US intervenes to boost competition in meat industry
The US government is set to invest in the country’s meat-processing capacity and “revitalise” trading rules, arguing Covid-19 has demonstrated the industry needs more competition.
Some US$500m of the Biden administration’s “Build Back Better” investment in US infrastructure will be used for new meat and poultry processing facilities.
A further $155m will be used to support existing smaller processors in the US meat industry in areas such as expanding capacity and the cost of inspection fees.
The plan will also see the US government look to strengthen the country’s Packers and Stockyards Act, a law passed a century ago to protect farmers from unfair trading practices.
In response, The North American Meat Institute, the trade body representing meat and poultry companies in the US, warned of the “unintended consequences” of looking again at the Act.
Nonetheless, US Agriculture Secretary Tom Vilsack said the Biden administration’s announcement was a reaction to how Covid-19 had “exposed a food system that was rigid, consolidated, and fragile”.
Vilsack added: “The investments USDA [the US Department of Agriculture] will make in expanding meat and poultry capacity, along with restoration of the Packers and Stockyards Act, will begin to level the playing field for farmers and ranchers. This is a once-in-a-generation opportunity to transform the food system so it is more resilient to shocks, delivers greater value to growers and workers, and offers consumers an affordable selection of healthy food produced and sourced locally and regionally by farmers and processors from diverse backgrounds.”
The US government argues agricultural markets in the country have become “more concentrated and less competitive”, leading to a “squeeze” on farmers and ranchers.
It points to the US meat industry and how 80% of the country’s beef market is accounted for by “four large meat-packing companies”. During the early months of the pandemic, when processing facilities were closed, farmers faced an absence of customers and store shelves were short of products, the administration argues.
The US government believes the “risks” facing the market would grow amid the climate crisis and concerns over cybersecurity. Last month, JBS, one of the four beef processors that account for 80% of the US market, was hit by a breach that affected operations in the country.
The proposed changes to the Packers and Stockyards Act will see the USDA “clarify the conduct” it believes breaks regulations. The department, meanwhile, said it will “address oppressive practices in chicken processing” and “reinforce the longstanding USDA position that it is not necessary to demonstrate harm or likely harm to competition in order to establish a violation of the Act”.
Julie Anna Potts, president and CEO of the Meat Institute, said: “President Biden’s executive order calling for USDA to change the Packers and Stockyards rules will have unintended consequences for consumers and producers. Government intervention in the market will increase the cost of food for consumers at a time when many are still suffering from the economic consequences of the pandemic.
“These proposed changes will open the floodgates for litigation that will ultimately limit livestock producers’ ability to market their livestock as they choose. These proposals have been considered and rejected before and they are counter to the precedent set in eight federal appellate circuits.”
PepsiCo unveils new healthy snack commitments in Europe
US food and beverages giant PepsiCo has outlined plans to expand its healthier snacking portfolio in Europe.
PepsiCo has revealed ambitions to sell more snacks that have scored highly on the Nutri-Score front-of-pack labelling system, which ranks products by their nutritional value based on a five-colour coded scale going from A to E.
The company wants to increase sales of snacks rated B or better by Nutri-Score tenfold by 2025 starting from a baseline of 2019.
The Walkers and Lay’s owner said it wants to diversify its snack portfolio to include healthier options, “learning from its success in growing sugar-free beverages”.
PepsiCo said this will make healthier snacks its fastest-growing food category over the next four years and it wants to expand this to a US$1bn portfolio by 2030.
The company has also committed to reducing the average level of added sugars in its beverages sold in Europe by 25% by 2025 and 50% by 2030.
It said the new goals will be achieved through the reformulation of existing products, expanding the company’s existing brands, including Lay’s Oven Baked, to more markets, and introducing new snacking ranges such as PopWorks, its newly-launched popped corn crisps range.
Silviu Popovici, CEO of PepsiCo’s European options, said: “Over the past decade, we’ve reformulated and launched new products to bring more options to consumers. As a result, in Europe today, almost one in three beverages we sell is sugar-free and we believe this trend will continue to grow over time. With this pledge, we can use our experience with sugar reduction to accelerate our shift to a healthier snacks portfolio.”
Just Food asked PepsiCo for further details on its commitments around the Nutri-Score labelling system, which has not been adopted in every European market.
Garrett Quigley, general manager and senior vice president, categories in western Europe at PepsiCo, said: “We are in favour of a single pan-EU labelling scheme. The current, fragmented situation is not satisfactory. It is costly and confusing to consumers.
“We have chosen to align our snacks portfolio commitments to Nutri-Score. We believe it is the most researched nutrition system available. We will be using this labelling scheme in those markets that have formally adopted legislation endorsing the scheme – and where it does not cause us commercial difficulty.
“We will continue to use other nutrition front-of-pack labelling schemes in markets where Nutri-Score is not endorsed and where existing alternatives are well accepted by consumers.”
