Annexes to COM(2015)204 - Regarding the mandatory indication of the country of origin for unprocessed foods, single ingredient products and ingredients that represent more than 50% of a food - Main contents
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| dossier | COM(2015)204 - Regarding the mandatory indication of the country of origin for unprocessed foods, single ingredient products and ... |
|---|---|
| document | COM(2015)204  |
| date | May 20, 2015 |
Scenario 3, besides similar impact as scenario 2 on international trade, risks to impact the internal market, with a possible nationalisation of food supply chains, as almost half of the respondent consumers indicated that they would prefer products from their country. Under this scenario, although EU products could benefit from the preference of consumers on the EU market, additional burden and rigidity of the sourcing practices would penalise EU FBOs on the international market.
7.2.3.Administrative burden on businesses
For FBOs dealing with raw materials of different origins, additional administrative burden would be due to the records of the origin for the supplies of deliveries and for the adaptation of the traceability system. Fixed costs would represent an important part of the additional burden, and would penalise much more SMEs. Only SMEs sourcing with a single or a limited number of origins would not be penalised.
Scenario 1 would result in negligible administrative burden and only for the businesses that provide the origin of the final food and that origin is different from the primary ingredient(s). The total burden is also estimated to be lower under scenario 2 compared with scenario 3, and lower for modality a compared with modality b.
7.2.4.Additional burden on public authorities
For public authorities, the estimation by Member States of the increase in control costs is very divergent. Under the hypothesis that the funding allocated to control authorities by the state budgets is not increased, such new rules may lead to a reduction in the frequency of controls or a change in priorities, which, combined with the absence of analytical method to check the origin of foods, may result in an increased risk for fraud.
7.2.5.Costs for consumers
The provision of origin information is expected to result in increased costs, which would certainly be passed mainly onto to the consumer (based on the FCEC study). According to this study, the importance of these cost increases would vary from non-significant cost increase to high increase, depending on the food, the food sector, but also the Member State.
Scenario 1 is not likely to result in an overall price increase. Only the products bearing voluntary origin information could potentially be affected.
Scenarios 2 and 3 are likely to result in an overall price increase in the consumer price, which would be much higher in the latter case. As such, scenario 3 – and to a lesser extent scenario 2 – may result in a decrease in the consumption of the food products in the scope of the report if the cost increase is substantial, or to a higher consumer budget dedicated to the purchasing of these foods, which can often be basic foods.
It should also be noted that under scenario 3, the nationalisation of the food chain could have an impact on employment due to the reorganisation of the food production chain, with positive impacts in certain cases and negative impacts in others.
7.2.6.Environmental impacts
The introduction of mandatory rules for origin information may result in an increased food waste and a lower energy efficiency due to the multiplication of production lines or production batches, the multiplication of the distinct food products (Stock Keeping Units) on the EU market and of the distribution channels necessary to distribute them. This impact would be much more pronounced for scenario 3 compared with scenario 2, while scenario 1 would have no or minimal impact.
Scenario 2 and 3 could however provide an incentive to consume products produced more locally, which could have a beneficial impact on the environment by limiting potential pollution from transport.
7.3.Costs and benefits of the different scenarios
The table below provides a summary of advantages and disadvantages of the different origin scenarios.
| Scenarios | Impact on consumers based on the FCEC study | Economic impacts based on the FCEC study | |
| Scenario 1 – Maintaining voluntary origin | Costs | Does not guarantee that consumers are systematically provided with origin information | Additional operating costs would be kept to the minimum Limited administrative burden on businesses and public authorities No or limited price increases |
| Benefits | Food prices would be maintained at their current levels, except for those cases where voluntary labelling is applied and origin of primary ingredient is different Consumers, who do not attach any specific importance to origin, would not have to bear the additional origin-related costs Consumers interested in knowing the origin may opt for products bearing this information | It would not lead to internal market segmentation and therefore intra-EU trade would not be affected The lack of additional burden would allow to maintain the competitiveness of the EU FBOs in the international market | |
| Scenario 2 – Mandatory origin labelling at EU/non EU or third country level | Costs | The origin information provided would not be very informative, as it would be too general The information may raise further questions on the more precise origin of food, even among consumers that were not a priori requesting such information, leading to a certain frustration The additional origin costs are likely to be passed onto the consumers | FBOs would incur certain operating costs, because of supply chain and production adaptations For most of the sectors, these costs are estimated from negligible up to moderate for modality a and from moderate to high for modalities b and c Additional administrative burden on businesses and public authorities, but lower than with scenario 3 |
| Benefits | Guarantees that consumers are systematically provided with origin information Could be perceived as a food quality and safety label | More flexible for sourcing practices compared with scenario 3 With a recognised EU food quality and safety, this could contribute to a better positioning of the EU food product in international trade | |
| Scenario 3 – Mandatory origin labelling at MS/third country level | Costs | Impact of final products prices would be markedly higher than in scenario 2 This could impact the budget consumer dedicate to their food, as many product would be in the scope of the legal requirement | All FBOs would incur certain operating costs because of the duplication of storage facilities, fragmentation of production processes, more complete traceability systems, labels changes According to the FCEC study, operating costs increases are estimated from 10 to 15% for the sector that are not dealing with a high number of different origin, but can reach 30% in many cases Administrative burden on FBOs and controlling authorities would be higher than in scenario 2 It would result in more market segmentation of the different food sectors, nationalisation of the food supply chain, with a lower competitiveness on the international market |
| Benefits | Guarantees that consumers are systematically provided with origin information Improve consumer confidence in food. | Could boost certain domestic sales because of food nationalism | |
| Scenario 4 – Mandatory origin labelling at lower level (region) | No higher consumer interest compared with scenario 3 | Higher impact compared with scenario 3 |
8. Conclusions
In terms of factors affecting consumer purchasing decisions, consumer interest in origin labelling, ranks behind price, taste, use by / best before date, convenience and/or appearance aspects. Even if consumer interest in origin labelling for unprocessed foods, single ingredient products and ingredients representing more than 50% of a food is claimed by two thirds to three quarters of consumers, it is lower than for food categories such as meat, meat products or dairy products.
