REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL regarding the mandatory indication of the country of origin or place of provenance for meat used as an ingredient
Date: 2013-12-17
Institutions: European Commission
Subjects: animal product, certificate of origin, chain store, consumer information, labelling, meat product













EUR-Lex - 52013DC0755 - EN











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52013DC0755

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL regarding the mandatory indication of the country of origin or place of provenance for meat used as an ingredient /* COM/2013/0755 final */









TABLE OF CONTENTS
1........... Introduction.................................................................................................................. 3
2........... Mandatory Origin labelling – a
brief overview............................................................. 3
3........... The EU supply chain of foods
with meat used as an ingredient.................................. 4
3.1........ Overview of the EU sector........................................................................................... 4
3.2........ Consumption of meat and
meat-related products........................................................ 4
3.3........ Production and outlook................................................................................................ 4
3.4........ Structure of the EU meat sector................................................................................... 5
3.5........ Existing EU traceability systems.................................................................................. 6
4........... Consumers' attitude towards
mandatory origin labelling for meat used as an ingredient    7
5........... Possible scenarios and origin
modalities concerning the provision of origin labelling for meat used as an
ingredient...................................................................................................................... 8
6........... Analysis of impacts and costs
and benefits of the different scenarios......................... 9
6.1........ Impact concerning consumer
behaviour....................................................................... 9
6.2........ Economic impacts......................................................................................................... 9
6.2.1..... Operating costs of FBOs.............................................................................................. 9
6.2.2..... Competitiveness, trade and
investment flows............................................................ 10
6.2.3..... Administrative burden on
businesses......................................................................... 11
6.2.4..... Burden on public authorities....................................................................................... 11
6.2.5..... Costs for consumers and possible
social impacts........................................................ 11
6.2.6..... Environmental impacts............................................................................................... 12
6.3........ Advantages and disadvantages of
origin modalities under Scenarios 2 and 3.......... 12
7........... Conclusions................................................................................................................. 13
REPORT FROM THE COMMISSION TO THE
EUROPEAN PARLIAMENT AND THE COUNCIL
regarding the mandatory indication of the country of origin or place
of provenance for meat used as an ingredient
1.           Introduction
Regulation (EU) No 1169/2011 of the European
Parliament and of the Council on the provision of food information to consumers
(hereinafter, 'the FIC Regulation')[1],
which will enter into application on 13 December 2014, introduces a set of
provisions on origin labelling of prepacked foods intended for supply to the
final consumer or to mass caterers. Article 26(6) of the FIC Regulation
requires the Commission to submit a report to the European Parliament and the
Council concerning the possibility to extend mandatory origin labelling for
meat used as an ingredient in prepacked foods. 
The present report meets this obligation. It
covers meat of all species (e.g. beef, pigmeat, poultry, sheep and goat
meat, game, rabbit meat, horse meat) used as an ingredient in prepacked foods. 
The main goals of this report are the
following: 
–              
To assess consumers' attitude towards mandatory
origin labelling for meat used as an ingredient;
–              
To examine the feasibility of such labelling;
and, 
–              
To analyse the costs and benefits of the
introduction of such measures, including the legal impact on the internal
market and the impact on international trade. 
It is accompanied by a Commission Staff Working
Document, which provides detailed information underpinning the conclusions set
out herein.
2.           Mandatory Origin labelling – a brief overview
Prior to the adoption of the FIC Regulation,
mandatory origin labelling has been applicable for specific foodstuffs. The
indication of origin is currently mandatory for unprocessed beef and beef
products (e.g. minced beef)[2]
following the bovine spongiform encephalopathy crisis, prepacked imported
poultry meat, honey, fruit and vegetables, fish, and olive oil. 
The FIC
Regulation introduces specific provisions concerning the indication of origin
on foods on a horizontal basis. In particular: 
–              
Article 26(2)(b) of the FIC Regulation requires
the mandatory origin indication for prepacked unprocessed meat of swine,
poultry, sheep and goats. The modalities for this mandatory origin labelling
will be laid down in a Commission implementing act. 
