§ 7.39 p.m.
§ Lord Reay
rose to move, That this House take note of the Report of the European Communities Committee on The EC Chocolate Directive (19th Report, HL Paper 85).
The noble Lord said: My Lords, as a life-long, confirmed chocaholic, a category known, I believe, to the supermarket manager as an "indulgence-oriented customer", it gives me particular pleasure to introduce this debate.
Sub-Committee D interrupted its inquiry into the Commission's Agenda 2000 proposal—an inquiry which has subsequently been completed with the resulting report awaiting debate in your Lordships' House—in order to conduct in parallel a much shorter inquiry into the Commission's chocolate directive, because of the indignation with which certain amendments introduced by the European Parliament to the Commission's proposals have been received in this country and because of the threat that those amendments, if they passed into law, would pose to British chocolate manufacturing interests.
451 The issue between this country and other member states on the subject of chocolate consists of two elements, both of which have their origin in differences in traditional manufacturing methods. If I may, I shall follow the example of most of the report in dealing with their respective histories in turn. One concerns the use of non-cocoa vegetable fats in the manufacture of chocolate; the other concerns the percentage of milk in milk chocolate.
I shall take the non-cocoa vegetable fats first. When the UK and Ireland joined the European Community in 1973, we were the first member states which permitted the inclusion of non-cocoa vegetable fats up to a limit of 5 per cent. in the manufacture of chocolate. Perhaps I may say in parenthesis at this point that non-cocoa fats, for example, palm oil or oil from shea or illipe nuts, are valued in chocolate for imparting hardness and other qualities, and are widely used in other foods.
In 1973 the Council then adopted a directive which permitted chocolate with a 5 per cent. non-cocoa fat content to be manufactured and traded within the European Community, but it also allowed those member states which did not permit the inclusion of vegetable fats in the manufacture of chocolate also to forbid the import of chocolate containing them, even from other member states. So no single market for chocolate existed. No further progress was made until 1996, when the Commission brought forward a new directive which set out to introduce this single market. By then, five other member states which allowed non-cocoa fat in the manufacture of chocolate had joined the EC.
The 1996 directive sought to open the market fully by requiring both sorts of chocolate to be allowed to circulate freely throughout the Community, but would have required chocolate containing non-cocoa fat to carry a label containing aclear, neutral and objective statementto that effect, in addition to the list of ingredients.
The European Parliament then, in the autumn of last year, adopted its amendments to the Commission's proposals—amendments which caused so much alarm—one of which introduced the requirement that this label should be "conspicuous", and that it should appear on the front of the product.
The Commission then in March produced a revised proposal, which rejected most of the European Parliament's amendments, but took over the European Parliament's wording that the statement should be "conspicuous", although not the proposal that it must appear on the front of the product.
In the course of our inquiry, we received written evidence from several sources, and oral evidence from the BCCCA, the Biscuit, Cake, Chocolate & Confectionary Alliance, which is the British industry's chief representative body. The industry does not welcome extra labelling requirements, as they involve expense, especially if they are introduced without adequate warning.
However, for the sake of obtaining an agreement that would open up new markets for its products, it appeared that the industry would be willing to accept a measure of double labelling, provided it could be given sufficient 452 notice, and provided any statement additional to, and separate from, the ingredients list should not have to appear on the front of the product. Front-of-package labelling in its view and in our view bears too much similarity to a health warning, and would not be acceptable. We take the view that any double labelling is inherently unnecessary and undesirable, and that a requirement for it in this case should only be temporary.
The Commission's revised proposal was only published after our report went to press, but in a subsequent letter to the Government we drew attention to the danger of the Commission's revised double labelling wording leading indirectly to a requirement for the statement, in order to be "conspicuous", to appear on the front of the product. To counter this danger, we have suggested that where the label is placed is a matter that should be left under the directive to the discretion of the manufacturer, not of the importing member state.
As far as milk in chocolate is concerned—the second area of contention—Ireland and the United Kingdom have both traditionally used a higher percentage of milk, up to 20 per cent., in chocolate than have all other member states even to this day. For them, the limit is 14 per cent.
The 1973 directive placed the two types of milk chocolate in separate categories, and required the British and Irish type to be sold aschocolate with a high milk content",although this was in practice in the directive at the time translated into other Community languages as "household milk chocolate". At the same time, the UK and Ireland were given a derogation which permittedmilk chocolate with a high milk contentto sell as "milk chocolate" on their own markets.
