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Food industry calls for more reforms to help boost returns

By Ahmed ElAmin, 20-Jun-2007

Investment in research and development, less red tape, access to cheaper raw materials, and export growth promotion are the issues the EU's food industry wants Portugal to address as the country takes over the reins of the bloc's presidency

The proposals are the main ones listed in the latest memorandum issued by the Confederation of Food and Drink Industries of the EU (CIAA).

The document serves as an outline of the group's agenda for lobbying the European Commission and politicians. The CIAA issues such memorandums as proposals to the country that takes over the leadership of the EU presidency every six months, in this case Portugal, which takes over from Germany on 1 July.

The EU has been in the process of placing the food industry under increasing regulatory control, mainly due to public concerns about safety, quality and the amount of information it receives about the products they eat.

In general, the CIAA's general stance has been toward attempting to hold back the tide of legislation in favour of self-regulation.

In the latest document the CIAA says that more investment in research and innovation is needed to move the industry toward more value-added products.

The document also called for a better, simpler and more proportionate EU regulatory framework to reduce administrative burdens.

"The EU's food and drink sector is still hampered in its development by a legislative

environment, which is not conducive to innovation," the CIAA stated. "The better regulation approach has not yet met expectations and experience with impact assessments have triggered concern as to the credibility of the approach."

Another squeeze on the industry is the increasing price of agricultural raw materials. Processors are behind the reduction in subsidies to farmers available through the Common Agricultural Policy (CAP).

The reforms have been working to make the agricultural market more market orientated, the association stated.

"However, different factors that influence production and prices need to be given greater attention," the CIAA noted.

The CIAA also called for an EU trade policy that provides new market opportunities in rapidly growing economies.

"The EU food and drink industry must be able to find further growth outside the EU," the CIAA stated. "Therefore both multilateral and targeted bilateral approaches need to be pursued."

Other issues outlined in the document include those on biofuels, quality schemes, novel foods and ingredients, additives and enzymes, additives and flavourings, enzymes, nutrition and health claims, vitamins and minerals additives, and labelling and obesity.

The EU food and drink industry is a highly fragmented sector, with about 50 per cent of total turnover attributed to small and medium sized companies.

"Concentrated retail and distribution sectors are putting strong pressure on the EU food and drink industry's competitive position," the document noted. "All these factors contribute to a number of constraints that need to be overcome when addressing these challenges with a view to enhancing competitiveness and sustaining

growth."

The EU's food and drink manufacturing sector has an annual turnover of €815bn, with exports of €53bn.