EU Moves Against Vegetable Oil Producers – and Against the Interests of Consumers and Producers

Yesterday, a provision to label the origin of vegetable oils was adopted by the Environment, Public Health and Food Safety Committee in the European Parliament.

The provision was adopted during a vote by MEPs on amendments to the regulation on Food Information to Consumers. The purpose of the regulation is to offer better nutritional information to consumers and is in a second round of negotiations after MEPs disagreed with the Council – including on the labeling of vegetable oil sources. In rejecting the original amendment, the Council cited the incompatibility of the amendment with the intent of the regulation, as it is motivated by environmental rather than health concerns.

As pointed out in an earlier blog, mandatory vegetable oil origin labeling is bad for palm oil producers, European businesses and consumers, and is being pushed by a small number of MEPs who are ideologically aligned with environmental NGOs and the European Association of Zoos and Aquaria. While MEPs have been concentrating on other high-profile issues, a Green-Left coalition has been able to push this provision forward despite it not offering any nutritional value and representing harmful additional costs to business and consumers. MEPs have ignored the advice of vegetable oil producers and European industry, so we must hope that the Council is listening as negotiations between the two institutions continue.

The implications of this provision to domestic and international commerce cannot be overemphasized, as supply chains are rendered inflexible and businesses are limited in choice by the cost constraints of labeling. Meanwhile, it is an issue of concern for net exporters of vegetable oils such as Malaysia as an important supplier to the EU vegetable oil market. In fact, the EU is currently negotiating details of a Free Trade Agreement (FTA) with Malaysia. With palm oil accounting for about 5% of Malaysian exports to the EU, any trade agreement will require particular consideration for the commodity.

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Written by The Oil Palm