The 1996 directive proposed no change to the 1973 directive so far as concerns milk chocolate. The European Parliament, however, when it came to consider the matter, amended the directive so as to remove the Irish and UK derogation, with the effect that milk chocolate would no longer be able to be sold as such, even on their own markets. The Commission, in its revised proposal, has restored the derogation.
The industry believes that the pejorative way, in its eyes, in which the descriptionchocolate with a high milk contentwas allowed to be translated in the 1973 directive into other member states' languages, has led to it being sold among groceries rather than confectionery, and must be held at least partly responsible for the negligible sales of UK milk chocolate in some Community markets. We record our surprise that the industry seemed willing to accept a directive that did not address this issue. This may be due to its assessment that as only the UK and Ireland are affected, support in Council for the changes desired will be difficult to obtain.
In the long run, we see no good reason why there need to be two separate products, "milk chocolate" and,milk chocolate with a high milk content",and why both products cannot be allowed to compete against each other under the description "milk chocolate" although I think that the noble Lord, Lord Borrie, may give a different view and I look forward to 453 hearing what he has to say. If there is to be a separate description for British-style milk chocolate in our view it should at least be neutral in all languages.
A new directive along the lines of the present one, if and when it comes into effect, may highlight this issue of derogatory labelling because the opening of the Community market to chocolate containing non-cocoa fats will also mean that more British-style milk chocolate will have the chance to appear on other member states' markets. Any discriminatory treatment may then be both more noticeable and more damaging. That is the reason why we describe the issue of milk chocolate as an unresolved issue which may need to be revisited in the future.
There, in a nutshell, are, I believe, the two issues at stake. I shall leave it to other noble Lords taking part in the debate to supply the adjectives that properly reflect the indignation felt by them and others at the attempts made in some quarters, notably in the European Parliament, to restrict by unfair means the sale in other markets of the Community of traditional, good quality British products.
As far as the interests of developing countries are concerned—and they tend to be prayed in aid in argument by those seeking to preserve the status quo—any increase in the sales of non-cocoa fats is likely to help those developing countries that produce the raw materials for those fats, and any comparative reduction in the use of cocoa is likely to be more than offset by the continuing growth in the consumption of chocolate in Community markets. Cocoa is currently in short supply, and as a result, has been rising in price. In any event, in the eyes of many, the artificial distortion of natural trade patterns is an unsatisfactory method of providing aid to under developed countries.
In their recent pronouncements on this subject, Her Majesty's Government have been admirably robust in their stated determination to defend British manufacturing interests. I hope the Minister will be able to reassure us this evening of their continuing resolve to obtain justice for this important, traditional British industry, and will be able to report to us significant indications of progress in this long campaign.
It only remains for me to thank all those who provided the committee with written evidence, the BCCCA for its most useful oral evidence, the members of the sub-committee for their essential help and assiduous attendance and our admirable new clerk, Mr. Andrew Mackersie, for his diligent organisation of the inquiry and preparation of the report. I beg to move.
Moved, That this House take note of the Report of the European Communities Committee on The EC Chocolate Directive (19th Report, HL Paper 85).—(Lord Reay.)
§ 7.50 p.m.
§ Lord Borrie
My Lords, I am a member of the Select Committee on the European Communities. However, I am not a member of Sub-Committee D which did all of the real work in taking evidence and writing the report. I hesitated therefore before tabling my name for this debate. I very much respect the work carried out by the noble Lord, Lord Reay, and his colleagues, but this evening I venture to put forward a view somewhat at variance with their conclusions.
The noble Lord, Lord Reay, has already said that there are two key elements in this directive. Unlike him, I shall simplify the matter by ignoring what the European Parliament has said. I believe that I am entitled to do that and to make the point that when considering this subject the Commission itself ignored the Parliament's basic and rather extreme comments.
The first element in the directive is that chocolate containing up to 5 per cent. non-cocoa fats—the United Kingdom industry norm—should be allowed free circulation in the Community. This is marvellous; this is something that has not existed for some time. As the report states, it is a welcome measure. After 25 years the Community is at last helping to implement the single market. Certainly, it is helpful to UK chocolate manufacturers since it will apply even though the domestic legislation of eight member states, including all six original members of the Community, banned the use of non-cocoa fats in the manufacture of chocolate as manufactured by their own industries.
