Whilst the Government is trying to arrest this decline, the Portas Review, which aims to identify what the Government, local authorities and businesses can do to promote the development of more prosperous and diverse high streets, is only just underway and a resurgence in the high street may be some way off.

However, whilst traditional retail suffers, online shopping is booming in the UK.

According to recent statistics published by the Organisation for Economic Co-operation and Development (OECD), the UK has a higher proportion of adults who shop online than any other OECD country. The statistics revealed that 60 per cent of UK adults bought something online in 2011 – twice the average of the OECD’s 34 member states, which include the US, Germany, Australia and France. And UK consumers are spending a lot of money online too: according to the Interactive Media in Retail Group (IMRG), the UK spent £68.2bn on the internet in 2011, which is equivalent to £2,180 for every adult in the country.

And this is not an isolated statistic.

The latest figures from the IMRG Capgemini e-Retail Sales Index reveal that shoppers in the UK spent a total of £6bn online during January 2012, equivalent to £118 per person, reflecting a year-on-year growth of 16 per cent.

When compared with the high-street and wider retail sector, online retail is not just proving resilient in the economic gloom, but is positively flourishing.

An article in the Financial Times this week looked at how manufacturers of household and personal goods in the UK and US are hoping to expand their online presence and are now looking at ways to use social media to target customers. Whilst some companies, such as Heinz, Thorntons and Asos, are already marketing or selling items through their Facebook pages, Reckitt Benckiser has just launched a washing-up liquid product which is exclusively sold on Facebook.

There is no doubt that the use of Facebook can help to develop the retailer-customer relationship; by doing so, it could be argued that retailers’ desire to make the shopping experience more personal is a return to the ‘good old days’ when local shopkeepers in the high street butcher’s or baker’s shop knew their customers by name.

Are we going back to the future?

1. the oral agreement had been breached when Graham sought to exploit the sauce for his own commercial gain; or, alternatively
2. the information given to Graham when Bailey demonstrated the recipe to him attracted a duty of confidence which had been breached when Graham commercialised the sauce.

Graham argued that he had arrived at the recipe through his own hard work and experimentation, and that the claims were an attempt to take advantage of his commercial success when marketing the sauce.

The High Court ruled that there was no breach of contract and no breach of a duty of confidence on the grounds that:

-          the evidence established that Graham had developed the source himself and that there had been no agreement between the parties. The agreement that Bailey and Williams alleged existed made no sense as there was no reason for Bailey to enter into such an agreement to reveal his secret recipe in order for Graham to take it to market. The burden of proof was on Bailey and Williams to prove that the agreement existed – they had failed to do so and therefore no breach of contract was possible; and

-          Bailey had failed to prove that the sauce recipe had been imparted to Graham in circumstances that gave rise to a duty of confidence. In any case, the recipe that was the subject of Bailey’s claim was not sufficiently certain to have a duty of confidentiality attached to it.

The dragons’ investment was well protected and just as well that Graham did not need to face their fire…

The IPO ruled that:

• the application represented the mark clearly and distinctively in line with the requirements of the Trade Marks Act; and

• any claim in relation to bad faith was made on the basis that Cadbury did not intend to use the colour on the whole of its packaging; given that Cadbury would at least have to have its product name on the packaging, this could not be considered bad faith – rather, the cause was legal and commercial reality.

China is an important growth market for the UK, with its worldwide food and drink imports having continued in a positive trend in July to just under £5bn, up from £4.4bn in June. With 2010 figures for UK food and drink exports to China up 28.5% on 2009 figures, manufacturers are increasingly looking at opportunities in this market.

In a joint initiative with the Food & Drink Exporters Association (FDEA) and UK Trade & Investment (UKTI), FDF’s support will ensure companies benefit from an enhanced and strongly branded UK presence at the show; a specially organised trade development visit for non-exhibiting companies to give them a taste of the market; and a meet the buyer initiative enabling companies to meet key customers from the retail and food service sectors.

Charlotte Lawson, Director of Member Services at FDF, said, “The UK manufactures many of the world’s best loved food and drink brands, and demand for our products abroad continues to grow. China, with its growing middle class, has turned from an export country to an import destination. As a growth market for the UK, China cannot be ignored.

“Working with FDEA and UKTI, FDF wants to help UK food and drink manufacturers take the Chinese market by storm by significantly enhancing the UK presence at the FHC exhibition in Shanghai. We aim to support Britain in her endeavour to double trade with China by 2015 to some 62 billion pounds, by supporting business building initiatives which enable UK food and drink manufacturers to gain access to this market.”

So, the message from the FDF seems clear – the Eastern markets are full of promise – maybe we have heard that said somewhere before? Let’s hope UK businesses can achieve something great in these troubled times.

• mandatory key nutritional information and where it needs to be placed on packaging;
• allergen information on particular products;
• mandatory font sizes;
• increased requirements for information relating to country of origin; and
• increased information requirements for distance selling, such as food sold online.

The regulation is expected to come into force in autumn 2011.