–              
Article 26(3) of the FIC Regulation provides
that where the origin of a food is given and where it is not the same as that
of its primary ingredient, the origin of the primary ingredient must also be
given or be indicated as being different to that of the food. The modalities
for the application of these rules will also be laid down in a Commission
implementing act.
3.           The EU supply chain of foods with meat used as an
ingredient 
3.1.        Overview of the EU sector
The EU meat processing industry represents more
than 13,000 companies. It employs about 350,000 people and represents a
turnover of EUR 85 billion.
The meat supply chain of meat to be used as an
ingredient is both highly heterogeneous in actors involved as well as in
products. Products can range from relatively simple meat preparations, e.g.
fresh meat with spices/additives, to extremely sophisticated meat-related
products, especially in the case of meat products and multi-ingredient foods
with meat ingredients. In addition, the supply chain of meat used as an
ingredient is quite complex and lengthy, involving several steps in production
and marketing of the final products. 
3.2.        Consumption of meat and meat-related products
The overwhelming majority of EU consumers (83%)
eat meat at least two or three times a week[3].
In addition, 88% of the EU27 consumers buy prepacked meat[4]. The majority of meat is pig (49%), poultry
(29%) and beef (19%), while sheep, goat and other meats account only for 3% of
EU meat consumption[5].

3.3.        Production and outlook
Generally, 30-50% of the total slaughtered meat
volume is processed into meat ingredients for foodstuffs (mostly into minced
meat/meat preparations/meat products). In total, an estimated 70% of the EU
processed meat production volume is made of pig meat, followed by poultry meat
(18%), beef (10%) and other types of meat (2%). In 2012, EU total fresh meat
production was 43.5 million tonnes carcass weight equivalent (around 33.8
million tonnes boneless meat equivalent). According to medium term market
forecasts, total EU meat production, after having increased during both in 2010
and 2011, will contract by 2% over the next two years. After this reduction,
total meat production is projected to steadily recover over the ten year
horizon and to reach almost 45 million tonnes in 2022, approximately the same
level recorded in 2011[6].
3.4.        Structure of the EU meat sector
The EU meat processing sector is characterised
by a low degree of concentration, with the majority of companies being small-
and medium-size enterprises ('SMEs') (90%). These SMEs are highly specialised
and operate independently at different stages of the supply chain. Furthermore,
there is limited vertical integration, especially in the pig meat and beef
sectors. Vertical integration tends to be more prevalent in the poultry sector.
Meat processors tend to procure raw material
mainly from traders on spot markets. Larger vertically integrated companies
tend to procure both from slaughterhouses/cutting plants and traders. 
The sourcing decisions as well as the frequent
changes in the mix of suppliers depend on the availability of suitable raw
material in sufficient volumes, the standard quality specifications determined
by the quality specifications of the final products, the competitive price and
the need to quickly adapt to any shortages, market disruptions and/or price
fluctuations, by switching suppliers. In terms of sourcing practices, EU meat
processors tend to procure unprocessed meat and other meat ingredients from
multiple sources. Multiple sourcing within the EU is a prevailing practice for
pig meat-based products, whereas multiple sourcing from EU and non-EU countries
is mainly observed for beef- and poultry-based products. Food business operators
('FBOs'), and in particular SMEs, tend to change their suppliers three or more
times per year to guarantee an adequate level of raw material at an affortable
price.
Once the companies process meat ingredients and
incorporate them into meat-related products, these are then further sold to
retailers/catering/butchers, whether or not sliced and/or packed.
Due to the characteristics of the EU meat
processing sector and its complexity, there seems to be limited demand from
processors for origin information on meat ingredients. It mostly concerns specific
meat preparations coming from a 'single meat piece' (e.g. dried ham) or products
for which meat of foreign origin is a specific condition for the production
process. 
For the majority of products, the raw materials
arrive at the processing stage already cut, mixed and/or trimmed. Even when
trimmings[7]
or blending of raw materials are not involved prior to the arrival at the
processing plant, the mix of raw materials from different suppliers is often
the case.
