Transcript Title: Sugar

Conference on the
EU Agriculture Products Quality Policy
„The contribution of Marketing Standards“
Russell Mildon, European Commission
Prague, 12-13 March 2009
Marketing Standards
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A contribution to Agricultural Product
Quality;
 A labelling requirement to ensure that:
– consumers purchase what they want;
– producers who meet the needs of
(a segment of) consumers are:
i. appropriately compensated, and
ii. their efforts are not undermined by
unfair competition.
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 Standards go back to the 19th century (for
exports), for Fruit & Vegetables
 UN Geneva Protocol 1951 – backdrop of
international e.g. ECE/UN standards.
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The current state of play
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Beef & veal
Eggs (XL, L, M or S) (cage, barn, free-range, organic)
Fresh (and processed) fruit and vegetables (Extra, Cat. I, Cat. II, Cat. III)
Honey
Hops
Milk & Milk products (≠ soya)
Butter, margarine and blends
Olive oil (origin)
Pigmeat
Poultry (Class A or B) – (fresh, frozen, chilled and thawed)
Sheepmeat
Sugar
Wine
Cocoa and chocolate
Coffee extracts & chicory extracts
Fruit juice (not diluted, i.e. not from concentrate)
Fruit jams, jellies and marmalades
Spirit drinks
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The current state of play
 Simplify rule making ?
 (Optional) – reserved terms – useful,
accurate, technical information
– e.g. “cold extraction” optional use.
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Fruit & Vegetables
 Status quo: 1 July 2009
– New General Marketing Standard (sain, loyal et marchand
+ “origine”) (approx. 70+ [80+] “groups”);
– Specific marketing standards - 10 cf 36
1. Apples
2. Pears
3. Citrus fruit
4. Kiwi fruit
5. Lettuces
6. Peaches and nectarines
7. Strawberries
8. Sweet peppers
9. Table grapes
10.Tomatoes – (1-10 = 75% of Intra EU-trade)
11.Bananas
• (but NOT potatoes)
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Consultation process
 Keep our current approach to “marketing
standards”? Don’t abolish EU “marketing
standards” (and move to either coregulation or simply refer to international
standards);
 Do simplify the system;
 “Reserved terms” potentially very useful
but, make their meaning clearer.
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 European Parliament : Simplify etc.
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“Quality” : consultation
“As globalisation spreads, products from emerging
countries with low production costs are putting greater
pressure on EU farmers. There is growing competition
for both agricultural commodities and value-added
products. Faced with these new commercial
challenges, the EU farmers’ most potent weapon is
“quality”. The EU has an advantage on quality given
the very high level of safety ensured across the food
chain by EU legislation in which farmers, and
producers more globally, have invested. However,
there are more aspects which can reinforce quality in
the more global sense of the term.”
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“Quality” : consultation
“Quality is about meeting consumer expectations. The
agricultural product qualities addressed in this Green
Paper are the product characteristics, such as farming
methods used, place of farming, etc. that a farmer
wants to be better known and a consumer wants to
know. Quality is an issue for every farmer and every
buyer, whether they are dealing with commodities
produced to baseline standards or with the high-end
quality products in which Europe excels. This Green
Paper is without prejudice to issues of quality linked to
food safety which are already covered by other
Commission actions such as nutritional labelling,
animal welfare, etc.”
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EU specificities
 Stringent Baseline Production:
– Stringent requirements on safety and hygiene;
– Product identity e.g. veal (and composition e.g.
butter);
– Environmental care;
– Plant and animal health and animal welfare.
 Reinforced by marketing standards:
– “extra virgin” olive oil;
– “Class I” for fruit and vegetables;
– “free-range” for eggs.
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Consultation - Question 1
 …
 Obligatory indication of the place of farming
[popular but complications for “processed”
and if it’s a GI].
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Consultation - Question 2
 How does laying down product identities in
marketing standards affect consumers, traders and
producers? What are the benefits and drawbacks?
