CHOCOLATE INGREDIENT PROPOSALS CAUSE STICKY PROBLEM IN EC

CHOCOLATE INGREDIENT PROPOSALS CAUSE STICKY PROBLEM IN EC

Proposals to harmonize ingredients in chocolate products within the European Community are stirring heated debate between chocolate manufacturers and cocoa butter pressers.

Manufacturers argue the harmonization plan would allow a freer circulation of goods within the single market, replacing a current system which gives some EC countries an unfair competitive advantage.Pressers reply the changes would hurt their industry, damage product quality and lead to a reduction in cocoa imports from producing countries.

The proposals, contained in a working paper from the foodstuffs legislation division of the EC Commission, have been circulating for a month, attracting the lobbying efforts of interest groups, including embassies of cocoa producing countries.

The proposals aim at simplifying a 1973 EC directive on cocoa and chocolate products, but it is "only a draft document, as nothing has been decided yet," a commission source said.

Most of the controversy surrounds a proposal to allow all EC states to use up to 5 percent of vegetable fat instead of cocoa butter in making chocolate products. Currently, Britain, Ireland and Denmark are the only countries permitted to do so.

Although it would reduce the use of cocoa butter, there are other elements in the proposal that weigh in favor of cocoa consumption, manufacturers said.

The 1973 directive gave 28 definitions of cocoa products - including cocoa powder, chocolate drinks and plain chocolate - while the new proposal calls for only 10 definitions. In particular, the working paper proposes to harmonize the definition of milk chocolate, which would comprise a minimum of 20 percent of cocoa and 15 percent of milk, with a minimum combined cocoa-milk total of 40 percent.

Currently, the U.K. definition is 20 percent of cocoa and 20 percent of milk, while the Continental definition is 25 percent of cocoa and 14 percent of milk.

The debate is a touchy one, since the industry justifiably fears the changes could have a negative impact on cocoa butter prices, while manufacturers argue it is not up to the suppliers to dictate the content of their products.

Some industry sources estimate that if the commission proposals were adopted it could cut the annual use of cocoa butter in the EC by 70,000 to 75,000 metric tons - the equivalent of 200,000 tons of cocoa beans.

Guy-Alain Gauze, commodities minister in Cote d'Ivoire, the world's largest cocoa producer, told Knight-Ridder Financial News he was very concerned about the commission proposals, which he said first surfaced in 1984 and were then rejected.

"I am really surprised the EC would disturb the equilibrium producers are trying to work on," Mr. Gauze said, referring to recent efforts to cut cocoa production.

Producers are currently discussing the possibility of a 380,000 ton cut in cocoa production over a five-year period.

"If one must harmonize, one should do it based on the majority, not the minority," he said, pointing out a majority of EC countries now use cocoa butter instead of vegetable fat.

On Nov. 4, senior EC political officials are set to discuss the foodstuffs sector and discussions are expected to involve chocolate, the commission source said.

The draft proposals on chocolate harmonization are not expected to come before the commission for approval before December or the beginning of next year, she added.