Mondelez International, the parent company of Cadbury, is urging the EU to delay its deforestation law by one year. The company cites soaring cocoa prices, declining production, and digital infrastructure gaps in producing countries as reasons for the requested delay, aiming for a more practical and effective implementation of the regulation.
Mondelez Calls for EU Deforestation Law Delay: Why?
The EU's Deforestation Regulation (EUDR) is facing pushback from a major player in the food industry. Mondelez, the company behind Cadbury chocolate, is calling for a year-long delay in its implementation. This request raises questions about the feasibility of the law and its potential impact on supply chains and consumers. Let's delve into why Mondelez is asking for this delay and what it could mean for you.
What this deforestation law means
Imagine you're popping to the shops for your favourite bar of chocolate, but the cocoa used to make it came from farms that used to be forests. That's the heart of the issue. Deforestation is when companies chop down forests to make space for farms growing things like cocoa beans, soy, or for raising cattle. The European Union (EU) isn't happy about this, and rightly so. Forests are essential for cleaning our air and keeping the planet in good nick.
Ending deforestation through EU consumption
The EU Deforestation Regulation, or EUDR, aims to stop EU consumption from driving deforestation globally. The ultimate goal is ending 10% of global deforestation fuelled by EU consumption. The EU is essentially trying to ensure that what we buy doesn't contribute to cutting down forests elsewhere.
Affected products and traceability requirements
This law basically says that if you're selling things like chocolate, coffee, or beef in the EU, you've got to prove you're not contributing to deforestation. Here are some of the key commodities covered:
- Soy
- Beef
- Cocoa
- Coffee
- Palm oil
- Wood
Companies need to prove their supply chains are deforestation-free. Think of it as needing to show a receipt proving you didn't, in fact, steal that tree! If you can't, you could be slapped with some hefty fines.
Why Mondelez wants a delay
Mondelez aren't against stopping deforestation. They get the idea behind the EUDR. But they're worried about how it'll actually work, especially for the cocoa industry.
Cocoa sector pressures
According to Massimiliano Di Domenico, a bigwig at Mondelez, the cocoa sector is "under huge pressure." Cocoa prices are climbing, and production is falling. Plus, in many places where cocoa is grown, the tech just isn't there to properly track where the cocoa comes from. It’s like trying to find your way around London without a map or a phone. Good luck with that!
These gaps make compliance difficult and could disrupt supply chains.
Avoiding ambition dilution
Mondelez supports the EUDR in principle. The delay aims to enable practical, inclusive, and effective implementation, not to weaken the law's goals. In Di Domenico's words, they want to enable "practical, inclusive, and effective implementation."
They don't want to weaken the law; they just want to ensure it can actually be implemented properly.
How this affects consumers
Right, so why should you care about all this tree-hugging and cocoa-tracking? Well, if Mondelez's worries aren't taken seriously, it could mess with the price and availability of your favourite chocolate bars. It also highlights how tricky it is for companies to make their supply chains more sustainable. It's not always easy to know where every single ingredient comes from and make sure it's not linked to deforestation.
Potential price increases for chocolate
If the EUDR causes problems with the cocoa supply, your Cadbury's treats might become more expensive or harder to find down at the shops. Nobody wants that, do they?
Rising cocoa prices and compliance costs could translate to higher prices for chocolate products. The delay could mitigate immediate price shocks.
Supply chain disruptions
There is a risk of supply chain disruptions if companies struggle to comply with the EUDR. The delay aims to provide more time for adjustments and prevent shortages.
Even Nestle, Mars Wrigley, and Ferrero – some of Cadbury's biggest rivals – are on board with the EUDR but have asked for clearer instructions from the EU. So, it's not just Cadbury's feeling the pinch; the entire chocolate world is trying to figure out how to meet these new rules.
What happens next
This whole shebang also highlights how tricky it is for companies to make their supply chains more sustainable. It's not always easy to know where every single ingredient comes from and make sure it's not linked to deforestation.
EU's response to the request
The likelihood of the EU granting the delay, considering previous delays and industry criticism, is uncertain. The EU has already pushed back the launch to December 2025, after a few grumbles from trading partners.
Preparing for the future of EUDR
Companies need to continue working towards compliance, even with a potential delay. Transparency and sustainable sourcing are also crucial.
Key Points to Remember
- Mondelez, the company behind Cadbury, wants a year's delay to the EU's deforestation law (EUDR) because they're worried about the cocoa industry.
- The cocoa industry is facing rising prices and falling production, making it harder to meet the EUDR's demands.
- The EUDR is all about stopping deforestation linked to things we buy in the EU, like chocolate, coffee, and beef.
- A delay could give cocoa farmers and companies more time to get the right systems in place to track their cocoa and make sure it's not contributing to deforestation.
- If the EUDR causes supply chain issues, it could affect the price and how easy it is to get your hands on chocolate.
- The EU has already pushed back the launch of the EUDR by a year to December 2025, after a few grumbles from trading partners.