Food retailers who are extending their reach into non-food products as sourcing them becomes easier and selling them offers higher profit margins, are exposing themselves to a variety of new risks

This was one of the discussion topics at a pan-European gathering of major food retailers hosted by Aon in association with IGD, international food and grocery specialist.

The conference also examined the rapid expansion of western food retail chains into developing markets, from Eastern Europe to Asia. These firms understand that consumers in Asia spend relatively little on food at the moment, but that a doubling of grocery spend in China would turn that country into the world's biggest retail market. If India doubled its retail spend on groceries it would be the same market size as Japan.

Delegates discussed potentially hazardous issues. The most serious included:

- increasing liability and brand damage risk associated with the sale of non-food goods, such as faulty electrical goods

- mounting political risk associated with moving into, or working with suppliers from, foreign countries

- campaigning groups targeting retailers as an easy way to secure publicity for their causes

- increasing levels of counterfeiting threatening both brand owners and consumers

- the unease of governments and other stakeholders about national and global markets being dominated by a few major players

- the upward pressure of rising energy and raw material costs on prices

- rising supply chain costs

- the unpredictable consequences for the pattern of consumption of the increasingly ageing population in the western world

- the major problem of waste disposal, with 15-20% of household waste consisting of food and packaging.