However, the directive states that the presence of non-cocoa fats should be indicated not just in the list of ingredients but also by a clear, neutral and objective statement. In principle, the report is against what it calls double labelling as an unnecessary burden on industry, but it goes along, perhaps reluctantly, with the directive's proposal that so long as it has a strict end in point of time—an end date—and does not have to be on the front of the package that is acceptable.
The other element of the directive relates to milk chocolate where the directive proposes no change in the current position whereby the type favoured on the Continent, which is 25 per cent. cocoa and 14 per cent. milk, and the type favoured only in the United Kingdom and Ireland, which is 20 per cent. cocoa and 20 per cent. milk, are treated as distinct products, the latter having to be sold as "milk chocolate with a high milk content". That is translated into other European languages in a variety of ways as "household milk chocolate" and similar terms. The directive allows the derogation for milk chocolate sold within the United Kingdom and Ireland. Such chocolate can continue to be labelled simply "milk chocolate".
The report sees no reason why there should be two separate products: milk chocolate and milk chocolate with a high milk content. It strongly objects to what it calls misleading translations of the phrase "milk chocolate with a high milk content" because it has a discriminatory effect. As the noble Lord, Lord Reay, has pointed out, such chocolate is sold among groceries 455 rather than confectionery. Paragraph 36 of the report is particularly robust—if I were unkind I might even say that it was tendentious—when it says:Those who argue for two separate denominations are attempting to restrict competition within the Community".I believe that if there are perceived by consumers to be significant differences between products then consumers, whether in the United Kingdom, Germany, France or anywhere else, are entitled to accurate and reasonably full information on which to decide what to buy based on what they like from their experience.
I believe that there can be true and fair competition between producers only if consumers are enabled to make well informed choices based on clear, consistent and useful information from competing suppliers. I note that the report favours the view that in respect of chocolate with up to 5 per cent. non-cocoa fats it should at least for a period of time have some form of additional labelling apart from the ingredients list. The report recognisesthat to consumers in eight Member States chocolate containing non-cocoa fats will he a new and unfamiliar product".I am not sure why this greater clarity of information should have a strict end date. After all, there are new consumers of chocolates coming along all the time. For example, children become purchasers of chocolate and so on. I am not sure why it should be only on the back of the packet where it may be less likely to be seen.
In my experience, the phrase "burden on industry" is one that trips very easily off the tongue of those giving evidence. It is less easily justified. To be fair to the noble Lord, Lord Reay, he said that manufacturers could not really object to changes to the packaging given that they were making those changes themselves every so often as long as they were not required to incur the additional expense of a special change at a particular point in time without much or any notice.
I am sorry that the evidence of the Consumers' Association given to the sub-committee was so limited. For reasons best known to the association, it claimed that the subject was not a high priority for it. It did not deal at all in its written evidence with the subject of milk chocolate. Contrary to the report, I believe that United Kingdom-style milk chocolate is a different product. It is a sweeter, more milky product. I agree with the report that misleading or pejorative translations of the phrase "milk chocolate with a high milk content" should not be permitted by the European Community authorities. We want a description that indicates the difference but which is neutral in all languages, is clear and distinct.
§ 7.58 p.m.
§ Lord Willoughby de Broke
My Lords, as a member of the sub-committee that produced this report, I begin by thanking my noble friend Lord Reay for his exemplary chairmanship of the sub-committee during its inquiry. I join him in thanking our clerk for his organisational abilities. My noble friend has already put the sub-committee's views very clearly and I shall not weary the House by repeating those in detail now. There are however a few points that I believe are worth underlining.
456 I begin by congratulating the Commission—a somewhat rare event—on its first unamended directive in 1996. If one must have a chocolate directive, which is highly questionable, at least that directive was adequate, in that it proposed that chocolate products containing vegetable fats could be marketed in all member states provided they were labelled with a clear, neutral and objective statement in addition to the list of ingredients, that these substances were present in the finished product.
The noble Lord, Lord Borrie, took exception to that and believed that there should be an additional statement. Surely, the requirement for double labelling, the vegetable fat declaration being separate, is superfluous. Where else should vegetable fat be included as an ingredient if not in the list of ingredients? I cannot see the necessity for double labelling. I understand that the industry is prepared to accept the requirement in the short term as superfluous but not seriously damaging.
