Economy & Trade, Headlines, Latin America & the Caribbean

#10/10/1997 18: 25

Niccolo Sarno

BRUSSELS, Oct 10 1997 (IPS) - European parliament members have given their blessing to an European Union directive which, if endorsed by member states, will pull down cocoa prices on the world market with potentially disastrous consequences for Third World far mers.

The directive seeks to permit the use of cheaper vegetable fats instead of cocoa butter in the production of chocolate; a ruling that could spell an end to a 23 year fight to preserve the exclusive use of imported cocoa in ‘real’ chocolate.

A special committee of the parliament endorsed the directive on the use of vegetable fats in chocolate subject to suitable labelling.

“The (parliament’s) Environment Committee was cowardly in confronting the interests of the chocolate multinationals and the (European) member states which have already authorised the use of vegetable fats,” said Green Euro parliamentarian Paul Lannoye.

Seven EU countries currently allow the use of up to five percent vegetable fat in the production of chocolate; eight stand by the traditional cocoa only method. However, the former group accounts for 71 percent of total EU production today.

The chocolate crazed EU consumes 40 percent of the world’s cocoa and imports 85 to 90 percent of this from West Africa. Changes in EU rules will have immediate repercussions on the economy of the region’s countries.

The International Cocoa Organisation estimates that if the EU adopts the directive, EU cocoa demand would decrease by 124,000 to 200,000 tonnes per year, pulling down African producers’ revenues by 12.4 to 20 percent.

In West Africa, 1.2 million farmers live from cocoa and some 11 million people are dependent on income from cocoa. Thirty-one of the 70 members of the African, Caribbean and Pacific (ACP) group of states depend to a greater or lesser extent on their coco a exports. The ACP is already steeling itself for an end to EU trade and aid programmes in the year 2000.

Georges Ballou, first counsellor at the Embassy of Cote d’Ivoire here, said that “it would be paradoxical that the EU, which supports developing countries, allows the adoption of such a directive.”

Cote d’Ivoire is the world’s largest cocoa producer, with an average annual output of around a million tonnes, or about 41 percent of annual world production.

The agricultural trade deficit of the African countries would inevitably deteriorate, increasing their food imports bill. In addition, the competition from the EU’s giant chocolate producers would soon bring the United States to align itself with EU stan dards, resulting in a fall in exports to the U.S. as well.

Ghanian diplomats say that if the demand for cocoa beans falls by 10 percent, then, due to the speculative nature of the cocoa market, prices would fall between 20 and 30 percent, with the consequent drop in cocoa farmer’s income. In Ghana 50 percent of the working population depends on cocoa in some way, and 43 percent of national income is derived from cocoa production.

The European parliament committee decided Thursday to approve the directive, ruling that chocolate using fats other than cocoa butter need only add an additional statement to the packaging, adjacent to the ingredients list, to inform consumers that fats

other than cocoa were used.

But current scientific methods do not allow precise measurement, say critics. Even the best method to detect the presence of vegetable fats over cocoa butter, gas chromatography, has a margin of error of about 30 percent.

“The EU cannot adopt a directive which relies on data based on such a detection technique,” said Bird Bowen of the European Fair Trade Association.

The Parliament’s plenary session will vote on the directive later this month, and a final proposal will then go to the Council of Ministers.

The price of cocoa butter component in chocolate accounts for about eight to nine percent of the total price of the chocolate. Manufacturers could reduce cocoa usage up to two percent with problem by using other vegetable fats and drastically decreasing

costs.

“The sole objective of those pushing for the directive is to increase their profits by taking advantage of price differences between cocoa butter and other vegetable fats,” claimed a legal report commissioned by critics of the directive in September.

The report also says that the adoption of the directive would infringe on the EU’s legal obligations towards cocoa producing countries, such as the International Cocoa Agreement signed in 1993 and the Lome Convention trade and aid pact with the ACP.

“I am amazed by the power of the industrial lobby, apparently stronger than the 500,000 signatures we have gathered against the directive,” said Denis Lambert of the aid and lobby group Oxfam.

Six international companies account for 80 percent of the world chocolate market. Five of them are European: Nestle, Suchard, Mars, Cadbury and Ferrero, which account for 74 percent of world sales.

The right to use the designation ‘chocolate’ for a product containing vegetable fats other than cocoa butter has been resisted by traditional chocolate makers who fear that cheaper sweets using vegetable fats will outsell their products if they can be ca lled ‘chocolate’ as well.

 
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