Mondelez International is advocating for an additional delay in the implementation of the EU Deforestation Regulation (EUDR), emphasizing that the regulation must be “workable” in practice.
The EUDR is scheduled to go into effect in December after already facing a postponement. According to this directive, companies marketing products such as cocoa, coffee, and palm oil within the EU must demonstrate that their supply chains are free from deforestation-related impacts.
In a statement, Massimiliano di Domenico, Mondelez’s Vice President of Corporate and Government Affairs in Europe, highlighted the need for a practical application of the EUDR. He asserts that “to deliver real impact on the ground, the EUDR regulation must be workable, not just in principle, but in practice.”
In Côte d’Ivoire, a key supplier of cocoa to the EU, over one million farmers are involved in cocoa production. However, less than 20% have secured the EUDR-mandated traceability ID cards, which are required to be renewed by year-end. Di Domenico cautioned that without sufficient time to develop necessary systems, compliant cocoa could be excluded from the EU market. This scenario would adversely affect farmers, escalate costs for businesses, and disrupt supply chains.
Furthermore, di Domenico pointed out that Europe imports over 50% of the world’s cocoa beans and accounts for 75% of global chocolate sales. He warned that additional regulatory barriers could threaten the competitiveness of the €70bn ($82.1bn) industry, especially given the current record-high cocoa prices.
Mondelez, the corporation behind popular brands such as Cadbury, Oreo, and Milka, voiced its concerns during a pivotal time when the EU should enhance its focus on global competitiveness and economic resilience. Di Domenico argued that a further delay would facilitate “legal clarity and simplification” of the complex EUDR requirements, which would adequately support farmers and maintain market stability.
He emphasized that a delay would offer the cocoa market an opportunity to stabilize amid soaring prices and supply shocks, ensuring that the EUDR is introduced in a sustainable, effective, and practicable manner. “We remain committed to working with the European Commission on a practical and effective path forward,” di Domenico added.
The EUDR, announced in late 2021, has previously faced considerable scrutiny. In September, industry organizations such as Copa-Cogeca and the European Livestock and Meat Trading Union co-signed a letter asserting that implementing the EUDR before the end of 2024 is “simply unfeasible.” Additionally, the US government, Southeast Asian nations, and various paper industry associations have voiced their opposition to the regulation.
In conclusion, Mondelez’s position underscores the challenges facing the food and beverage industry, particularly the cocoa sector, as it navigates evolving regulatory landscapes and consumer expectations. As businesses adapt to these shifting dynamics, it becomes increasingly crucial to consider the interplay between sustainability initiatives and market competitiveness.