MALVINAS ARGENTINAS

Based on the results presented in the section above, it is concluded that the scope of the

Regulation is mostly adequate to match the current needs of organic farming supply and distribution chains, but is not fully adequate to meet the needs of consumers of organic products, taking the following into account:

• Lack of clarity exists mainly with regard to non-food products closely related to organic

agriculture, such as wool, beeswax, some essential oils and herbs for medicinal use.

• In some Member States national and/or private provisions exist for organic mass catering.

There is limited evidence of intra-community trade, so the absence of a uniform EU standard does not impact on the fairness of competition among operators in catering services. There is some support among stakeholders for the inclusion of mass catering under the scope of the Regulation to improve clarity for consumers and to increase potential for recognition of organic farming within green public procurement. However, inclusion could increase the regulatory burden on the sector and therefore has the potential to hinder rather than the support the development of this sector.

• Various non-food products (such as body care products and cosmetics, household cleaning

products and textiles) using organic claims are found in retail outlets. This is likely to cause confusion for consumers and could undermine trust in the organic label for food products. However, the labelling requirement of a minimum of 95 % of organic ingredients that applies to organic food is not transferable to cosmetics and textiles. Private standards and international initiatives exist which are developing harmonised and accepted minimum criteria for the regulation of such products.

Detailed considerations

Council Regulation (EC) 834/2007 on organic farming is limited to unprocessed and processed agricultural products used for food and feed, vegetative propagating materials and seeds, yeast (for food and feed) as well as products from aquaculture. Mass catering is explicitly excluded, whereas non-food products (such as cosmetic, textiles and some products closely related to organic agriculture) are not in Annex I of the EU Treaty. The evaluation question considers whether the current scope is adequate to meet the needs of operators and consumers of organic food.

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The evaluation is based on stakeholder responses to the web-based survey, an analysis of national provisions from 13 national case study countries as well as other EU or private initiatives. No official statistical data on the development of the size of the respective sectors in the EU were available. The assessment of the sectors’ needs therefore mainly relies on views of stakeholders, particularly of mass caterers and cosmetic/textile operators as well as other stakeholders. Some estimates of the size of respective sectors and observations about the presence of organic non-food items in some stores were also considered.

Clarity of the scope

According to the stakeholders' opinion the scope of the Regulation is sufficiently clear except the question how the organic status of agricultural non-food raw materials (products closely related to organic agriculture such as beeswax, essential oils, medicinal herbs, and sheep wool) that are produced according to the requirements of Regulation (EC) 834/2007 and the implementing rules can be communicated on the final product. The current situation with no clear guidance regarding labelling leads to confusion in the organic sector and disadvantages producers of such products that are closely related to organic agriculture.

Furthermore, although mass catering is clearly excluded, there is a risk that the exemption is interpreted differently with respect to what types of business are excluded. On the one hand, processing businesses that supply caterers (rather than providing catering themselves) could be excluded under ‘similar food businesses’. On the other hand, some catering businesses are required in some Member States to meet the same requirements as processors thus contradicting the intention of the exemption.

Thus it is judged that the scope of the Regulation is sufficiently clear to different stakeholders except the question how producers of agricultural non-food raw materials can communicate organic status of their products. Furthermore, there are some concerns that the exclusion of mass-catering might be interpreted differently.

Mass catering

The results show that the exclusion of mass catering operations from the scope of the Regulation is mostly adequate to match the current needs of the organic farming supply and distribution chains, but not fully adequate in meeting the needs of organic consumers.

National or private mass catering standards exist in several Member States. They illustrate that the development of organic mass catering both in public canteens and in private restaurants requires some flexibility, due to the difficulty of obtaining all organic ingredients used in the preparation of a wide variety of dishes. Existing national or private standards take this into account by either allowing caterers to use organic indications in relation to only one ingredient (e.g. organic potatoes) or one component (e.g. all vegetables) in a mixed menu or by setting relative minimum percentages of organic ingredients that have to be used. One reason for the

70 Chapter 6 Adequacy of the scope of the Regulation

exclusion of mass-catering from the scope of the Regulation is that rules could limit the flexibility that is required for this sector to develop.

National estimates indicate that the catering sector in both public and private canteens and restaurants accounts for between less than 1 % (Slovenia, United Kingdom) and up to more than 10 % (Denmark, Italy, Netherlands) of total organic sales in selected case study countries but there is no clear link between sector size and the presence of rules. At present, there is no evidence of cross border trade in procurement and catering services. The fact that different rules for mass catering apply in different Member States therefore does not contradict the aims of the organic Regulation of guaranteeing fair competition, but it is possible that the absence of common rules could have prevented such trade from developing. Because of limited intra- community trade, the existence of different national rules for mass catering does not necessarily undermine consumer confidence.

There was some support for inclusion of mass catering in the Regulation among stakeholders; important reasons mentioned are improved transparency for consumers in countries where there are no national rules and more clarity and greater visibility of organic products in green public procurement (GPP). GPP is a voluntary instrument developed by the European Commission to encourage environmental criteria to be considered in public procurement. The GPP Core criteria for catering refer explicitly to Regulation (EC) 834/2007 and state that a minimum percentage of food which must be organically produced may be specified. GPP guidelines do not provide further details about the potential implications for labelling or verification. The inclusion of mass catering in the scope of the Regulation could therefore support and encourage the use of organic ingredients in line with GPP guidelines. However, inclusion could potentially limit growth because it would restrict flexibility and the need for catering business to be certified represents a disincentive for business to engage.

Non-food items (cosmetics, textiles)

It is concluded that the exclusion of cosmetics and textiles from the scope of the Regulation meets the needs of the organic supply chains but does not fully meet the needs of consumers. No official data on size of the market for organic cosmetics and textiles exist, but according to industry sources there has been growth particularly for cosmetics and textiles. This is particularly relevant when considering the aims of the Regulation in ensuring consumer confidence and protecting the interests of consumers. Many cosmetics, textiles, household cleaning products and some other non-food products using the terms ‘organic, biological, ecological’ are found in the market place, but not all of them are certified according to a recognised standard, despite a widespread expectation that this is required for organic products. Consumers are unlikely to know that the protection of the terms in Article 23 of the Regulation (EC) 834/2007 only refers to agricultural products. The use of the protected term in the labelling of non-food items is therefore creating consumer confusion. A more harmonised and universal approach and use of a common logo could improve recognition and trust among consumers.

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However, cosmetics and textiles require regulations that consider the specific characteristics of these respective products and the labelling rule of < 95 % of organic ingredient for organic products cannot be transferred as such. Developing new provision for such products would increase the level of complexity of Regulation (EC) 834/2007. In the case of cosmetics, the likely percentage of organic raw materials in the final product can be very low. The main task of any standard is to develop a positive list of all permitted ingredients, especially non-agricultural ones, to define what ‘natural’ means in this context and which raw materials from organic agriculture should be used. In the case of textiles, the standards need to cover the whole supply chain and the inclusion of fairness criteria is considered essential by most industry experts.

For both product categories, initiatives by the European Commission were identified, and in the case of cosmetics an ISO working group also exists which are aimed at defining valid organic claims for these sectors. These initiatives could achieve some of the objectives of the Regulation in relation to these scopes.

Chapter 7