The Commission did a good job up to a point. But, then, enter left the European Parliament, galumphing on stage, drunk with the power of co-decision, with a series of discriminatory, ill-thought-out and unworkable amendments which, as we have heard, would be damaging to British and Irish chocolate products and utterly at odds with the requirement of the single market.
I hope that I shall not test your Lordships' patience too far if I enlarge briefly on the requirements of the European Parliament. First, and astonishingly, its amendments demanded that all British and Irish milk chocolate made in Britain, sold in Britain and consumed in Britain—let us call it Cadbury's Dairy Milk for the sake of argument—could no longer be sold as "milk chocolate", but only as "milk chocolate with a high milk content". The arrogance is quite astonishing. It is all part of the self-evident benefits of our membership of the European Union, as we are often told.
It appears that we have given away so many of our rights to Brussels that Cadbury's milk chocolate can only be sold in the UK thanks to a derogation which, as your Lordships are aware, is no more than a temporary waiver. Perhaps I may remind the Minister of that when it comes to renegotiating our inshore fishing rights.
The European Parliament voted in its amendment to end that derogation. Another of its amendments also required double labelling with conspicuous wording on the front of the packet, as one might expect to find a health warning on a packet of cigarettes. I do not know whether that is the kind of warning which the noble Lord, Lord Borne, would wish to see; a prominent warning stating, "This product can seriously damage your health if eaten in excess by a chocoholic", as my noble friend Lord Reay tells me he is. I believe that that amendment can be ascribed to a post-prandial lack of focus on the part of the European Parliament.
The Commission, in its recent reply to those amendments, rejected most of the dafter content. The UK/Irish derogation has been restored—at least that is the proposal. Nonetheless, the Commission has accepted the principle of double labelling without any clear indication of where this should be placed on the packet. 457 Although, thanks to derogation—and I suppose that we should be thankful for very small mercies—milk chocolate will still be allowed to be sold as milk chocolate in the United Kingdom, the fact is that under the Commission's current proposals our chocolate will still suffer from discriminatory and pejorative labelling in the rest of the European Union where it will be known in various translations as "household milk chocolate", or "chocolat de ménage", which will not be sold as high quality confectionery but down the counter among the cake mix and Brobat. Do we need the European Parliament?
I read the Government's response to the most recent of the Commission's proposals and I strongly support their sensible and robust line of continued opposition to any double-labelling requirement. I should like to ask the Minister whether the Government will take the opportunity of the UK presidency to go for the full Monty and also press for a single definition of milk chocolate which could be sold as such throughout the European Union. Surely, this is a matter for personal consumer preference and should not be subject to EU or member government interference. That is what the single market is all about and if we cannot get it right with milk chocolate where can we get it right?
Finally, will the Minister give the House an indication, however veiled, of the Government's chances of achieving their aims in the Council of Ministers? In another place, the Minister of State for Agriculture, Fisheries and Food was unequivocal and robust in the extreme. He stated:I make it absolutely clear that the Government will not agree to any situation that discriminates against traditional British products—we simply will not have it".It is not as simple as that. The process is subject to qualified majority voting. Do we have the backing of enough of our partners to carry the day? I much look forward to the Minister's reply and wish him and his colleagues every success in those negotiations.
§ 8.4 p.m.
§ Lord Monson
My Lords, perhaps I may first pay tribute to all noble Lords who have worked hard to contribute to this interesting and commendably brief report. It is no secret that I am a Euro-sceptic, to use convenient if not wholly accurate shorthand. Like most Euro-sceptics, however, I am open-minded and open to persuasion. In this instance, unlike the noble Lord, Lord Willoughby de Broke, I believe that the European Parliament has got it partly right—and I stress the word "partly".
The argument about how many tropical producers will gain and how many will lose if a greater switch away from cocoa butter is made is inconclusive. One suspects that there is little in it. So I wish to concentrate on the interests of the consumer and to a lesser extent the manufacturer. It is important that the consumer should be able to discover exactly what he is eating without having to use a magnifying glass to find out. Some people, including many of my best friends, do not mind about the ingredients so long as the end product tastes all right. Others, including many people on the 458 Continent, particularly in France and Belgium, and myself take the opposite view. I contend that we have a right to know in order to enable us to choose.