[consumer information, consumer protection,
competition, market transparency]
 Should the retail sale of products that do meet
hygiene and safety requirements, but do not meet
the marketing standards for aesthetic or similar
reasons be allowed? Majority – yes. If so, should
such products require specific information for the
consumer? [ideas non-standard products] [some
want “compulsory”]
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Consultation - Question 3
 To what extent is it necessary to lay down
definitions of optional reserved terms in
marketing standards at EU level ? [Yes]
 … farming methods. [Yes e.g. mountain]
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Consultation - Question 4
 To what extent could the drafting, implementation
and control of marketing standards (or parts of
them) be left to self-regulation? [No; - market
transparency; - lower quality; - distortion of
competition]
 If marketing standards (or parts of them) remain
governed by EU law, what would be the advantages
and disadvantages, including in respect of
administrative burden, of:
– using co-regulation (example fruit juices –
competition/CODEX);
– referring to international standard (OJ C);
– keeping the current legislative approach (while
simplifying the substance as much as possible).
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Arguments raised
 For:
– Facilitating trade;
– Ensuring transparency of market
operations;
– Simplification;
– Reduction of costs (e.g. grading costs or
costs of controls if regulated in detail);
– Potential for merger with issues such as
food safety.
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Arguments raised
 Against:
– Fear of decrease in quality;
– Fear of pressure on producer prices if the
total quantity marketed increases;
– Poorer market (price) transparency due to
inability to compare;
– Vacuum – proliferation of heterogeneous
private standards.
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Ongoing evaluation
 To what extent “specific” marketing standards are useful or not
for: producers, traders & packers, retailers and consumers.
 Arguments for and against repealing specific standards:
– Bananas (status: historic specificity)
– Apples (long life) – currently maintained
– Peaches (short life: frequent market crisis, high price
variations, maturity problems) – currently maintained
– Mushrooms (repealed as of 1 July 2009)
– Asparagus (conformity problems, direct consumption)
(repealed as of 1 July 2009)
– Potatoes
 Contrasting market situations: producers, trade,
retail (supermarkets, shops, local markets).
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Ongoing evaluation
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Several themes:
1. Quality – Impact of the specific
marketing standards on the quality of
the products put on the market.
i. Uniformity of product v gustative quality;
ii. Diversity of products marketed (including
bio-diversity, lower quality);
iii. Flexibility on (new) presentation(s) and
mixtures.
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Ongoing evaluation
2. Quantity – repeal = more product ?
– Side effects for processors.
3. Transparency
– Different grades, sizes;
– Price comparisons;
– Market segmentation;
– Changes in transaction costs ?
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Ongoing evaluation
4. Price developments:
– Farm gate, trader/packer, retailer,
consumers
5. Specific grading costs for operators
6. Regulatory & Administrative burdens
including controls
7. Private standards (more & more
heterogeneous) : impact
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Miscellaneous
 A specimen marketing standard in detail:
– incl. 10% tolerance etc.
 Impact on trade
– Pineapples D retailers, developing countries
– Rungis mission report
 Provisional Member State reactions
– Need to be cautious & keep the benefits:
• Simplification (DE);
• Flexibility (ES);
• Leave it to the market (DK, SW, UK).
 Initial positive reactions to the idea of
– “Reserved terms”: Category II, I, “Extra”;
Mountain…
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A recent example
 Background milk = Mammal ≠ Soya .ilk
 Drinking milk (reserved terms)
– Whole ≥ 3.5%
– Semi-skimmed 1.5 – 1.8%
– Skimmed ≤ 0.5%
 Optional X % for example for 1.2%
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Miscellaneous
 Certification schemes (private)
– Producers (domestic, European, 3rd countries,
including developing countries).
– Baseline schemes;
– Business to business (integrated, including
record keeping, health, “quality”).
 N.B. all certification = baseline + (or > baseline)
– A cost and an opportunity (“customer is king”).
 Happens anyway:
– “Cahier de charges”, supermarkets;
– Ordinary retailers;
– Markets.
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Miscellaneous
 What about other certification schemes –
I mean those which are not run by the
European Union ?
 “Clear”
 A firm, light touch = practical guidelines
 + for marketing standards
 ? Replace all by a general standard ?
 ? (including origin) ?
 Complemented by optional reserved terms
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Final remarks
 The main lines to discuss and reflect upon:
– Support for producers (via meeting consumer
aspirations);
– Consider a shift towards more “general” rules
with the detail being defined (voluntarily) by
sectorial interests;
– The coherent development (definition) of
“reserved terms”, including common ideas such
as “traditional” or “mountain” or “Extra”;
– “Place of farming” according to need and
opportunity;
– Policy coherence;
– Simplification (from all viewpoints: producers,
consumers, intermediaries, regulators).
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