Association calls for boost in productivity, innovation

- Last updated on GMT

Related tags: Ciaa, European union

The EU's food and drinks sector is in danger of losing its market
share unless more is done to boost its competitiveness, says a body
representing the industry - which also supports a reduction in
domestic subsidies for its members.

Citing a slow down in productivity growth and low innovation in the development of new processed products, the Confederation of the Food and Drink Industries​(CIAA) said the industry needs more help from the European Commission if it is to face the increasing competition from Asia, South America and the US.

In a memorandum to the UK's prime minister Tony Blair, who takes over the EU's presidency​ today, the CIAA said the organisation supports the bloc's programme of reducing domestic support for the sector.

The association called on the EU to do so by increasing support for exporters and by opening access to cheaper agricultural imports. The issuesare due to be discussed at a World Trade Organisation meeting in December this year.

The phasing out of export refunds for food products should be conditional upon a similar treatment of other export support measures, such as export credits, food aid and the functioning of state trading enterprises, the CIAA stated.

"Since these export refunds compensate for higher EU agricultural prices, their elimination will result in exports no longer being viable in certain sectors of the food industry, unless this change is accompanied by the necessary internal market reforms and access is granted to competitive agricultural raw materials," the CIAA stated.

The industry's participation in the bloc's research and development also needs to be strengthened. The CIAA also called on the European Commission to simplify the regulatory system, which isconstraining companies' ability to process, distribute, sell and export their products.

The industry body called on the European Commission to reduce the time and the cost of getting regulatory approval for novel foods. The legal provisions on additives should be eased to adjust totechnical progress. The large number of provisions on food labelling need to be brought up to date, simplified and consolidated.

New regulations need to be preceded by assessments on their impact, weighing up the costs against the benefits, the CIAA said. Legislative proposals should support innovation and productdevelopment.

The CIAA called for an easing on regulations relating to legal additives so as to adjust for technical progress in the area. Current proposals on nutrition and health claims should not hold backproduct development. Voluntary initiatives should be encouraged instead of developing new regulations and the definition of waste definition needs to be clarified.

"The EU food and drink industry's future lies in the production of value-added-food and drink products,"​ the CIAA stated.

All food and food ingredients must be excluded from the scope of a proposed EU regulation requiring the registration of chemicals used in manufacturing processes. Under the proposed new systemcalled Reach, companies that manufacture or import more than one tonne of a chemical substance per year would be required to register it in a central database.

In the area of international trade, the EU food and drink industry is constrained by the increasing level of safety regulations and technical barriers. The CIAA is calling on the EuropeanCommission to use bilateral agreements to target specific growth areas for the industry as a complement to the current multilateral approach to easing the barriers.

The EU Commission may also have to implement agreements relating to food safety through regulatory cooperation with foreign authorities, the CIAA suggested.

The EU food and drink industry sector is the largest manufacturing sector in the 25-member bloc, with a turnover value of around €800bn in 2003 and employs four million people. The sectorpurchases and processes 70 per cent of the EU's agricultural production. Exports of food and drink products add up to €45bn a year.

The UK assumes the six-month presidency of the EU's Council on 1 July. The prime minister, Tony Blair has said among his priorities are issues on trade the Common Agricultural Policy, food safety, nutrition and obesity and the environment.

"These priorities have direct impact on the development and competitiveness of the EU food and drink industry,"​ the CIAA stated.

Related topics: Processing & Packaging

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