Perhaps I may try to dispel a few red herrings. Chief among them is the obsession among continentals about "chocolate with a high milk content". We know that it is possible to make chocolate with a high milk content without using any non-cocoa butter. All British manufacturers did so before 1950 and a few still do. Conversely, some chocolate with no milk content—that is dark chocolate—is made with vegetable fat, notably Bournville. I am astonished that such chocolate is not mentioned anywhere in the report. Therefore, there is no necessary correlation between milk content and the presence of vegetable fat. I suppose that the right description would be "non-cocoa fat" because surely the cocoa bean is a vegetable. No doubt someone will correct me if I am wrong.
The exact ratio of milk to cocoa which people prefer in their chocolate can readily be determined by trial and error. After all, a chocolate bar does not cost much. Therefore, I wholly agree with the committee that there is no need to re-label milk chocolate as "household milk chocolate", or "chocolate with a high milk content", or whatever.
The second red herring or misconception is that this is a question of Britain versus the rest. In fact, many British manufacturers use only cocoa butter, not only Payne's, whose evidence is given in the report, but also Terry's, a distinguished and old-established Yorkshire firm whose chocolate, almost without exception, is entirely made of cocoa butter, Green and Blacks, the makers of excellent organic chocolate which is more expensive than the rest but worth it, and so forth.
Yesterday, I conducted a brief consumer test in advance of the debate. I visited Tesco's, Safeway's, Sainsbury's and Marks & Spencer's but did not manage to visit Waitrose. Without exception, their own-brand chocolate contained only cocoa butter. Some had been made for them on the Continent and put under their own label and some had been made in this country. It is perfectly possible for the British and anyone else to produce "pure" chocolate at a reasonable price.
I turn to the interests of the manufacturer. I do not often agree with the Belgians, but they are right to be worried about the possible long-term adulteration of a product for which they are internationally famous. Food adulteration has a long history the world over. After all, the BSE crisis arose from a desire to cut corners in the interest of keeping prices down. I am not comparing chocolate with beef, but the principle is the same.
Therefore by all means let those who are content with what might be described as popular chocolate—chocolate containing vegetable fat—be free to buy it right across the EU. I agree with the committee about that. But let the labelling of the fat content and composition be clear and prominent so that the more fastidious consumers among us get what we consider to be the genuine article. After all, most of us want to know whether we are buying butter or margarine. That is highly relevant to the labelling of ice-cream. Non-dairy ice-cream has to be prominently labelled as such, and 459 rightly so. It would be wholly consistent with the regulations governing the labelling of ice-cream if it were to be made obligatory to indicate the presence of non-cocoa fat in chocolate with equal prominence.
I agree with the committee that it would be going too far to insist that any such indication should be on the front of the packet. On the other hand, I contend that it should be printed in a reasonably large and legible type-face, requiring the minimum alteration of machinery and the precise minimum size to be determined but at any rate to be larger than that used for the other ingredients.
§ 8.10 p.m.
§ Lord Pearson of Rannoch
My Lords, I rise to speak very briefly and in support and amplification of what other noble Lords, particularly my noble friend Lord Willoughby de Broke, has just said. It follows that I am afraid I will not be able to agree with much of what the noble Lord, Lord Borrie, said.
I really just want to point out, not for the first time in your Lordships' House, that the single market is not really working as we hoped it would when the Conservative government supported it so strongly in 1985. The aspect which so often goes against our interest is the system of qualified majority voting, to which my noble friend Lord Willoughby de Broke referred.
Thanks to single market legislation this system now applies to all our industry and commerce, to our environment, transport, European culture (whatever that turns out to be), and the workings of the common agriculture and fisheries policies and, of course, there are further extensions to qualified majority voting and the co-decision procedure in the Amsterdam Treaty which your Lordships are considering.
I suppose, once again, just for the record, it is worth spelling out how that system of qualified majority voting works. There are 87 votes among the 15 member states, of which 62 are required to carry a motion and 26 to block one. We have only 10 votes and we are often alone. We are often alone because our global economic interests are not shared by the other EU nations.
This is the system which makes us powerless to defend so many other British interests such as our international art market, the impending destruction of which is threatened by a new Euro tax—droit de suite—and much increased VAT. These additional taxes will not apply in New York or Geneva which are the principal competitors of London and so much of our trade is already moving away from London to these centres. For details of this comic, if it were not so tragic, situation, I would recommend that your Lordships read debates in this House of 10th December 1997 and 11th December 1996.