Food giants sign up to new Foundation Earth eco-labelling scheme
A group of food manufacturers and retailers have signed up for a new project, Foundation Earth, which will see front-of-pack labels put on products to give an indication of environmental impact.
The initiative was the brainchild of the late UK food entrepreneur Denis Lynn, who set up UK meat group Finnebrogue Artisan. He died in a quadbike accident last month.
Through a pilot launch this autumn, non-profit organisation Foundation Earth will issue front-of-pack eco-scores on food and drink products. The labels will rate a product’s environmental credentials using a traffic-light scoring system devised by the consultancy Mondra.
The system behind the labels looks at farming, processing, packaging and transport. It assesses the environmental impact of a product based upon carbon (49% weighted), water usage (17%), water pollution (17%) and biodiversity loss (17%).
In parallel to the pilot will be a nine-month research and development programme, funded by Nestlé, that will combine the Mondra method with a system devised by an EU-funded consortium of Belgium’s Leuven University and Spanish research agency AZTI.
The consortium is brought together under the auspices of the European Commission’s food innovation initiative EIT Food. The aim of the programme is to prepare Foundation Earth for a Europe-wide roll-out in 2022.
“The Mondra and EIT systems are unique globally, in that they both allow two products of the same type to be compared on their individual merits via a complete product life cycle analysis, as opposed to simply using secondary data to estimate the environmental impact of an entire product group,” Jago Pearson, chief strategy officer at Finnebrogue, told Just Food.
Under the system, generic chicken nuggets would get a B label and blueberries a C, but the scores for individual products will vary depending on production methods.
Fonterra to sell off China JV farms
New Zealand dairy heavyweight Fonterra said it remains committed to the Chinese market despite it agreeing the sale of its two joint venture farms in the country.
The farms in Shandong province will be sold to Singapore-based AustAsia Investment Holdings for US$115.5m with the transaction expected to complete by the end of this month.
Fonterra, which owns the farms with a joint venture partner, has a 51% stake in the business and will receive NZD88m (US$62.3m) in total asset sale proceeds.
The sell-off follow the cooperative’s announcement last October that it was selling its two wholly-owned China farming hubs in Shanxi and Hebei provinces to Inner Mongolia Youran Dairy in April for NZD552m.
Fonterra CEO Miles Hurrell said the latest disposals align to its strategy of prioritising New Zealand milk.
“The sale of the JV farms allows us to focus even more on our farmer owners’ milk and follows the sale of our two wholly-owned China farming hubs earlier this year,” he said.
But he added: “Greater China continues to be one of our most important strategic markets. We remain committed to our China business, bringing the goodness of New Zealand milk to Chinese customers in innovative ways and partnering with local Chinese companies to do so.
“We are well placed to continue to grow our business in Greater China,”Fonterra, the world’s largest dairy exporter, has been criticised by its farmer-shareholders for its overseas ventures.
The dairy group revealed three months ago that it had further reduced its stake in China infant-formula joint venture Beingmate. At one stage it had a 19% share in the venture but in March this was reduced to 2.82% with Fonterra saying it will have exited the JV entirely by the the end of its financial year.
Fonterra described the results of the joint venture as “disappointing”.
Child slavery claims against Nestle, Cargill dismissed by US court
The US Supreme Court has reportedly dismissed a lawsuit accusing the US division of Swiss food giant Nestlé and ingredients supplier Cargill of child slavery at Ivory Coast cocoa farms.
The majority ruling was delivered yesterday (17 June) by Justice Clarence Thomas, Reuters reported. That reversed a lower-court ruling that permitted a lawsuit to be filed in 2005 against the two companies by six former cocoa farm workers from Mali, who claim they were illegally trafficked when still children to the Ivory Coast.
According to the news agency, the court ruled the claim could not be brought under the Alien Tort Statute, which allows non-US citizens to seek damages in American courts in certain instances, because the plaintiffs did not show any of the relevant conduct took place within the US.
“Nearly all the conduct that they say aided and abetted forced labour – providing training, fertiliser tools, and cash to overseas farms – occurred in Ivory Coast,” Reuters reported Thomas as saying in his verdict.
A Nestlé spokesperson was reported as saying: “Nestlé never engaged in the egregious child labour alleged in this suit, and we remain unwavering in our dedication to combating child labour in the cocoa industry.”
Meanwhile, Cargill responded to Just Food’s request for comment with a statement, which read: “The Supreme Court’s ruling today affirms Cargill’s analysis of the law and confirms this suit has no basis to proceed.”
It continued: “Cargill’s work to keep child labour out of the cocoa supply chain is unwavering. We do not tolerate the use of child labour in our operations or supply chains and we are working every day to prevent it. We will continue to focus on the root causes, including poverty and lack of education access. Our mission is to drive long-lasting change in cocoa communities and to lift up the families that rely on cocoa for their income.”
Paul Hoffman, the lawyer representing the six plaintiffs, told Reuters he intends to refile the lawsuit with more ‘detailed allegations on conduct’ that he said took place in the US.
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