Producers of multi-ingredient foods with meat
ingredients procure raw materials from a wide-range of suppliers along the food
chain, (e.g. cutting plants, processors, mechanically separated meat
producers, wholesalers or traders); these operators do not have enough
bargaining power to impose origin requirements to their suppliers, as the
quantities supplied are relatively small compared to other key buyers.
Slaughterhouses and meat cutting plants are key
actors for passing origin information to the next player in the food chain. The
higher the degree of vertical integration and the larger the company size is,
the easier it is to ensure that origin information is passed along the food
chain. On the contrary, the more complex the cutting and processing stages and
the more advanced the level of processing, the more complex traceability
becomes for the purposes of origin labelling.
SME survey
In early 2013, a special survey was
conducted through the Enterprise Europe Network (EEN) for the purposes of the
Commission report on the possibility to extend mandatory origin labelling to
meat used as an ingredient. It was answered by 285 FBOs from EU27 Member
States. The main findings concerning the structure of the sector can be
summarised as follows:
*       Approximately
51% of the sampled FBOs were active in the production of meat and poultry meat
products sector, approximately 33% of the sampled FBOs were active in the
manufacturing of prepared meals and dishes sector, while another 31% were
active in the processing and preserving of meat sector (some FBOs are active in
more than one sector). Almost 80% of the sampled FBOs were manufacturing firms.
*       Concerning
the location of the trade/commercial activity of the sampled FBOs, 31% of those
reported that 81%-100% of their activity is local. For 64% of those, none of their
production is described as "Intra EU" (i.e. it is limited within a Member State) and for 72%, none of their production is set "Extra EU".
*       About the
origin of their primary raw material, 20% of the sampled FBOs identified their
raw materials as national, whereas 44% and 75% of the sampled FBOs stated that
almost none of their raw materials originated in Intra-EU" and "Extra-EU"
respectively.
*       58% of the
sampled FBOs do not have separate storage facilities for raw materials from
different sources.
*       According
to the sampled FBOs, the main advantages stemming from informing the consumer
about the provenance of the meat are mainly the fact that it gives reassurance
about the quality of the product (61%) and that it helps differentiating
amongst the available products (44%).
3.5.        Existing EU traceability systems
The existing traceability systems in the EU are
not adequate to pass on origin information along the food chain for the
following reasons: 
–              
The existing EU traceability legislation is
based primarily on the need to ensure food safety[8]. It is set up
only 'one step back – one step forward' along the food chain, i.e. FBOs must
be able to identify the businesses to which their products have been supplied
and to trace down raw material inputs back to the immediate supplier. For foods
of animal origin, more detailed information requirements are imposed to be
passed on along the food chain[9].
However, these traceability requirements do not foresee readily origin
information. Consequently, "cumulative traceability for origin determination
purposes" is not currently required at EU level.
–              
Where more detailed traceability systems exist,
these vary between the different animal species and do not extend beyond the
unprocessed phase (i.e. slaughterhouses/packing plants).
Overall, because of the structure of the supply
chain and the absence of any significant 'business-to-business' interest in
this information, the transmission of origin information tends to stop at the
earlier stages of the supply chain (slaughterhouses and cutting plants).
