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Mondelez is lobbying for the implementation of the EU’s deforestation law to be delayed again as US chocolate makers dial back their support for the landmark regulation amid political pressure and unusually high cocoa prices.
The proposed law, due to be implemented at the end of the year, bans imports ranging from cocoa to palm oil from being sold on the EU market if they have come from deforested land.
Cadbury owner Mondelez, which had previously supported the legislation, warned that the chocolate industry was already struggling with “record prices and supply shocks”.
“Further regulatory barriers could undermine the competitiveness of a €70 billion industry — at a time when the EU needs to step up its focus on global competitiveness and economic resilience,” said Massimiliano di Domenico, vice-president of corporate and government affairs for Europe.
“That’s why we strongly believe there is a need for a further delay.”
Mars and Hershey, two other major US chocolate manufacturers, have recently declined to join European counterparts such as Nestlé and Ferrero in signing letters to the European Commission voicing support for the law.
That decision was partly motivated by US President Donald Trump’s antipathy towards environmental rules, according to people involved in drafting the letters.
Mars told the Financial Times it had been “consistent in its support” for the EU’s deforestation law. A person familiar with the company’s position said it opposed a delay.
Hershey said it “continues to support efforts from the [European] commission to ensure this regulation achieves its intended impact of addressing deforestation”.
Chocolate makers have come under heavy strain after unfavourable weather and crop disease in west Africa, the world’s main cocoa growing region, reduced supply and caused cocoa prices to more than triple in just eight months.
Futures in New York have recently fallen from their peak of more than $12,000 per tonne but remain about $4,000 above their usual range.
The EU’s deforestation law, a big piece of its ambitious environmental agenda, has been criticised by bloc agricultural ministers, trading partners and rightwing politicians, many of whom say that it is unfeasible and want it radically watered down.
It was due to come into force at the start of 2025, but Brussels agreed in October to delay its implementation by one year. Companies were issued with additional guidance to help them prepare for the detailed customs information they will have to provide.
Organisations in other sectors such as agriculture and forestry are preparing to issue a statement calling for an amendment to the law in the coming days, according to one industry body involved.
In a letter this week, seen by the Financial Times, European chocolate makers including Ferrero, Nestlé and Tony’s Chocolonely said further delays or changes to the law “would severely undermine one of the EU’s flagship policies for tackling global deforestation and nature degradation”.
Antonie Fountain, managing director of Voice Network, which advocates for sustainable cocoa production, said uncertainty over the law’s implementation was causing chocolate makers “a lot of displeasure.”
“They are saying ‘stop prevaricating so we can get on with it’. [But] some of the American companies will not be saying this in public because they see what happens to those that do stand up for sustainability.”
The US has long opposed the deforestation law. Biden administration officials sent a letter to the commission in June last year saying it posed “critical challenges” to American producers and should be delayed.
EU officials have said recently that the deforestation law is one of several seen as problematic by the US. Others included the Digital Markets Act, which regulates big tech firms, and rules governing methane emissions, they said.
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