Mandatory origin labelling: Costs outweigh the benefits, says EC

By Niamh Michail contact

- Last updated on GMT

The report warned that SMEs would be adversely hit by additional administrative costs of mandatory labelling
The report warned that SMEs would be adversely hit by additional administrative costs of mandatory labelling

Related tags: Origin labelling, European union, European commission

Mandatory labelling for dairy could push up production costs by nearly 50% and limit consumer freedom of choice - the current status quo is the most suitable option, say two Commission reports that have been welcomed by the food industry.

Both reports evaluated additional costs to the supply chain, impact on consumers and trade as well as the public and private administrative burden of various labelling options.

They concluded that the current status quo - voluntary origin labelling combined with mandatory labelling for certain foods - was the most suitable option.

“[The current situation] maintains selling prices at current levels and still allows consumers to choose products with specific origins if they want to, while it does not affect the competitiveness of food business operators and does not impact internal market and international trade,” ​the report said.

The products under examination were milk and dairy, less commonly-consumed meat, such as horse, rabbit and game, unprocessed foods – such as rice and bagged salads -, single ingredient products and ingredients that make up more than half of a product, such as tomatoes in passata or wheat in bread. 

The first report​ warned that costs could rise to 45% for some milk and dairy producers, and questioned whether consumers would be willing to shoulder these extra costs.

The introduction of mandatory origin labelling will, depending on the specific labelling option chosen, lead to an increase in the cost of production ranging from 0 to 8 % at Member State level and at individual firm level, cost increases might be much larger (even up to 45%).”

“There is a clear consumer interest in origin labelling but different surveys suggest that consumers' willingness to pay for origin labelling is low and likely to be overstated.“

It added that voluntary labelling ensured freedom of choice for all by allowing consumers for whom price was a priority to opt for cheaper, unlabelled products.

Why do consumers want origin labelling?

42.8% of respondents said origin labelling would help them favour national or local ​products.

12.9% said it provided reassurance on the quality ​of the food

12.8% said it would help them make environment-related​ decisions

10.8% said it reassured them over food safety

The second report​ said that SMEs, which make up 99% of the 286,000 companies operating in the EU food and drink sector, would be unfairly hit by additional administrative costs.

Reactions: ‘Like asking turkeys to vote for Christmas’

The conclusions were welcomed by FoodDrinkEurope.

“Food business operators are already providing origin information on a voluntarily basis where a consumer demand exists and where feasible,” ​it said.

“We therefore ask the European Parliament and the Council to take the findings of these reports into account in view of future discussions on the feasibility of origin labelling for these food categories.”

But consumer rights group BEUC said the EU was failing consumers by denying them the possibility to make informed food choices.

Director general Monique Goyens said: “The Commission’s preference to leave the industry to voluntarily label origins is a blow for consumers’ right to know where our food comes from. Such an approach is a little too close to asking turkeys to vote for Christmas.

“We will study the Commission’s reports in detail, but one can be forgiven for wondering as to the point of the exercises.

“The European Commission has not yet responded to the call for mandatory origin labelling on processed meat which was launched by the European Parliament two months ago. Such silence does not augur well for the other foods targeted in these two reports.”

The reports have been transmitted to the European Parliament and the Commission.

Mandatory labelling for beef, pork, poultry, sheep and goat meat entered into application​ in December 2014.

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