4.           Consumers' attitude towards mandatory origin labelling
for meat used as an ingredient
According to FCEC study,[10] origin of food
products in general is the fifth most important aspect influencing consumers'
purchase decisions out of 11 aspects considered (47.4%), following taste (82%),
'best before'/'use by' dates (62%), appearance (61.3%) and price
(48.3%). In addition, according to the 'GfK consumer study on the meat market',[11] the country of origin
is the fourth key information aspect (out of 15 information aspects) – looked
for by the consumers when they buy meat-related products, i.e. 48% of EU
consumers, without much difference between EU15 and EU12). Origin follows 'best
before'/'use by' dates (68%), price per kilogram (67%) and price (67%). Moreover, EU consumers are more likely to
look at the country of origin when buying fresh meat including meat
preparations (45%) than meat-based products (38%).[12]
With a more targeted examination on different
types of processed meat-based products, the FCEC consumer survey results indicate that more than 90% of consumer respondents find it
important that origin is labelled.[13]
In addition, the following findings emerge from the FCEC consumer survey:
•        Consumers are, by and large,
interested in knowing more about the origin of meat for all the three
meat-based product groups;
•        Consumers indicated in all cases the
highest interest to know the ‘country where meat was produced’: nearly
half of consumers (EU average) require this level of detail on the origin,
while roughly only a third of consumers require any other level of detail
(whether more general such as ‘produced in the EU or outside the EU’, or
more specific such as ‘the country where the animal was
born/raised/slaughtered’);
•        There are significant differences in
all cases between MS, with consumers in some MS consistently indicating more
(or less) interest in origin information than in others.[14]
In past consultations and in relation to meat
and meat products, consumers had also linked origin with safety. While there
are legitimate reasons for wanting to know the origin of a food (e.g. support
for local produce, characteristics of the product, ethical and environmental
concerns), other reasons that have been quoted are not pertinent. This is the
case specifically when origin is linked with safety, as products produced
anywhere in the EU or imported into the EU are, by definition, 'safe'.[15]
Consumers currently buy meat with origin
indications less often than they want, because of price considerations. This
price-sensitivity is mainly reflected in the weak consumer "willingness to
pay" ('WTP') for origin labelling on meat used as an ingredient[16]. At the first price
increase over and above the base price (+5-9% depending on the level of
information required), the consumer WTP falls significantly, i.e. by
60-80%, and continues falling with every further price increase. This trend
applies to all products covered by the report without any significant
differences amongst them.
These findings confirm a 'paradox' or a
discrepancy between consumers' interest in origin labelling and WTP for that
information. Consumers would be interested in receiving the information
– at the highest level of detail possible – if this information was to be
offered without any price increase. Consumers are generally not aware of the
additional costs related to origin labelling and believe that these are just
confined to 'the cost of some extra ink for printing'[17]. This paradox is also
manifested in the gap that has been observed in a number of studies between
intentions and actual purchasing behaviour, with price being an important
factor that explains this gap[18].
If mandatory origin labelling results in a price increase for the consumers,
the consumption of foods with meat used as an ingredient could decrease.
5.           Possible scenarios and origin modalities concerning the
provision of origin labelling for meat used as an ingredient
For the purposes of this report, the following
scenarios are being highlighted[19]:

–              
Scenario 1 – Maintain origin labelling on
voluntary basis;
–              
Scenario 2 – Introduce mandatory origin
labelling based on (a) EU/non EU or (b) EU/third country; 
–              
Scenario 3 – Introduce mandatory origin
labelling indicating the Member State or third country.
For the determination of origin under scenarios
2 and 3, different modalities have been studied for the three main categories
of the products concerned in an increasing order of processing: 
•        Category I: Meat preparations and products
made from mechanically separated meat:
–              
Origin as defined in the Customs Code, i.e.
the country where the ingredient was wholly obtained or the country of the last
substantial transformation of the meat ingredient;
–              
Origin information relating to the provenance of
the raw material, i.e. place of minimum period of rearing prior to
slaughter and place of slaughter. 
•        Category II: Meat products: 
–              
Origin as defined in the Customs Code, i.e.
the country where the ingredient was wholly obtained or the country of the last
substantial transformation of the meat ingredient;
–              
Origin information relating to the provenance of
the raw material, i.e. place of minimum period of rearing prior to
slaughter and place of slaughter. 
•        Category III: Multi-ingredient foods
with meat ingredient(s):
–              
Origin as defined in the Customs Code, i.e.
the country where the ingredient was wholly obtained or the country of the last
substantial transformation of the meat ingredient;
–              
Origin information relating to the provenance of
the raw material, i.e. place of minimum period of rearing prior to
slaughter and place of slaughter.
