Agri-food firms say new labelling rules threaten business

Nearly a quarter of Irish food and drink companies say new EU labelling regulations, due to come into force in December, will stop them investing in their brands.

The survey, carried out by Amarach Research, also found that 15 per cent of businesses said they may transfer their manufacturing to other locations as a result of the changes.

The new labelling rules compel food companies to provide more detailed nutritional and country-of-origin information on the packs of their products.

They represent the first major overhaul of Europe’s food labelling rules in more than 30 years, and are aimed at helping consumers make more informed choices.

They also come on the back of a series of food scandals that have damaged the reputation of Europe’s food industry.

Companies, however, say the regulations are excessive and compliancy willresult in significant additional costs, placing them at a competitive disadvantage with international rivals.

Amarach’s survey was based on the views of more than 100 senior decision makers in Ireland’s agri-food sector.

It found that 75 per cent of firms felt compliance with the new legislation had already resulted in significant additional costs such as labelling and staff training.

It also found that 90 per cent of firms expected to be singled out for more regulatory and legislative change in the future.

The survey’s findings were released to coincide with conference on intellectual property in Dublin today, which was attended by more than 200 business leaders and brand managers working in the sector.

Gerard O’Neill of Amarach Research said the survey indicates that the Irish business community is worried about the impact “excessive regulation”, and in particular threats to intellectual property (IP), will have on their brands and their businesses.

“Three out of four say such compliance has already resulted in significant costs while more than half - 56 per cent expect to face significant costs to become compliant with emerging and future legislation. After labelling, staff training is the main outlay followed by lab testing” he said.

Mr O’Neill said that in light of these increased costs and regulation companies were clearly considering all their options. He said these could have serious repercussions not just for the sector but for the country as a whole.

“Many of these companies have intellectual property such as trademarks, brands and recipes which they consider important to their future and the fact that up to one in four expects to stop investing in food and drink brands must be of concern,” he added.