On 17 December 2013, the European Commission adopted a Report for 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. The Report is based on an external study and examines the benefits of meat origin labelling to consumers and the feasibility of introducing mandatory origin labelling. It also provides a cost/benefit analysis including the impact on the internal market and international trade. The Commission Report is accompanied by a Commission Staff Working Document "Origin labelling for meat used as an ingredient: consumers' attitude, feasibility of possible scenarios and impacts", which provides more detailed information on the Commission's findings presented in the Report. The documents are to serve for further discussion with the Member States and the European Parliament in view of deciding whether a legislative proposal should be tabled by the European Commission.

Background

The publication of the Report fulfils the obligation imposed on the European Commission by the provisions of the EU Food Information Regulation 1169/2011 (FIR).

The FIR lays down new food labelling rules in the EU and, with the exception of mandatory nutrition labelling, will be applicable as from December 2014. It does not require mandatory origin labelling in general unless failure to indicate it might mislead the consumer. Fresh, chilled or frozen meat of swine, sheep, goat and poultry are already subject to mandatory indication of a country of origin or place of provenance (Article 26(2) of FIR). Origin of unprocessed beef and beef products must be indicated on the basis of other provisions of the EU law. The question now is whether mandatory origin indication should also be a requirement where meat is used as an ingredient in pre-packed foodstuffs. Under Article 26(6) of the FIR, the European Commission was requested to produce a report that would examine this further. 

Main Findings

The Report covers meat of all species (e.g. beef, pig meat, poultry, sheep and goat meat, game, rabbit meat, horse meat) used as an ingredient in pre-packed foods. It states at the outset that the existing traceability systems in the EU are not adequate to pass on origin information along the food chain. This is due to the fact that the traceability system focuses on food safety and follows a "one step back one step forward" rule, which does not necessarily take into account traceability for purposes of origin indication to the end consumer.

The Report concludes that consumers are strongly interested in origin labelling of meat used as an ingredient. Nevertheless, they are unaware of the cost related with providing this information and, therefore, their willingness to pay for the origin indication is very low. This willingness to pay drops by 60-80% where the price increase related with origin indication is less than 10%. Also, origin indication is ranked behind quality and price as regards factors that affect consumers' choice. In addition, there are significant differences between Member States, with regard to consumer interest in origin information for foodstuffs.

The report assesses three scenarios:

  • Scenario 1 – Maintain origin labelling on a voluntary basis;
  • Scenario 2 – Introduce mandatory origin labelling based on (a) EU/non EU or (b) EU/third country indication;
  • Scenario 3 – Introduce mandatory origin labelling indicating the specific Member State or third country.

The report concludes that while maintaining the current situation as envisaged in Scenario 1 would not impose any burden on food business operators or public authorities, as well as would not impact on EU and international trade, it would not address consumer demand for origin information.

Scenario 2 would address consumer demand for origin information, although in a generic manner. Food business operators are estimated to have to deal with additional operating costs of up to 25%. As a result, EU and international trade could be affected due to a potential shift of EU food business operators towards EU meat suppliers. In addition, food business operators based in developing countries might lack the resources and the know-how to ensure compliance with EU mandatory origin labelling requirements. The administrative burden on public authorities is estimated to increase by 10-30%.

Finally, the Report concludes that Scenario 3 would most likely provide the most meaningful information to consumers. At the same time, operating costs for business would likely increase by minimum 15-20% up to 50% as more detailed information and a full traceability system would be required. The level of increased costs makes this Scenario less feasible than Scenario 2. In addition, administrative costs for food business operators are expected to rise by 8-12%. Public authorities would need to cope with much higher administrative costs as well compared to Scenario 2. The impact on trade and competitiveness would be similar to the one described under Scenario 2.

Next steps

The European Commission did not indicate in the Report any preferred option and it intends to discuss all options with the European Parliament and EU Member States. On the basis of the discussions, the European Commission is expected to consider what, if any, appropriate next steps should be taken. This may include the tabling of a legislative proposal to regulate the origin of meat used as an ingredient in foods.

In fact, in addition to this report on the origin indication of meat used as an ingredient, the European Commission is required, under Article 26(5) of the FIR, to produce, by 13 December 2014, several other reports on mandatory indication of the country of origin or place of provenance. These would include the following foods:

  • Types of meat other than beef, swine, sheep, goat and poultry;
  • Milk;
  • Milk used as an ingredient in dairy products;
  • Unprocessed foods;
  • Single ingredient products;
  • Ingredients that constitute over 50% of a food.

The Commission has started working on the above reports and is expected to present these in the course of next year.

Impact

For now the Report is mere informative in terms of the different scenarios that have been evaluated for tackling mandatory origin indications for meat ingredients. It remains to be seen how the discussions will develop in the European Parliament and Council and whether or not the report will indeed function as a stepping stone to more concrete legislative proposals. Any such labelling scheme is likely to come at a cost. Food business operators supplying or using meat as an ingredient, whether based in the EU or not would have an interest in closely monitoring the developments and may wish to have their voice heard early on in the process. Input to the discussion may be provided via contacts with the European Commission, Members of the European Parliament or via national governments of the EU Member States.

At the same time it will be interesting to keep an eye out for the additional reports on mandatory origin labelling that are still in the pipeline. Given that the trend likely will be towards increased consumer information regarding origin of food ingredients, manufacturers of multi-ingredient products would have an interest in understanding the likely increased costs that the introduction of such origin labelling schemes would have on their business and also how much of those costs could eventually be passed on to the consumer.