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Regulation roundup

August 13th, 2010

Confectionery Production looks at the latest regulatory developments in the EU and the World Trade Organisation

The European Food Safety Authority (EFSA) panel has refused to set an advisory limit for the intake of sugar by European Union consumers. EFSA´s panel on dietetic products, nutrition and allergies has concluded in a comprehensive assessment of dietary requirements for EU consumers “there was insufficient evidence to set an upper limit for sugars”. This, it said, was because the possible health effects of eating sugar and sweet foods was “mainly related to patterns of food consumption – such as the types of foods consumed and how often they are consumed – rather than a relation to the total intake of sugars itself.” This is despite the fact the panel agreed high sugar intake increases tooth decay risk. Policymakers should try and influence the kind of sweet foods people eat rather than the amount of sugar, said the panel.

Colouring rule

Separately, EFSA has ruled that the maximum acceptable daily intake of confectionery and bakery product colouring Brown HT (E155) should be halved to 1.5 milligrams per kilogram of bodyweight (mg/kg bw). This is because of adverse effects – such as slightly reduced weight gain – in animal tests of the additive.

Meanwhile, the EU Council of Ministers has accepted new EU purity criteria for the sweetener neotame, which would under a proposed regulation be 97 per cent pure or more. It is manufactured by reacting aspartame with 3,3-dimethylbutyraldehyde in methanol using a palladium/carbon catalyst under hydrogen pressure.

Investment news

The European Investment Bank (EIB) will lend €15 million to Omnicane to build two sugar refineries in Mauritius, also improving sugar storage and handling facilities, while extending an existing mill.

Meanwhile, the European Bank for Reconstruction & Development (EBRD) is lending $1.2 million (€953,000) to one of the largest ice cream producers in Turkmenistan, to help expand its distribution network and build its brand. Privately-owned Salkyn produces more than 70 types of ice cream. The loan will help Salkyn buy new retail fridges and refrigerated chambers in its regional distribution hubs.

Russia and Turkey

Also, the European Bank for Reconstruction & Development (EBRD) has released plans to invest €10 million in Russian cake and pastry maker the Hlebprom group. The money would help buy and install new production equipment to boost efficiency and hygiene in the production and packaging process.

It is also planning to lend €40 million to Turkey based Continental Confectionery Company (a joint-venture between Turkey’s Ülker Group and Denmark Gumlink). The money will help investments in a new chewing gum and edible confectionery factory.

By contrast, the European Commission is still pumping money into reducing the amount of sugar produced in the EU budget year 2009 into 2010 for the Sugar Restructuring Fund, which helps European sugar producers switch to making and growing different food products.

Meanwhile, a Commission report on the €26.3 million spent by the EU on improving European honey production has unveiled shortcomings in the management of this spending programme. It calls for “better collaboration between Member States and beekeeping organisations” when planning how to spend this money. It added, “The organisations regret, in particular, that in some cases the lack of collaboration has resulted in the budget not always being used in the most appropriate manner.”

In marketing, the European Commission has continued to expand its list of confectionery and sweet bakery products protected under EU geographical indication legislation. Slovenian cake “Prekmurska gibanica”, a Spanish tart “Tarta de Santiago”, the French apple “Pommes des Alpes de Haute Durance” and the Italian apple “Mela di Valtellina” cannot henceforth be sold in the EU unless produced in their historic home regions using traditional production methods.

Safety concerns

There has been a new variant on safety concerns about selling confectionery-imitating products. Bulgarian regulators banned the sale of a Turkish deodoriser branded Erfres, which was sold as oval white bonbons and “can be confused with a foodstuff by children and swallowed”, warned EU consumer alert service Rapex.

At the World Trade Organisation (WTO), Brazil and India have said they are making good on commitments to open their markets duty-free to the 49 poorest countries worldwide, with the confectionery industry benefiting. New Delhi and Brasilia said cocoa and sugar were key exports that would benefit.

Brazil said by mid-2011, 80 per cent of tariff lines for exports from these mostly African and south Asian countries would be duty free; India said governments had to ask for this status – so far only 14 had – and it wants more applications.

In Washington DC, the Us Trade Representative (USTR) office has reallocated its low duty import quotas for sugar covering 2010, giving more market access to countries with a ready supply of exports. The Dominican Republic was given an additional 15,262 tonnes in quota; Brazil 12,574 tonnes; The Philippines 11,709; Australia 7,197; and Guatemala 4,162, out of a reallocation of 81,946 tons to 25 countries.

Next year, the USA global tariff rate import quota for raw sugar will increase by 200,00 tons, although American sugar producers and users had expected a larger increase. US sugar and producer organisations have been pressing the USTR for an early announcement of details of the 2011 quota to ease arrangements for imports.

World sugar prices

Looking at global prices the UN Food & Agriculture Organisation and the Organisation for Economic Cooperation & Development have predicted world sugar prices to 2019 will be above the average of the previous decade but well below the 29 year highs experienced at the end of 2009. Their latest medium-term market assessment says that unlike some other commodities, sugar prices did not rise steeply in 2007/08 by 10-20 per cent.”

Meanwhile, cocoa and sugar exports from Brazil to the EU could get a boost if free trade talks reopened between the European Commission and the Mercosur trade block in South America (also including Argentina, Paraguay and Uruguay) are successful. They were suspended in 2004, after nine years, but Brussels is now hopeful of success.

The Commission has also asked EU ministers to suspend until December 2014 all EU duties on any imports of sweetened dried cranberries, because of a European supply shortage.

And, tying up a loose end, the Commission has announced it is spending €190 million in aid to improve banana production in its Caribbean, African and Pacific suppliers – this was part of the December 2009 agreement that ended the long running WTO trade dispute over banana supplies.

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