ANNEX A: REGULATORY IMPACT ASSESSMENT Extension of Product Liability to Primary Agricultural Products Compliance costs for business
The costs arising from adoption of this change are those associated with insuring against the possibility of damage claims as a result of the removal of the exemption.  The sectors directly affected by the proposal are:
Stock farming (cattle, calves, sheep, lambs, pigs and poultry)
Dairy products (milk and eggs)
Fisheries
Game.
The following are also affected because the Directive considers them liable as producers if they fail to identify the producer to the injured person:
Importers from third countries
Wholesalers
Retailers.
The size of business affected by this proposal will vary from the very large agricultural enterprises to the small and medium sized operations which produce, supply and distribute products in their natural state.  It is therefore not possible to define a “typical business” or to estimate meaningfully its compliance cost.
Product liability insurance is estimated to cost within the region of £170 to £350 per year per business according to figures obtained in the England and Wales consultation, although such insurance is often offered as part of a larger business insurance package. Some of the consultees in England and Wales believe that cost would increase but did not provide figures to substantiate this.  Information from other member states which have this legislation (Finland, Sweden, Greece and Luxembourg) has suggested that the insurance costs are low.
It is estimated that some 99% of farmers in the UK already carry product liability cover, as do most fish and shellfish producers.  Some 70% of fresh fruit and vegetables produced in the UK are sold by supermarket chains which are likely already to have product liability insurance.  The additional costs to these producers are likely to be minimal.  The remaining 30% is sold by small independent producers, who are likely to incur a small additional insurance cost.