6.           Analysis of impacts and costs and benefits of the different
scenarios 
6.1.        Impact concerning consumer behaviour
Origin labelling provides consumers with
additional information to make informed choices about the food they wish to
purchase and consume. Overall, origin labelling is associated with a range of positive
attributes by many consumers, including quality. It is difficult to estimate
the impact of origin labelling to consumers in terms of a cost-benefit analysis.
Under scenario 1, origin information for meat
ingredient(s) would not be systematically provided to consumers. As such, it
does not provide a fully satisfactory solution to consumer demand for origin
information, although it better corresponds to the low consumer willingness to
pay for additional origin information.
Scenarios 2 and 3 would systematically provide
consumers with origin information on meat used as an ingredient. Scenario 2, being
less informative than scenario 3, may be considered as too generic and not
worthy of any resulting price increase. Scenario 3 would provide
meaningful information to consumers.
The possible price increase may nevertheless affect
negatively the consumption of meat-related foods.
6.2.        Economic impacts
6.2.1.     Operating costs of FBOs
Scenario 1 does not raise any additional
operational challenges compared to the current situation. It may be more
appropriate in instances, where meat of EU and non-EU origin is mixed in the
production process. The operating costs (e.g. production, sourcing and
traceability costs) would be kept to the minimum. 
Scenarios 2 and 3 would pose operational
challenges and require radical adaptations especially with respect to meat
ingredients of mixed origin (EU/non-EU). FBOs are likely to incur considerable
additional operating costs as follows: 
–              
The extent of additional costs could vary as
they would depend on the specific operational situation of the concerned FBOs,
the animal species concerned and the type of existing traceability systems. 
–              
The most impacted costs items are likely to be:
the adaptation of sourcing practices, possible changes in the mix of suppliers,
switching to smaller production batches, the adaptation of production process
to achieve segregation by origin within the premises, the adaptation of
packaging/labelling and the implementation/adaptation of traceability systems. 
–              
The additional costs for scenario 2 are likely
to range from negligible up to 25%, whereas for scenario 3 are likely to range
from +15-20% up to 50%. Additional traceability costs are estimated in the
range of +3% to +10% of the total production costs. 
–              
The trade of trimmings and fat is likely to be
negatively affected. Given the difficulty to implement an appropriate
traceability system, FBOs are likely to use such products less and less. This could
result in additional losses, which are estimated at 10% of the turnover of
slaughterhouses/meat cutting plants. However, the impact would largely depend
on the applicable modalities for determining origin labelling.
6.2.2.     Competitiveness, trade and investment flows
The impact on competitiveness and intra
EU/international trade under scenario 1 would be minimal. 
Scenarios 2 and 3 are likely to have the
following impacts on competitiveness and intra-EU trade:
–              
Changes in the supply chain, which would further
result in a segmentation of trade and in a decrease in the number of
intermediaries and the number of meat ingredients, are likely to occur. Indeed,
FBOs consider more cost effective to adapt the supply structure (sourcing,
batch sizes, reducing intermediaries) than upgrading the internal traceability
systems. 
–              
FBOs are likely to face higher prices as their
overall supply base would become limited.
–              
The outlets for meat ingredients of mixed origin
or for trimmings/fat would become limited.
–              
FBOs using meat ingredients would be adversely
affected compared to FBOs that do not use such ingredients.
–              
Changes in intra-EU trade flows for live
animals, unprocessed meat and meat ingredients are likely. 
–              
A risk for market segmentation of food products
may emerge under scenario 3.
Scenarios 2 and 3 are likely to have the
following impacts on international trade: 
–              
Changes in the geographical structure/volume of
trade flows between the EU and third countries are likely to occur. In that
respect, a shift of EU FBOs towards EU suppliers is likely to take place so as
to avoid the complexities deriving from multiple EU and third country origins. 
–              
Third country FBOs are likely to incur
additional costs, especially under scenario 3.
These impacts would concern especially those
third countries that currently export significant quantities of unprocessed
meat/meat ingredients to the UE: Thailand and Brazil for poultry, Brazil and Argentina for beef. However, the extent of the impact will depend on the national
provisions in place concerning origin labelling, if any[20]. Imports of pig meat
and sheep meat for processing are virtually non-existent. 
