Minister Piet Adema for Agriculture, Nature and Food Quality (LNV) has informed the House of Representatives that the new cost price model for the Dutch food and consumer safety authority will be introduced from 1 January 2023. This means that the costs for companies will be increased by 30 million euros compared to 2022.
The cost price model is about the allocation of costs for services and products from the Netherlands Food and Consumer Safety Authority (NVWA). It is therefore not about the cost-effectiveness of tariffs and the extent to which the government ‘reduces’ the tariffs, as Adema makes clear in the letter to the Danish Parliament.
The cost price model has been developed together with the business world and, according to Adema, provides advantages for both the public and business world. ‘It is more transparent and leads to a more refined cost distribution and greater tariff differentiation.’ The costs that business must pay will change as follows from 1 January 2023:
– In the rates for 2023, the real cost increase in 2023 will be passed on from NVWA and the Animal Sector’s Quality Inspection (KDS). Altogether, it is 5.5 million euros;
– The generic mitigation (€17.1 million) spread across all NVWA and KDS tariffs expires on 1 January 2023;
– Adema will charge a number of activities from 2023, because it fits in with the current rules, or because it must be because of these rules. In total, it is about 8.6 million euros distributed among the various sectors;
– The positive result of the KDS for 2021 (1.1 million euros) will be deducted from the KDS rates for 2023;
On the basis of the above points, the costs for companies in 2023 will be increased by 30 million euros compared to 2022. “Despite the fact that part of the business world is still of the opinion that the new cost price model should not yet be introduced, I choose to do it,’ says Adema.
“Precisely because the new model is more transparent due to a more refined distribution of costs and greater tariff differentiation. It also forms the basis for the further development towards a new settlement system.’
Business has raised a number of objections to the new cost price model. These are adjustments in relation to the distribution of costs over initial and quarterly prices, reversal of the division of slaughterhouse categories and a division between imports and exports in terms of plant health.
According to Adema, preparations to introduce the new cost price model on 1 January are at an advanced stage. ‘Because everything is now set up in line with the new model, a choice to continue using the old (current) model from 2022 is difficult to implement and will be associated with significant operational, financial and legal risks.’
Cost effective prices
In addition to the agreement on a new form of settlement, the coalition agreement also states that the tariffs must cover the costs. The Ministry of LNV currently finances 35 million euros annually, so that business pays less than the actual costs.
Adema has had an impact on the cost-effective tariffs and the introduction of the new cost price model, which has been investigated by Wageningen Economic Research (WER). According to the LNV minister, the report indicates that calculated tariff increases will not lead to insurmountable social consequences.
This is with the exception of the smaller slaughterhouses, where the cost recovery rates are disproportionate. ‘But I am also aware that many other companies are finding it extra difficult at the moment due to the special economic conditions.’
In addition, from 1 January 2023, a number of adjustments will be made to the import tariffs for veterinary and food to ensure a more efficient system. There is agreement on this with the sector. In order to arrive at the 2024 rates next year, Adema will have WER conduct another study in the third quarter of 2023.