Consumers link origin information to various product aspects, such as quality, safety, environmental concerns and also declare that they would buy national products to support the economy of their country, with important differences amongst Member States. They would prefer information on origin at the level of the country compared with a EU/non-EU level and seem more interested in the place of production compared with the place of farming of the raw material.
Unprocessed foods, single ingredient products and ingredients that represent more than 50% of a food are food categories that gather very different products, for which consumer interest in origin information and economic impact of imposing a mandatory origin labelling varies greatly.
The supply chains for the three categories of foods in the scope of the report show that the origin of ingredients varies frequently to maintain low purchasing prices and to maintain the quality of the final product. Therefore, mandatory origin labelling at the EU level and even more at the level of the country is highly complex to implement in many areas of food, leading to substantial increases of costs of production, which ultimately would be passed on to consumers.
Origin labelling on a voluntary basis would be the least market disruptive scenario and would maintain product cost at current levels. It would not provide a satisfactory solution to the consumer demand for systematic origin information, but consumers could, if they so wish, opt for foods where origin information is voluntarily provided for by food business operators. Mandatory origin labelling at EU level (EU/non-EU or EU/third country) leads to less important production cost increases, less burden for both food business operators and Member States competent authorities, but consumer satisfaction would be not as high as with mandatory origin labelling at country level. Unlike origin labelling at EU level, origin labelling at country level would have an important impact on the internal market, with a possible increase of consumption of local foods for certain markets.
Both mandatory origin labelling scenarios at EU and country levels could impact on international food supplies and interfere with existing trade agreements with third countries. Additional labelling rules may lower the competitiveness of EU food business operators on the international market, while food business operators from third countries are concerned about potential additional costs of production and loss of exports to the EU because consumers would prefer foods of EU origin.
Finally, mandatory origin labelling would represent an additional burden on Member States competent authorities, in particular in the current economic environment, if they had to cope with the imposition of possible new control tasks for such additional requirements.
Against this background and in view of the Commission policies in terms of better regulation, voluntary origin labelling combined with the already existing mandatory origin labelling regimes for specific foods or categories of food appears as the suitable option. It 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.
(1) Regulation (EU) No 1169/2011 of the European Parliament of the Council of 25 October 2011 on the provision of food information to consumers (OJ L 304, 22.11.2011, p. 18).
(2) Study on the mandatory indication of country of origin or place of provenance of unprocessed foods, single ingredient products and ingredients that represent more than 50% of a food - Final report - Food Chain Evaluation Consortium (FCEC) -
http://ec.europa.eu/food/food/labellingnutrition/foodlabelling/index_en.htm
(3) Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of agricultural products, OJ L 347, 20.12.2013, p. 1671.
(4) Council Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) and Commission Implementing Regulation (EU) No 543/2011 of 7 June 2011 laying down detailed rules for the application of Council Regulation (EC) No 1234/2007 in respect of the fruit and vegetables and processed fruit and vegetables sectors, OJ L 157, 15.6.2011, p. 1-163.
(5) Regulation (EU) No 1379/2013 of the European Parliament and of the Council of 11 December 2013 on the common organisation of the markets in fishery and aquaculture products, OJ L 354, 28.12.2013, p. 1.
(6) Regulation (EC) No 1760/2000 of the European Parliament and the Council of 17 July 2000 establishing a system for the identification and registration of bovine animals and regarding the labelling of beef and beef products, OJ L 204, 11.8.2000, p. 1.
(7) Commission Implementing Regulation (EU) No 29/2012 of 13 January 2012 on marketing standards for olive oil, OJ L 12, 14.1.2012, p. 14-21.
(8) Council Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation).
(9) Commission Regulation (EC) No 589/2008 of 23 June 2008 laying down detailed rules for implementing Council Regulation (EC) No 1234/2007 as regards marketing standards for eggs, OJ L 163, 24.6.2008, p. 6-23.
(10) Commission Regulation (EC) No 543/2008 of 16 June 2008 laying down detailed rules for the application of Council Regulation (EC) No 1234/2007 as regards the marketing standards for poultrymeat, OJ L 157, 17.6.2008, p. 46-87.
(11) Commission Implementing Regulation (EU) No. 1337/2013 of 13 December 2013 laying down rules for the application of Regulation (EU) No. 1169/2011 of the European Parliament and of the Council as regards the indication of the country of origin or place of provenance for fresh, chilled and frozen meat of swine, sheep, goats and poultry, OJ L 335, 14.12.2013, p. 19.
(12) Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002 laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety, OJ L 31, 1.2.2002, p. 1.
(13) Report from the Commission to the European Parliament and the Council regarding the mandatory indication of the country of origin or place of provenance for meat used as an ingredient (COM(2013)755).