The ASA gave two reasons for the ruling:

1. The adverts should have made clear to consumers how they could verify the claims made.
2. The adverts were considered to be misleading as they did not accurately reflect market research on which they were based.

The importance of this ruling is that an advertiser must take care in what information is contained in a comparative advertisement. In order to comply with the CAP Code, an advertiser must enable a consumer to be able to verify the basis of the comparative claims made in the advert. This can be contained in the small print, but must actually be able to guide a consumer to see the data on which the comparison is made so that they can verify the advert personally.

The CAP Code is a code of practice governing the content of adverts and marketing communications, and it is administered by the ASA. Although the Code does not have legal force, it is best practice to comply with it, as failure to do so can result in bad publicity and ultimately an inability to obtain advertising space.

Some would argue, however, that most consumers in the EU do not pontificate in the supermarket aisle and read the label word by word, before popping a product in the trolley or basket. Those consumers are finding it tough in these austerity times and do not really care where the food comes from or how much mono-sodium glutamate it contains. What really drives what food they buy is down to one key ingredient – price. And as we all know, with the huge increases in commodity prices (particularly the oil price) food prices in the EU have gone up a long way in the last few years. Sorry EU, but the consumer’s main concern is, and probably always will be, price – and the cheaper the better. In any event, here in the UK we are much better than some of our EU partners at providing nutritional information on labelling. As the UK’s Food and Drinks Federation (“FDF”) has pointed out in a response to the EU Food Information Proposal. Terry Jones, Director of Communications at the FDF, said:

“The UK food manufacturing sector is well ahead of other EU states on labelling, and we are pleased with the outcome of MEP’s votes on some aspects of the proposal, namely: nutrition labelling, the exemptions granted for small packs and some aspects of the broader approach on legibility – despite moves to introduce a mandatory minimum font size.”

Terry Jones went on to say:  “We are disappointed that MEPs have voted in favour of the mandatory extension of existing rules (e.g. for single ingredient products) on country of origin labelling (COOL), without considering calls from several member states, the European Commission and industry for an impact assessment to define if this would bring added value to the consumer, and the costs, feasibility and practicability of industry to implement such rules.”

So, there you have it. Mum used to know best, but now it seems our MEPs do. They govern what goes on our food labelling. Perhaps the MEPs will also vote in favour of issuing healthy eating menu cards to all EU consumers, so we all know what to cook with our “EU compliant labelled” food? I would not put it past them. As for industry, well, as the statements above indicate, it is yet more red tape and, no doubt, additional compliance costs for their businesses at a time when they can ill afford it. Still, it should keep the label manufacturers happy – or to put it another way – one man’s [labelled] meat is another man’s poison.

The brand was launched by Tesco earlier this year in an attempt to compete on a higher level in the yogurt industry. However, Eckes-Granni argues that the ‘Yoo’ name is too similar to its ‘Yo’ branding used for fruit syrups, and for which it has held a European Community Trade Mark since 2009. Tesco has countered by arguing that consumers would not be confused between the two brands.

The filing of an opposition is similar to issuing court proceedings. The Intellectual Property Office will now collect evidence and try to decide whether Eckes-Granni’s trade mark rights would be infringed by the later mark.

Whoever said yogurt was good for you (or should that be “yoo”)?

Ed Davey said, “ Our objective is to introduce a final Bill in the Second Session, although we will look at the opportunity for introducing the Bill earlier if parliamentary time allows. One reason for publishing the draft Bill as soon as possible is that if parliamentary time allows, we may be able to make it a first Session Bill, but that is not within my control.”

The background to the draft Bill which will set up a “supermarket ombudsman” is that the Groceries Supply Code of Practice was recommended by the Competition Commission following its market inquiry into the supply of groceries and report in April 2008. The Commission concluded that, although the exercise of buying power by grocery retailers was in general a good thing for consumers, it could raise concerns in certain circumstances. For instance, if retailers transfer excessive risks or unexpected costs to their suppliers in the hope of gaining a competitive advantage, it is likely to blunt suppliers’ incentives to invest in new capacity, products and production processes. Which in turn could be bad for consumers, and the Code of Practice is intended to remedy the problem.

The groceries supply code will apply to all companies active in the sector with an annual retail groceries turnover of £1 billion or more. Its provisions are now included in all retailers’ contracts with their grocery suppliers. It gives suppliers greater security, which should encourage them to invest in their operations. In essence, the code is about introducing clear standards and greater certainty.

The Competition Commission concluded that the code would be far more effective if it was enforced by an adjudicator. The idea is to dispel the climate of fear among suppliers, who felt they risked being black listed by the big supermarkets if they invoked the previous Code of Practice. The Commission does not have the power to establish an ombudsman. After failing to win agreement amongst the retailers to establish such a body on a voluntary basis, it asked the previous Government to act. The Coalition Government agrees that the Code of Practice needs to be independently monitored and enforced if it is to succeed.

The “supermarket ombudsman” will act as arbitrator in disputes arising under the code, and will have investigatory powers and, one assumes, powers to fine and censure retailers in the more serious cases of code abuse. We will know more when the draft Bill is published.

