Mondelez calls on EU Commission for further year-long EUDR delay

Mondelez International has approached the EU Commission seeking an additional year’s delay to the introduction of major EUDR regulations designed to tackle deforestation in supply chains, writes Neill Barston.

The company’s call to the European body, first reported by the Financial Times, has centred on the economic impact of introducing the landmark regulations, which would for the first time bring mandatory controls compelling companies to log their respective environmental performance.

Furthermore, with cocoa prices reaching a comparative high of $12,000 a tonne at the start of this year, and other ingredients costs and supply chains coming under strain including sugar, there has been a growing pushback from other industries over the timeline of introducing the new frameworks – with the centre-right European People’s Party pushing for the laws to be significantly watered down, and delayed.

The EUDR had already been due to be in place at that start of this year, and following political wrangling on the issue, it was pushed back to beginning at this December. 

But Mondelez’s latest stance, which places it at odds with other confectionery major groups, including Mars, Hershey, Ferrero and Nestle in supporting the urgent introduction of the landmark legislation, alongside parallel corporate due diligence legislation also going through the EU, which is also facing fierce political opposition. 

Furthermore, the implementation of the much-hyped US tariffs by president Donald Trump, has caused further market disruption around the globe, as economies scramble to respond.

As previously reported,  major US confectioner Hershey noted that its costs would be impacted negatively by $200 million due to the introduction of tariffs, as cocoa is not grown in the US, and has appealed to the White House for an exemption from the new taxes, which has yet to be resolved.

Speaking to the FT,  Massimiliano di Domenico, the Vice President of corporate and government affairs for Mondelez, said: “Further regulatory barriers could undermine the competitiveness of a €70 billion industry, at a time when the EU needs to step up its focus on competitiveness and economic resilience.”

Under the original proposals for EUDR which were agreed several years ago within the Europe, the sector had offered its broad backing to the scheme – with the EU Commission giving businesses and wider agricultural supply chains, including cocoa, palm oil and soy providers, a period of two years to enact compliance for the initiative, which had been due to start earlier this year.

But a fresh vote in the EU Parliament yesterday, which is non-binding, saw countries reject the Commission’s plans for risk based system for assessing the legislation.  Right wing groups voted in favour of a call by 373 to 289, to press the European Union to repeal its proposed categories of low and high risk country benchmarking, replacing it with ‘up to date data’  – which would seriously undermine the legislation in its current form according to many industry observers.

EUDR facing major hurdles

As Confectionery Production has previously reported, many analysts ,and food sector businesses have acknowledged, the failure to adopt such a risk-based monitoring of EUDR would in effect leave significant loopholes of the entire scheme – which was intended to ensure greater sustainability in supply chains.

Moreover, as environmental campaign group Mighty Earth asserted, the EU’s rating systems for EUDR, split across Low and high risk ratings posed significant concerns.

According to the non-profit organisation, the EU is “leaving the back door wide open to goods that have been produced on recently deforested or degraded land” or grown illegally in protected areas such as wildlife refuges, national forests and Indigenous territories.

Speaking to Confectionery Production, Antonie Fountain, managing director of the Voice Network, which has campaigned for the swift introduction of mandatory EUDR policy, believed that the call from Mondelez was at variance with many players in the sector.

He commented: “Mondelez; indeed, they’ve had the same amount of time as everybody. But the way I see it, they’ve chosen a strategy that makes them non-compliant by default.

“They don’t source their cocoa from their programmes, but buy all their cocoa mass-balance. This means that by their business strategy on simply using only the terminal market, they will never be compliant. Another year’s delay won’t solve that for them. Nor will ten. They need a different business strategy, not a delayed regulation.”