For other examples of the detailed way in which this system works to prevent EU reform in general and against United Kingdom interests in particular, I recommend your Lordships' debate on the fruit and 460 vegetable regime of 18th March 1996, enlargement and the common agriculture policy on 15th October 1996 and the tobacco regime on 9th June 1997.
There are dozens of other examples of British interests which are being threatened or are already damaged by Euro-legislation and which we can do nothing about. These would include, for example, waste disposal, slaughtermen, the working week, herbal medicines, dairy farmers, cheese makers, food transporters, whisky distillers, pheasant shooting, market gardeners and paper rounds. And as I have mentioned before, there is also the excellent lavatory designed by Thomas Crapper.
Obviously I am going to ask the Minister if he can tell the House whether this qualified majority system of voting will apply in this case and with what confidence he thinks the Government face the prospect of carrying their way.
There is one difficulty for my noble friend on the Front Bench, as I have indicated, which is that the Conservative Party, of which, of course, I am proud to form part, still claims that the single market, as opposed to the common market, is its greatest achievement in Europe. Therefore, many Conservatives are reluctant to acknowledge the damage caused by the way the EU's QMV system often works to our detriment.
Apart from that, the single market legislation throws up masses of red tape which is particularly damaging to our smaller and medium-sized enterprises. As I said earlier, generally speaking, it is not working as we hoped it would. But in the particular case of this very irritating situation over chocolate, I really look forward to the noble Lord telling us whether he agrees that the system is not ideal or whether he can assure us that the Government will carry the day in Brussels.
§ 8.15 p.m.
§ Lord Redesdale
My Lords, I start by thanking the noble Lord, Lord Reay, for his excellent chairmanship of the committee. I shall reserve my comments to chocolate alone.
I must admit to a great deal of disappointment at the start of my membership of the committee because I was under the impression that we were going to be given vast masses of chocolate to see whether we could detect the difference and taste the vegetable fats. However, I believe that we were following the example set by the Select Committee on Science and Technology which was looking into the medicinal use of cannabis in directing ourselves away from testing the product.
When it was introduced, this directive had the support of all parties, including the Conservative Party. Therefore, it could not be accused of being left on its own. I believe that everybody welcomed the directive. It did not set out to achieve total harmonisation, although that was another of the amendments which was rejected by the parliament. However, it goes quite a long way towards breaking down the barriers to the sale of British-style milk chocolate in Europe.
One of the problems demonstrated by the report is that the report was in reaction to amendments tabled by the European Parliament. Perhaps we should put that in 461 perspective because many of the amendments by MEPs were put forward to protect their own chocolate industries. I took out the press cuttings and looked with interest at the outrage expressed in the British media about the destruction of the chocolate industry in this country and how we were no longer to have milk chocolate. But many of the amendments were tabled in the European Parliament by MEPs from Belgium to protect their own traditional chocolate. It is amazing how culturally divergent the European superstate still is.
I do not believe that the amendments which were tabled should have been carried. I can understand the reason for them. I can understand also the support which the noble Lord, Lord Borrie, expressed for clear labelling on chocolate. He expressed support for labelling on the front of the product. As a member of the committee, I could not support that because I believe that the purpose of the amendment was to denigrate the product itself. I believe that the vegetable fats should be listed among the ingredients. I do not see that there is any difference between the percentage of vegetable fats and any other ingredients. Even though, in theory, E-numbers can be quite harmful to health, they are not put on the front of products.
§ Lord Monson
My Lords, is the noble Lord aware that vegetable fats are already listed among the ingredients? What the noble Lord suggests would introduce nothing new. They are already listed among the ingredients upon any bar of chocolate that can be purchased in this country.
§ Lord Redesdale
My Lords, that just emphasises the point. I do not believe that there is any need for vegetable fats to be highlighted to the extent that the amendments pushed for. I believe that people within Europe already travel, and taste and test different types of chocolate, without significant labelling, in countries throughout the European Union without harmful consequences.
I understand the worry expressed by chocolate manufacturers in other countries: that there will be a flood of imported chocolate which would be significantly cheaper and therefore would undercut their traditional markets.
As overseas development spokesman I also take on board the important point raised that countries which produce cocoa are worried about the threat to the price of what is a staple product. The effect that the disease to the plants in Brazil has had in reducing supply should not be underestimated. That has sent up the price recently. However, there are other African countries, some of the poorest in the world, Mali and Burkina Faso, which could happily profit from the production of vegetable fats. I support the view that an increase in the range of products will automatically lead to an increase in consumption. There are few people in this country who eat less chocolate than they did a few years ago.
