A fifth of UK food businesses are still not ready for the EU’s strict new anti-deforestation laws, new research showed.
The bloc’s new Deforestation Regulation (EUDR), which will be fully implemented on 30 December 2024, will affect businesses trading a variety of commodities, including coffee and cocoa, both in and with the EU.
But just over eight months from the monumental rollout – one of Europe’s largest regulatory efforts in the fight against the climate crisis – British companies are still struggling with tracing back their products to farm level, new data from supply chain software specialist Foods Connected shows.
Around 73% of large-scale food businesses are still facing challenges in tracking where their produce and raw materials come from, while a fifth overall said they were not ready for EUDR specifically, according to the research findings.
Foods Connected surveyed 250 food firm bosses of medium and large-scale firms in the UK on what the biggest challenges were in enabling full transparency within their supply chains right now, and whether they felt they would be ready for when the new regulations come into force.
“At a very basic level, some businesses still don’t really understand that they need visibility of their supply chains and how supply chain visibility is at the core of traceability,” said Stephanie Brooks, head of business traceability innovation at Foods Connected.
“Historically, supply chain traceability has been very reactive – when we’ve had a recall incident or a complaint – but as we move into EUDR territory, it needs to become proactive,” Brooks added.
Read more: How will the EU’s deforestation law affect UK commodity markets?
As part of EUDR compliance rules, food companies will have to provide very specific and detailed information about the sourcing of commodities used in their products, such as satellite imagery and geolocations of plantations.
Food traders face fines of up to 4% of their revenues if they don’t comply with the new requirements.
But 30% of businesses “have not invested into new technologies at all when it comes to data tracking – still depending on paper trails for example – and this is going to cause issues when they are expected to perform spot checks by EUDR officials”, Brooks warned.
Foods Connected’s research also showed that, on average, medium-sized companies were more prepared for the regulations compared to small and large-sized companies.
Smaller businesses, such as artisan chocolate makers or farmers buying soy to feed their cattle, don’t always have full visibility of their entire chain, often buying from different middlemen or larger suppliers.
At the same time, bigger businesses such as the mults or large manufacturers tend to have hugely vast and complex supply chains, with thousands of players involved.
Foods Connected said there was a “real commitment” from UK businesses to hit the deadline, but noted several disruptive events of recent years – including the pandemic, the war in Ukraine and the Red Sea attacks – had led to many “competing priorities” in food and drink supply chain operations.
Read more: UK government to roll out EU-style deforestation laws
“The external pressures of the last few years, from the pandemic and Ukraine war to notifiable disease outbreaks such as avian influenza, have all had a massive impact on the food industry supply chain,” said Fiona Roberts, head of business, animal welfare, compliance & environment at Foods Connected.
“So it’s not that EUDR has been put on the backburner, but there has been a sequence of issues that have posed challenges to quite well-established supply chains where businesses have had to scramble to look for solutions,” Roberts said.
Brooks added the lack of awareness around traceability was “concerning”, and it was vital to “fill in any gaps for UK retailers and suppliers in light of the upcoming regulations coming into force this year”.
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