6.2.3.     Administrative burden on businesses
Scenario 1 would result in negligible administrative
burden and only for the businesses that provide the origin of the final food
and that origin is different from the primary meat ingredient(s). Under
scenario 2, the total burden is also estimated to be negligible. However, under
scenario 3, the additional administrative burden may result in an increase of
8-12% of the total production costs.
6.2.4.     Burden on public authorities
Scenario 1 is not expected to result in
additional control costs except for the costs entailed by the general
application of Article 26(3) of the FIC Regulation. 
However, an increase by 10-30% in control costs
is expected under scenarios 2 (to a lesser extent) and 3, depending on the
level of detail of the origin information required. This increase would be more
in terms of the number of staff needed, while under scenario 3 this increase
may also include additional staff time, as compliance costs are mainly based on
documentary checks. If the funding allocated to control authorities by the
state budgets is not increased – which seems likely in the current economic
environment – the expected increase in staff/staff time needed may lead to a
reduction in the frequency of controls or a change in priorities, which may
also result in increased risk for fraud. However, the burden on public
authorities could be mitigated in case fees are put in place for the conduct of
official controls.
6.2.5.     Costs for consumers and possible social impacts
The provision of origin information is expected
to result in increased costs, approximately 90% of which is estimated to be
passed onto to the consumer and only 10% to the producer. These percentages may
vary depending on the sector, the country concerned and the degree of vertical
integration and market concentration.
Scenario 1 is not likely to result in an
overall price increase. Where origin, however, is provided, the additional
costs are likely to be passed onto the consumers resulting in products at price
premium.
Scenarios 2 and 3 are likely to result in an
overall price increase in the consumer price, which would be higher in the
latter case. As such, scenario 3 – and to a lesser extent scenario 2 – may
result in a decrease in the consumption of meat-related products. Other social
impacts may also involve the following: market segmentation of meat
consumption; adaptation of sourcing patterns; elimination of intermediaries; and,
employment may be negatively affected.
6.2.6.     Environmental impacts
The environmental impact of scenario 1 is
likely to be minimal. Both scenarios 2 and 3 are likely to increase waste
ingredients, especially in the case of trimmings/fat. Scenario 3 could also
provide an incentive to consume products produced in proximity. 
6.3.        Advantages and disadvantages of origin modalities under
Scenarios 2 and 3
The Table below
provides a summary of advantages and disadvantages of the origin modalities
considered under scenarios 2 and 3 (mandatory origin labelling):
 Modalities under 2nd and 3rd scenarios || Advantages || Disadvantages 
 Category I: Meat preparations/ mechanically separated meat || Country where ingredient was wholly obtained or country of last substantial transformation (Customs Code) || -         Provides meaningful information to the consumer; -         Trimmings and fat could be used as ingredients, where origin is determined as the country of the last substantial transformation. || -         Additional traceability systems; -         Implementation could be challenging if multiple origins are involved; -         Trimmings and fat are not likely to be used as ingredients in cases, where origin is determined as the place of minimum rearing prior to slaughter, given the challenges in storage/traceability. 
 Place of minimum rearing prior to slaughter + place of slaughter || -         Places more emphasis on the provenance of the raw material where the ingredient was not wholly obtained in one country. || -         Additional traceability systems; -         Implementation could be challenging if multiple origins are involved; -         Trimmings and fat are not likely to be used as ingredients, given the challenges in storage/traceability. 
 Category II: Meat products || Country where ingredient was wholly obtained or country of last substantial transformation (Customs Code) || -         Places more emphasis on the place of processing where the country of last substantial transformation applies; -         Technically feasible for FBOs; -         More practical, if multiple origins are involved; -         Trimmings and fat could be used as ingredients. || -         Provides no information on the provenance of the raw material where the country of last substantial transformation applies. 
