Farmer not prepared
Association fears possible coffee shortage from 2025
March 9, 2024, 9:58 a.m
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An EU regulation should ensure deforestation-free supply chains. But the coffee industry sees the danger that coffee could become scarce as a result. The EU Commission disagrees.
The coffee industry in Germany believes that the coffee supply will no longer be guaranteed from next year as a result of a new EU regulation. “We are threatened with an undersupply on the German and European markets. The prices for the coffee that is still available will rise significantly,” said the German Coffee Association. The EU Commission contradicts this. When asked by the German Press Agency, the authority said it was not aware of any facts that the regulation would increase food prices. A very limited impact on the prices of the raw materials covered by the regulation is expected.
Holger Preibisch, the managing director of the coffee association, is calling for the application of the EU regulation to be postponed. Otherwise, the existence of millions of coffee farmers around the world would be threatened. It’s about the EU regulation for deforestation-free supply chains that came into force last year and applies from December 30th. The “Lebensmittel Zeitung” had already reported on the association’s concerns on Friday.
In the future, the regulation will require companies to submit a due diligence declaration that no forest was cleared or damaged for their product after December 31, 2020. This not only applies to raw materials such as cocoa or coffee beans, certain secondary products such as chocolate, leather or furniture are also covered. Anyone who does not comply with the regulations must expect high penalties of at least four percent of their annual turnover in the EU.
Postpone the regulation?
The coffee association, which represents around 360 companies and organizations, says it supports the content of the regulation. However, it is not possible to fully provide the required data by the end of 2024. “Currently only around 20 percent of farmers meet the requirements,” said association managing director Preibisch. He also complains about the bureaucratic effort. Both traders who import coffee and roasters purchasing coffee would have to carry out a risk assessment of the data for each delivery and send it to the EU. Because of the political structures in some producing countries, it is difficult to obtain the information and there is still a lack of a suitable interface.
In a letter to the federal government, the industry recently urged that the application of the regulation be postponed. When asked, the responsible Federal Ministry of Food and Agriculture stated that it would work to find solutions in Brussels. “In the area of coffee trade, there are currently still hurdles to fully implement it by the end of the transition period. This includes the fact that the traceability of conventional, non-certified coffee cannot currently be implemented in all cases back to the farm,” said one Speaker.
The commission proposed the law in November 2021 and also examined the effects of the project. The research reportedly concluded that the costs to companies of regulations were significantly lower than the expected benefits. These include access to the EU market and increasing demand for sustainable products. In addition, there is more time, especially for small and micro-enterprises, before they have to comply with the law.
Germany is the second largest coffee importer in the world
In addition to the industry association, large coffee manufacturers are also critical of the new EU regulations. Johannes Dengler, member of the management team at Dallmayr Kaffee, speaks of a “grotesque administrative burden” for companies and farmers. The regulation is likely to cut off small farmers like those in Ethiopia from the European market. The Commission emphasizes that supporting small farmers is a priority. The law does not discriminate against producers from third countries and there are no hidden restrictions on trade.
The coffee roasters Lavazza, Melitta and Darboven (“Idee-Kaffee”, “Mövenpick”) announced that they wanted to comply with EU law, but that more time was needed. “The consequences will be a clear shortage in the supply of green coffee and prices will rise as a result,” said a spokeswoman for Darboven.
The CDU MEP Peter Liese does not see the situation as tense and personally fears no coffee shortage from the turn of the year. But he understands the industry’s concerns. Above all, it is important to implement climate protection goals. He is therefore prepared to be flexible when it comes to deforestation-free supply chains. “Personally, I am also of the opinion that changing the legal basis after the election towards more pragmatism is a conceivable option,” he told the German Press Agency.
According to the coffee association, Germany is the second largest coffee importer in the world after the USA, with 1.1 million tons per year. The green coffee comes from 15 to 20 countries, with the majority coming from Brazil (30 percent) and Vietnam (20 percent).