Page 34
Challenges
• Difficulty around waste collection
• Lack of network for waste sharing
• Difficulty to assess and co-design solutions
• High costs of secondary products and raw materials
Opportunities
• Proper collection methods
• Waste sharing
• More education
35. PKF Francis 3d annual conference for food and drink producers
28 October 2019, Eatery, Falmouth
Dr Olga Andrianova, E-mail: O.Andrianova@exeter.ac.uk
Page 35
36. Efficient food waste removal
and recycling
Ben May, DCW and Gary Jones, Langage AD
37. Langage AD Biogas
Presentation to: PKF Francis Clark
Date: 26th Nov 2019
Presentation by: Gary Jones: Technical Director
Ben Phillips DCW
Close
the loop
38. History
• 400 acre dairy Devon champions for products.
• Idea in 2008.
• Decided on technology 2009. Fitec.
• Opened doors for fist load March 2011.
• Never rejected a load due to a breakdown.
• Carbohydrate
Close
the loop
40. Where's the money coming from?
• Gate fee average = X (generally going down)
• Tonnage availability. (generally going down as plant
numbers rise)
• CHP, gas to grid, (% uptime and efficiency so important)
• FIT’s ROC’s RHI = X
• Digestate sales = X
• Protein
Close
the loop
41. Potential for loosing money
• Down time due to poor design. (cant get time back)
• Grit. (Increase running cost and maintenance.)
• Floating layers and separated material.
plastics. (High disposal costs)
• Digestate. Poor quality or too much. (bad design.)
• Feed stock volumes dropping with better public
awareness (wrap reduction in household waste
42. Design changes to increase
efficiency and match changing
landscape.
• Bigger digesters. (retention time)
• Piston presses instead of grinders or
choppers. (reduced running costs)
• Plastic filtration.
• Increase staff training and capabilities.
• Propionic acid
46. OTHER INITIATIVES
Tevi
UK industrial strategy challenge fund/ UK
research & innovation
Transforming food production challenge
£90 million of funding is available
Smart sustainable plastic packaging challenge
https://www.ukri.org/funding/funding-
opportunities/
Transforming the UK food system for healthy
people and a healthy environment call
Agri-Tech Cornwall
R&D tax credits
47. FUNDING INNOVATION
Tax relief for expenditure on research and development
RICHARD TYLER
SENIOR TAX MANAGER
E: RICHARD.TYLER@PKF-FRANCISCLARK.CO.UK
T: 01752 981110
48. OVERVIEW
Why make a claim for R&D tax relief?
What is R&D for tax purposes?
Some success stories…
Can you claim?
49. WHY MAKE A CLAIM FOR R&D TAX RELIEF
Loss making SME Profitable SME Profitable large
company
Qualifying R&D expenditure 100,000 100,000 100,000
50. WHY MAKE A CLAIM FOR R&D TAX RELIEF
Loss making SME Profitable SME Profitable large
company
Qualifying R&D expenditure 100,000 100,000 100,000
Additional deduction against profits under
SME R&D tax relief scheme
130,000
Total R&D expenditure allowable for tax 230,000
51. WHY MAKE A CLAIM FOR R&D TAX RELIEF
Loss making SME Profitable SME Profitable large
company
Qualifying R&D expenditure 100,000 100,000 100,000
Additional deduction against profits under
SME R&D tax relief scheme
130,000
Total R&D expenditure allowable for tax 230,000
Repayable tax credit @14.5% 33,350
52. WHY MAKE A CLAIM FOR R&D TAX RELIEF
Loss making SME Profitable SME Profitable large
company
Qualifying R&D expenditure 100,000 100,000 100,000
Additional deduction against profits under
SME R&D tax relief scheme
130,000 130,000
Total R&D expenditure allowable for tax 230,000 230,000
Repayable tax credit @14.5% 33,350
53. WHY MAKE A CLAIM FOR R&D TAX RELIEF
Loss making SME Profitable SME Profitable large
company
Qualifying R&D expenditure 100,000 100,000 100,000
Additional deduction against profits under
SME R&D tax relief scheme
130,000 130,000
Total R&D expenditure allowable for tax 230,000 230,000
Repayable tax credit @14.5% 33,350
Tax saving as a result of additional
qualifying expenditure
24,700
54. WHY MAKE A CLAIM FOR R&D TAX RELIEF
Loss making SME Profitable SME Profitable large
company
Qualifying R&D expenditure 100,000 100,000 100,000
Additional deduction against profits under
SME R&D tax relief scheme
130,000 130,000 n/a
Total R&D expenditure allowable for tax 230,000 230,000 n/a
Repayable tax credit @14.5%/ RDEC
@12%
33,350 12,000
Tax saving as a result of additional