 Place of minimum rearing prior to slaughter + place of slaughter || -         Places more emphasis on the provenance of the raw material where the ingredient was not wholly obtained in one country. || -         Provides no information on the place of processing; -         Additional traceability systems; -         Particularly challenging where multiple origins are involved; -         Trimmings and fat are not likely to be used as ingredients, given the challenges in storage/traceability. 
 Category III: Multi-ingredient foods with meat used as an ingredient || Country where ingredient was wholly obtained or country of last substantial transformation (Customs Code) || -         Places more emphasis on the place of processing where the country of last substantial transformation applies; -         Trimmings and fat could be used as ingredients. || -         Provides no information on the provenance of the raw material where the country of last substantial transformation applies; -         Additional traceability systems; -         Particularly challenging where multiple origins are involved. 
   || Place of minimum rearing prior to slaughter + place of slaughter || -         Places more emphasis on the provenance of the raw material where the ingredient was not wholly obtained in one country. || -         Provides no information on the place of processing; -         Additional traceability systems; -         Particularly challenging where multiple origins would be involved; -         Trimmings and fat are not likely to be used as ingredients, given the challenges in storage/traceability. 
7.           Conclusions
Consumer interest in origin labelling for meat
ingredients appears to be considerably strong. There are significant
differences amongst the different Members States as to consumer preferences and
understanding of origin information as well as to levels of motivation/reasons
for such information. The overall strong consumer interest in origin labelling,
(a) ranks behind price and quality/sensory aspects in terms of the most
important factors affecting consumer choice and (b) it is not reflected in the
relevant consumer "willingness to pay"; at price increases of less
than 10%, the "willingness to pay" falls by 60-80%. 
The feasibility
and the impact of origin labelling depend largely on the nature and applicable modalities
as well as on the nature of the products concerned. For the purpose of this
report, three scenarios have been examined: 
–              
Scenario 1 – Maintain origin labelling on
voluntary basis;
–              
Scenario 2 – Introduce mandatory origin
labelling based on (a) EU/non EU or (b) EU/third country; 
–              
Scenario 3 – Introduce mandatory origin
labelling indicating the Member State or third country.
Scenario 1 would not raise any additional
operational challenges for FBOs, as operating costs, impact on EU and
international trade, administrative burden, burden on public authorities,
additional costs passed onto to the consumer would be kept to the minimum.
However, it would not provide a fully satisfactory solution to the consumer
demand for origin information.
Both scenarios 2 (to a lesser extent) and 3
would address consumer need for origin information whilst they would pose
operational challenges and require radical adaptations in the food chain.
Scenario 2 is considered more feasible than scenario 3. In particular: 
Scenario 2 would respond to the consumer demand
for origin information but it may be considered as too generic and not worthy
of any price increase resulting from additional operating costs for FBOs (ranging
from negligible up to 25%), Regarding competitiveness and trade, changes in the
supply chain may result in market segmentation and in a decrease in the number
of intermediaries and the number of meat ingredients. As regards international
trade, this scenario is likely to change trade flows with a risk for a shift of
EU FBOs towards EU suppliers and to create additional costs for third country
FBOs. Whilst administrative burden for food business operators is estimated to
be negligible, the burden on public authorities is expected to increase by
10-30%.
Scenario 3 would on the one hand provide
meaningful information to consumers, considering they are, by large, interested
in knowing more about the origin of meat for all three meat-based product
groups and on the other hand, it is likely to bring extra costs for the FBOs, resulting
in price increases depending on the nature of the meat ingredient(s) concerned
and the final product(s) that could affect consumption. Additional operating
costs for FBOs under this scenario are likely to range from +15-20% up to 50%.
Regarding competitiveness and trade the impact would be similar, though more
prominent, to the one under scenario 2. Additional administrative burden may
result in an increase of 8-12% of the total production costs whilst burden on
public authorities is likely to be higher than the one under scenario 2. If the
funding allocated to control authorities by the state budgets is not increased,
which in the current economic environment is the prevailing tendency, a
reduction in the frequency of controls or a change in the priorities is likely.
The possible imposition of fees for the conduct of official controls could
mitigate the official control costs.
