The International Dairy Foods Association (IDFA) is calling on the U.S. government and European Commission (EC) to quickly resolve a regulatory dispute that threatens the export of dairy ingredients produced in the United States and used to make infant formulas and critical adult nutrition products in European Union member states and other nations. Unless the U.S. and EC resolve the issue in the coming weeks, the supply chain for global infant formulas will be thrown into chaos resulting in product shortages, job losses, and price increases.
IDFA member companies make and supply medically important specialized nutritional products for infants and adults that are made exclusively for European companies or shipped through EU member states. Now the EC is seeking to revise import certificates on U.S. goods to include onerous animal health attestations that run counter to World Organization for Animal Health (OIE) guidance.
The new EC requirements are due to take effect on August 21, 2021, threatening approximately $600-900 million in annual sales of these critical nutrition products and disrupting supply chains. At present, IDFA said there are no alternate suppliers for these ingredients, which will be depleted by the end of 2021 without resolution of the issue.
The EC certificate requirements also apply to all products shipped through its territory, also known as trans-shipping, including dairy shipments destined for U.S. military bases in Europe and any products shipped to other countries for further processing before being exported back to the EU, meaning the entire global supply chain for these goods may be impacted.
While IDFA and the U.S. government disagree with the EC’s requirement, U.S. suppliers and makers of these dairy ingredients have not received sufficient time or necessary technical guidance from the EC to effectively implement the new certificates. Therefore, U.S. suppliers and makers of these dairy ingredients are requesting an extension of the August 21, 2021 implementing date to allow more time for the U.S. and EC to reach a satisfactory resolution of this issue. IDFA is urging the Office of the U.S. Trade Representative (USTR), the U.S. Department of Agriculture (USDA), and the U.S. Food and Drug Administration (FDA) to work collaboratively to resolve the issue with the EC and to prioritize preserving the uninterrupted flow of U.S. dairy exports to Europe.
“IDFA and its members have been working tirelessly for months to educate both U.S. and European officials about the catastrophic impact of the EU’s misguided policy,” said Michael Dykes, D.V.M., IDFA president and CEO. “Despite those efforts and the clear impact to critically important global infant formula sales, U.S. dairy exporters may lose complete market access to the EU, impacting European processors and consumers all around the world.”
Becky Rasdall, IDFA vice president, trade policy and international affairs, commented: “At a time when global public health must be our collective priority, it is deeply troubling that we are facing a potential crisis in global supply chains for these specialized nutritional products. Existing contracts have been thrown into question, jobs and facilities that support the nutritional needs of vulnerable populations are facing closure, and consumers who need the products most are vulnerable. We must avert this crisis now.”
A wide range of food and beverage products enter the EU from destinations around the world for further processing. When such interconnected supply chains fail, European processors, packaging manufacturers, and trading partners alike are hurt by the disruption, evidenced by the supply chain disruptions caused by the COVID-19 pandemic.
IDFA is calling on U.S. and EU officials to immediately resolve the outstanding certificate negotiations and allow sufficient time before implementing any new requirements to ensure global infant and adult nutrition supplies are protected and countries can logistically prepare. See the latest letter from IDFA to the EC here.