The US Department of Agriculture (USDA) has published a review of the EU’s country-of-origin labelling (COOL) policy. It notes that when the EU’s regulation on the provision of food information to consumers (FIC) (Regulation no. 1169/2011) was adopted, it was agreed that mandatory COOL requirements “should be extended to more food products and ingredients”. The initial deadline for defining which products should be subject to COOL requirements was 31 December 2013, but USDA notes that the deadline “has already passed” and that “the Commission has not yet adopted an implementing regulation… and is still reflecting on the best way forward.”
The USDA review notes that “Article 26.5 of the FIC Regulation requires the Commission to prepare reports by 13 December 2014 that assess the need and feasibility of extending mandatory COOL to the following foods”:
- “types of meat other than beef, pork, sheep, goat and poultry meat;
- milk used as an ingredient in dairy products;
- unprocessed foods;
- single-ingredient products;
- ingredients that represent more than 50% of a food”.
According to Paragraph 19 of EU Regulation 1169/2011, mandatory country-of-origin labelling should only be used where it is necessary, proportional and sustainable. In Paragraph 30, the regulation makes a clear distinction between mandatory labelling and voluntary labelling “to draw consumers’ attention to the qualities of their product”. In Paragraph 29, the necessity of COOL requirements is explored. COOL labelling is considered to be necessary “whenever its absence is likely to mislead consumers as to the true country of origin or place of provenance of the product”.
The EC has initiated a process of consultations over the products on which mandatory COOL requirements should be applied. This has given rise to concerns among ACP sugar exporters that COOL requirements could be extended to sugar under Article 26.5 (single-ingredient products and ingredients that represent more than 50% of a food).
But questions arise as to the relevance of COOL requirements to sugar, given the underlying objectives of the regulation and the homogenous nature of sugar as a product. In this context, the distinction between mandatory labelling and voluntary labelling designed to “draw consumers’ attention to the qualities of their products” is very relevant. While country-of-origin labelling can be a useful marketing tool, this is quite different from the imposition of mandatory requirements to prevent consumers from being misled “as to the true country of origin or place of provenance of the product”.
In addition, from an ACP perspective there would appear to be a commercial case against extending mandatory COOL requirements to sugar. Since EU sugar sector reforms began in 2005, there has been a significant expansion of capacity to co-refine raw cane sugar alongside beet processing operations. Some estimates put this expansion at 1.85 million tonnes of new capacity (see Agritrade article ‘ The future of EU sugar production quotas’, 23 September 2012), while a 2011 evaluation of the EU Sugar Common Market Organisation reforms estimated that for raw cane sugar, “the overall refining capacity in the EU27 will be around 4.7 million tonnes/year in 2013.”
This has broadened the range of customers for ACP sugar exports and has assisted ACP exporters in securing better prices on the EU market. Some of the co-refiners – i.e. sugar beet refiners who produce sugar from raw cane sugar as well as from sugar beet – now regularly and consistently process raw cane sugar, while others only process raw cane sugar when there is a shortfall in their own beet production, and others still are only now beginning to develop co-refining of raw cane sugar. Given these different patterns of co-refining, the costs of compliance with any COOL requirements would vary considerably between the co-refining companies, depending on the volumes they process and their sourcing practices (directly importing or via traders).
While the full cost implications have not been assessed, the possibility exists that any introduction of COOL requirements for sugar could discourage some companies from co-refining, thereby reducing competition on the EU market for ACP raw sugar. It could also encourage co-refiners to limit their sources of raw cane sugar imports, in order to simplify compliance with the COOL requirements, thereby effectively excluding smaller-volume ACP exporters. More fundamentally, the new requirements could prevent the use of the highly efficient practice of mixing raw cane sugar with EU beet sugar in the final refining process.
Given the homogenous nature of sugar as a consumer product, these commercial disadvantages would accrue without any corresponding consumer benefits.