The Commission is of the view that all possible
scenarios present advantages/disadvantages that need to be widely discussed with
the Council and the European Parliament. On the basis of these discussions, the
Commission will consider what, if any, appropriate next steps should be taken.
This may include, if appropriate, tabling a legislative proposal to regulate
the labelling of origin of meat used as an ingredient in foods.
[1]               Regulation (EU) No 1169/2011 of the European
Parliament of the Council of 25 October 2011 on the provision of food
information to consumers, amending Regulations (EC) No 1924/2006 and (EC) No
1925/2006 of the European Parliament and of the Council, and repealing
Commission Directive 87/250/EEC, Council Directive 90/496/EEC, Commission
Directive 1999/10/EC, Directive 2000/13/EC of the European Parliament and of
the Council, Commission Directives 2002/67/EC and 2008/5/EC and Commission
Regulation (EC) No 608/2004, (OJ L 304, 22.11.2011, p. 18). 
[2]               Regulation (EC) No 1760/2000 of the European
Parliament and of the Council of 17 July 2000 establishing a system for the
identification and registration of bovine animals and regarding the labelling
of beef and beef products and repealing Council Regulation (EC) No 850/97, (OJ
L 204, 11.8.2000, p. 1). 
[3]               Impact Assessment – Commission Staff Working Document
– Mandatory Origin indication for Unprocessed Pig, Poultry, Sheep and Goat Meat,
not yet published.
[4]               Commission Report on the functioning of the meat
market for consumers in the European Union, May 2013, to be found at:                
http://ec.europa.eu/consumers/consumer_research/market_studies/docs/mms_commission_report_en.pdf.
[5]               Impact Assessment – Commission Staff Working Document
– Mandatory Origin indication for Unprocessed Pig, Poultry, Sheep and Goat Meat,
not yet published.
[6]               DG AGRI 2013: 'Prospects for Agricultural markets and
income in the EU 2012-2020', 2013.
[7]               Trimmings are the leftovers, when a carcass is cut up
to pieces, which can have a high value.
[8]               Article 18 of Regulation (EC) No 178/2002 of the
European Parliament and of the Council of 28 January 2002 laying down the
general principles and requirements of food law, establishing the European Food
Safety Authority and laying down procedures in matters of food safety, (OJ L
31, 1.2.2002, p. 1). 
[9]               Commission Implementing Regulation (EU)
No 931/2011 of 19 September 2011 on the traceability requirements set
by Regulation (EC) No 178/2002 of the European Parliament and of the Council
for food of animal origin, (OJ L 242, 20.9.2011, p. 2).
[10]             Annex D (consumer survey) to the "Study on the
application of rules on voluntary origin labelling of foods and on the mandatory
indication of country of origin or place of provenance of meat used as an
ingredient", (hereinafter the 'FCEC study'), not yet published.
Given the fact that the FCEC consumer survey took place in the midst of the
horse meat scandal (December 2012-March 2013) affecting consumer trust in the
meat product/meat-containing product sector, it cannot be excluded that this
factor might have influenced the outcomes of the study.
[11]             This study was carried before 2013, i.e. before
the horse meat scandal.
[12]             Commission Staff Working Document, at pp. 22-28.
[13]             FCEC study, at p. 10.
[14]             These differences are elaborated in the Commission
Staff Working Document, at pp.30-32. 
[15]             Commission Staff Working Document, at p. 40.
[16]             Annex D to the FCEC study'.
[17]             "Study on mandatory origin labelling for pig,
poultry and sheep and goat meat", LEI Wageningen University (2013).
[18]             FCEC study, at p. 25.
[19]             Other scenarios (i.e. mandatory labelling
indicating place of provenance at higher or lower level than a country,
mandatory origin labelling based on origin split in three stages – "born,
raised and slaughtered" or mandatory origin labelling based only on the
place of birth, or place of birth and slaughter or only place of slaughter)
were considered unfeasible and therefore they have not been analysed in detail.
[20]             For example, it appears that in Brazil traceability and origin labelling is currently provided at country level on the
basis of the place of farming and rearing.