qualifying expenditure
24,700
55. WHY MAKE A CLAIM FOR R&D TAX RELIEF
Loss making SME Profitable SME Profitable large
company
Qualifying R&D expenditure 100,000 100,000 100,000
Additional deduction against profits under
SME R&D tax relief scheme
130,000 130,000 n/a
Total R&D expenditure allowable for tax 230,000 230,000 n/a
Tax credit @14.5%/ RDEC @12% 33,350 12,000
Tax saving as a result of additional
qualifying expenditure
24,700
Net tax saving as a result of RDEC claim 9,720
Effective tax saving on initial expenditure 33.35% 43.70% 9.72%
56. WHAT IS R&D FOR TAX PURPOSES
According to HMRC research and development takes place when a project seeks to achieve
1. an advance in science or technology
2. through the resolution of scientific or technological uncertainty
57. WHAT IS R&D FOR TAX PURPOSES
Create a process, material, device, product or service which incorporates
or represents an increase in overall knowledge or capability in a field of
science or technology
Make an appreciable improvement to an existing process, material,
device, product or service through scientific or technological change
Use science or technology to duplicate an existing process, material
device, product or service in a new or appreciably improved way
Key questions:
What is the advance being sought?
What uncertainties were encountered?
58. R&D SUCCESSES IN THE FOOD & DRINK SECTOR
Dairy processing
Advance in knowledge sought:
Process innovations to reduce waste and improve efficiency of production.
Research into on-farm causes of variations in raw materials.
Key uncertainties:
Uncertainty over whether the changes were technologically feasible.
No published research on the causes of the variations
Tax savings - £40,000 over 3 years
59. R&D SUCCESSES IN THE FOOD & DRINK SECTOR
Food manufacturing
Advance in knowledge sought:
Creating a new version of an existing product with a different flavour
Key uncertainties:
How to maintain the product’s traditional texture and consistency
Overcoming production problems due to use of new ingredients
Tax savings >£130,000 over three years
60. R&D SUCCESSES IN THE FOOD & DRINK SECTOR
Snack manufacturing
Advance in knowledge sought:
Doubling the shelf life of packaged snacks
Key uncertainties:
Identifying key factors affecting shelf life and measuring impact
Feasibility of producing raw materials incorporating changes to these key factors
Tax savings - £38,000 over 2 years
61. CAN YOU MAKE A CLAIM?
Are you an innovative company?
Do you use technology to improve your products or processes?
Failure is not a barrier to making a claim!
A claim may still possible even if the R&D is grant funded, or if you are undertaking R&D for a
customer.
You have up to two years for the end of the accounting period in which the qualifying costs
were incurred in which to make a claim via the company’s corporation tax return.
62. WASTE NOT WANT NOT
Wrap up
STEVE ASHWORTH
TAX DIRECTOR
E: STEVE.ASHWORTH@PKF-FRANCISCLARK.CO.UK
T: 0117 403 9800
64. Future breakfasts – 1st Tuesday of the month
• Family Business Connect
• “Till death do us part (or maybe earlier)”
• Green business, Block chain etc.
Future breakfasts – Sector specific / one off
• Food and Drink – September / October 2020
Next up for breakfast events
And do not forget our blog and soon to be published F&D newsletter,
which contains details of new funds/ sources of SME funding and
other information that comes to our attention that we think may be of
interest.
65. AND… ( AS
R E Q U E S T E D )
“A recent survey has shown
that a lot of businesses have
not even considered the
implications of Brexit. So we
just want to remind people to
check the www.gov.uk/brexit
website.”
66. FOOD AND DRINK
TEAM
As accountants and business advisers to over 200
clients in the Food & Drink sector across the South
West, PKF Francis Clark are well placed to help
you achieve your business ambitions. We have a
clear understanding of the challenges the sector
faces and are able to offer robust commercial
support and guidance. We get to know you and
your business and we match your needs to our
wide-ranging experience. We combine
accountancy, audit and taxation compliance
services with tailored strategic advice to help you
identify and reach your goals
www.pkf-francisclark.co.uk/sectors/food-drink/