Danone Reaffirms Ongoing Soy Procurement from Brazil Amidst Regulatory Changes
Danone has reiterated its commitment to sourcing soy from Brazil, following a recent wave of media reports that suggested otherwise.
Last week, Reuters reported, citing Danone’s Chief Financial Officer Jurgen Esser, that the company had ceased its Brazilian soy procurement. The report indicated that the Activia and Alpro manufacturer redirected its purchases towards Asia, anticipating the European Union’s new regulatory framework on commodities sourced from deforested areas. This new EU Deforestation Regulation (EUDR) has been proposed to delay its implementation by a year, according to discussions in Brussels.
In response to these developments, the Brazilian government issued a comprehensive statement on October 30, defending its approach to tackling illegal deforestation and emphasizing its stringent oversight of soybean exports. The Ministry of Agriculture and Livestock criticized the EUDR, labeling it as “arbitrary, unilateral, and punitive.” The ministry insisted that Brazil is eager to collaborate but expects equal treatment in international trade and opposes unreasonable measures prompted by European companies.
“The Brazilian government emphasizes its readiness for collaboration while demanding fairness and balance in trade relations. Measures deemed unreasonable must be rejected,” the ministry asserted.
In line with this, Danone released its own statement addressing the ministry’s assertions, asserting that it “regrets the incorrect information circulating regarding Danone and the sourcing of Brazilian soy.” The company confirmed that it continues to purchase Brazilian soy in adherence to both local and international regulations.
Danone emphasized the significance of Brazilian soy in its feed supply chain for dairy farmers, maintaining that it remains an integral component of their operations.
The ongoing cultivation of soy for the agri-food industry has attracted scrutiny from NGOs concerned about its contribution to deforestation, particularly in the Amazon. The Brazilian Ministry of Agriculture and Livestock defends the country’s environmental framework, claiming robust monitoring and inspection systems have successfully combated illegal deforestation across key regions such as the Cerrado and Amazon.
The ministry stated that Brazilian exporters comply with stringent due diligence processes, ensuring satisfaction of their international clients’ requirements. “These processes reflect the concerted efforts and investments in sustainability made by Brazil’s productive sector,” the statement affirmed.
In its clarification, Danone revealed that most soy sourced from Brazil is facilitated through its Central Purchasing system, which guarantees that the soy originates from non-deforested areas. Danone acknowledged, “We recognize the Brazilian government’s strong commitment to forest preservation and its remarkable initiatives to promote sustainable soy agriculture.”
The inquiry into Danone’s soybean sourcing has prompted further investigation into which of its global operations utilize Brazilian soy. In its official statement shared on LinkedIn, Danone specified that in regions like the EU, farmers procure their feed independently, and Brazilian soy plays a crucial role within the industry.
Senior EU policy advisor at Solidaridad Network, Gert van der Bijl, highlighted that while there has been media attention over Danone’s shift away from Brazilian soy, the majority of Danone’s soy sourcing stems from other regions, including Europe and Canada, rather than Brazil.
He stated, “Danone employs approximately 260,000 tonnes of soymeal in its dairy supply chain and notably, a significant portion of this is sourced from outside Brazil.”
In summary, Danone positions itself firmly in the discourse surrounding the food and beverage industry and sustainability, asserting the ongoing necessity of Brazilian soy in its operations while advocating for responsible sourcing practices that reflect industry trends and consumer expectations. The situation remains fluid as both Danone and Brazil navigate the challenges posed by evolving regulatory landscapes and public scrutiny.
