Food costs will now be even more expensive

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According to the Food Industry Trade Association, national origin labeling will continue to fuel food inflation.

“We are experiencing the strongest wave of inflation in 40 years. Food costs are going through the roof. Right now is the worst possible time for new mandates, which are driving up costs even further for domestic producers. This is further fueling food inflation. Who is taking political responsibility for this?” criticizes Katharina Koßdorff, Managing Director of the Food Industry Association, on the occasion of the appraisal of two regulations for a purely national regulation on origin labeling for food.

“At a time when we are dealing with volatile commodity markets, disrupted supply chains, and uncertain supplies of natural gas due to the Corona pandemic and the war in Ukraine, we are wondering if priorities are being set correctly in agricultural and food policy,” Koßdorff puts things in perspective.

Mandatory labeling of the origin of the raw materials used according to their specific country or region of origin would require an enormous amount of organizational and technical effort and thus very high costs in the case of processed and packaged foods. As a national solo effort in contradiction to applicable EU law, the planned origin labeling for meat, milk, and eggs as primary ingredients in processed foods and mass catering exclusively affects domestic producers (“national discrimination”). The regulations do not cover imported food from companies abroad.

This means that only Austrian producers will have to bear the costs of purchasing raw materials separately according to the origin, separate storage and logistics, different processing,g, and individual labeling. In addition, there is the expense of ongoing changes to packaging if, due to poor quality or quantities, interrupted supply chains, or a supplier default, it is necessary to quickly switch to raw materials of a different origin than is indicated on the label.

Since domestic agriculture does not supply sufficient quantities of agricultural raw materials for Austria to be completely self-sufficient, we are dependent on imports. Thus, if the origin of the ingredient used changes, the labeling on the packaging for the domestic market and in all languages for all export markets must be adjusted on an ongoing basis. Failure to do so may result in penalties from the authorities. The packaging material may no longer be used and must usually be disposed of – a loss of resources in times of sustainability. New packaging material is currently only available after a delivery period of several months.

Foreign producers save themselves this additional expense but compete directly with domestic products on supermarket shelves. “In the final analysis, this means that imported products can be offered at lower prices than domestic foods – what a disservice to our domestic food industry,” says Koßdorff.

In addition to the wave of inflation, the fact that the EU will already present its proposals for extended, EU-wide uniform origin labeling for foods such as milk or meat in the fall of 2022 (!) also speaks against the regulation of the German government. This will further extend the already comprehensively applicable EU regulations on origin labeling.

Currently, measures against the wave of food price increases and for a secure food supply are being publicly discussed. For the food industry, one thing is sure: “Successful agricultural and food policy for affordable and sufficient food cannot be achieved with national solo efforts in food labeling. On the contrary, only a level playing field for all producers and the same information standards for consumers in a functioning EU single market can create stability and trust in the markets. Especially now, in the ongoing economic crisis and uncertain natural gas supply, our food industry urgently needs to be relieved of manufacturing costs and not burdened with further requirements. Only a strong food industry in our own country can reliably secure the supply of the population with good, sufficient, and, above all, affordable food. Political decision-makers should pay close attention to this,” says Koßdorff.

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