But who will ultimately benefit from the new Code and the appointment of an ombudsman? The consumer, the food supplier or both? Only time will tell. But one thing is for sure, the large grocery retailers in the UK will not be hiding under their duvets in fear of the new Bill. The Government will not want to risk being too onerous on them. After all, with a weak UK economy forecast for the foreseeable future, the last thing any Government will want to do is to alienate a sector which continues to increase trade and revenue even in these times of austerity. The big supermarkets provide UK plc with a lot of tax revenue, which is much needed in the Treasury coffers in the current climate. The ombudsman may be on his way, but he is unlikely to be changing too much any time soon.

The Government is calling on interested parties to submit a response on the website, suggesting which regulations should be scrapped, merged with other regulations, simplified, or improved.

In the recent Budget Report and Plan for Growth document, the Chancellor outlined proposals to reduce the number of UK regulations in an effort to boost economic growth. (Click here for further details.) This ‘Red Tape Challenge’ is the first step.

There are 21,000 regulations in the UK, and these will be grouped into themes on the website. Every 1-3 weeks, the Government will publish the regulations that relate to a specific sector (‘themes’), with interested parties given a set amount of time to comment on them. The Government will then collate the comments and, after the theme has been closed for public comment, the relevant government departments will have three months in which to justify the continued existence of the regulations called into question. The Government will then decide which regulations should stay, which should go and which should change. All regulations that are to be repealed will be listed on the website.

NB: regulations regarding tax and national security are exempt from this project.

At the time of writing, the timetable for comment is:

7 April – Retail;

6 May – Hospitality, food and drink;

20 May – Road transportation;

2 June – Fisheries, marine enterprises and internal waterways;

16 June – Manufacturing;

23 June – Healthy living and social care;

7 July – Media and creative services;

21 July – Utilities and energy;

4 August – Rail and merchant shipping; and

18 August – Mining and quarrying.

Each of these themes will be split into topics. For example, the current theme, retail, is split into Sunday trading, hallmarking, weights and measures, and so on.

The project is also divided into six “cross-cutting themes”. Government departments must comment on these themes every four months. These are:

1. Employment law;

2. Pensions;

3. Company law;

4. Equalities;

5. Health and safety; and

6. Environment legislation.

The project is expected to run from April 2011 until April 2013.

To read the Government press release which launched the Red Tape Challenge, please click here.

Anyway, this post is about a different kind of dog…a…wait for it….hot dog.  Sorry, sorry, sorry.

Anyway, the point of this blog is that Manfred Bog, who specialised in selling sausages and chips from three mobile snack bars at weekly markets, won a ruling from the European Court of Justice that he did not have to charge the full rate of VAT.

The court’s reasoning was that his sausages required so little preparation that they did not constitute catering. It found the same rules should apply to popcorn and nachos sold in German cinemas.

VAT is a EU tax, so the effect of this will spread to the UK.  The implications here will be  that caterers, cinemas, and other hot sausage sellers in the UK will need to ensure that they charge the correct amount of VAT and may need to discuss the implications of the case with their local VAT office.

So, when you are staggering home from your football match, pub or other entertainment venue and you are hungry enough that the sausages on sale by the street vendor start to look edible, remember to ask whether they are charging VAT correctly.  Then run.

On a slightly more serious note, those of you that follow VAT rulings will recall the Subway decision (which went the other way – the court held that VAT was to be charged on the supply of subs).   In that case, there was some discussion on the impact of this on rents.  It is entirely conceivable that purveyors of certain foodstuffs from more fixed premises, might not reduce their charges and therefore pocket the difference.  If this affects profits significantly then there might be scope for landlords to argue that rents should increase in the future, especially if there is a turnover rent.

The question to ask yourself as you quaff your bananas, blackberries, strawberries and boysenberries is: “Am I having a drink or am I eating food?”. 

Innocent think that they are food, HMRC think that they are drinks.

The tribunal found that the smoothies had ‘the consistency of a moderately thin soup’ but were intended ‘to be drunk from the bottle’.   What it came down to (as is so often the case for VAT) was the intention of the customer – since they were intended and sold as drinks, the products were within the definition of ‘beverages’.

Once again the VAT man leads the cutting edge of food technology and science.

If you miss the deadline it could be costly, as paper returns filed after this date could mean a £100 penalty.

An alternative to paper-filing is to file your return online, which benefits from a January deadline.

If you would like assistance in preparing and filing your tax returns, please contact James Odds on 01923 202020 or james.odds@mablaw.com.

In addition, the ASA objected to the fact that the survey had asked people to give the products a mark out of 10 and although Hovis’s average was higher it was not necessarily chosen preferred by more people.

Consequently, the ad breached the CAP Code. The CAP Code is a code of practice governing the content of adverts and marketing communications, and it is administered by the ASA. Although the Code does not have legal force, it is best practice to comply with it, as failure to do so can result in bad publicity and ultimately an inability to obtain advertising space.