I believe that the aim of the report, to support the directive, is going in the right direction. I hope that reason will prevail and open markets will be the way of the future.
462 I conclude by asking the Minister whether he can give the House an assurance that he will look closely at any recommendations that are to be discussed as regards drinking chocolate and the use of the word "chocolate cake".
§ 8.21 p.m.
§ Baroness Anelay of St Johns
My Lords, I, too, add my congratulations to the committee for all its work on producing such a robust and clearly argued report and in particular to the chairman, my noble friend Lord Reay, for giving the House the opportunity to debate the issues covered in that report this evening.
This debate goes to the heart of what should comprise the functions of a European trading community. The questions to be answered are these. What powers should be exercised by the Commission and Parliament in determining three things: what manufacturers can make and sell in the United Kingdom; whether they can sell that product freely to others within the European Union, and whether they can sell those products without being forced to adopt labelling which makes them appear to the consumer to be a second class product. These questions fall to be answered with respect to the chocolate directive. There are two main issues, as noble Lords have outlined tonight: the use of non-cocoa vegetable fat, and the sales name for our style of milk chocolate with its high milk content.
I welcome in most respects the Commission's 1996 proposal to revise the cocoa and chocolate products directive. It makes the single market more of a reality. It would allow chocolate with up to 5 per cent. vegetable fat to move freely within the European Union provided that it is properly labelled, although some member states may prohibit its domestic production. I note as others have this evening, that the Commission's proposal for labelling was neutral. A simple statement adjacent to the list of ingredients which informed the consumer that the product contained vegetable fat would surely be sufficient. Several of those who submitted evidence to the committee pointed out that this would introduce `double labelling', but that it would be acceptable as a sensible way out of arguments over labelling. They argue that after all, those manufacturers who do not use vegetable fats could always be free to make a claim to that effect if they so wished.
I note that the committee's report states that it is willing to accept the double labelling as a temporary measure, whereas it is against the matter continuing on a long-term basis. I find arguments against long-term existence of double labelling persuasive. I would, however, go further and say that I believe there is no argument for double labelling to exist in any form. As the noble Lord, Lord Reay, mentioned in opening this debate, double labelling is inherently unnecessary. If so, I could not recommend it to persist now.
Before I entered the Chamber this evening I approached my noble friend Lord Pearson of Rannoch and said that I was to make a statement with regard to my European beliefs which might dismay him. But we have recognised that we are happy to be part of the same party. We have the same objectives, I would imagine, on 463 99.9 per cent., if not 100 per cent., of issues. Tonight, although we may come from slightly different approaches towards our views on the European Community, I am sure that we agree on the ultimate objective. I consider myself to be very much a European in the sense that I feel at home with the culture and structures of countries within the European Union. I note some scepticism tonight about how one might define culture. All I can say is that, wherever I am within the European Community, I feel that I have some commonality with it.
It is from that angle that I approached the question of this directive and the amendments that were proposed by the European Parliament. I was deeply disappointed by the fact that the European Parliament had decided to vote for an amendment which would discriminate so unfairly against UK producers in two significant ways. First, it would have required front-of-pack labelling of the fact that the chocolate contains vegetable fat. This was clearly intended to make UK chocolate with vegetable fat appear inferior. I cannot believe that it was done for any other purpose. As the report points out, front-of-pack labelling in this country is associated in the public mind only with health warnings. Secondly, the amendment would have meant that the UK designation "milk chocolate" would be replaced in the UK by the term "milk chocolate with high milk content"—gobbledegook that would have served only to confuse consumers.
As the noble Lord, Lord Borrie, mentioned, the Consumers' Association responded, perhaps not with sufficient length to provide him with the information he might have been happy to see. But I noted that one of its comments in its submission was that,one recipe is not inferior to the other, they are just different".With that, I agree. It is not the case that one chocolate is pure and therefore conversely the other must be impure or that one is adulterated and one is real chocolate. They are simply different types of chocolate.
Thirdly, I was disappointed, to say the least, that the definition of United Kingdom milk chocolate was to be confirmed for use in other European languages as "household chocolate", a name which conjures up the idea that it is only suitable for cooking. Certainly, I would say that some cooking chocolates are extremely good, but if one talks of "household chocolate" as a general description, it is certainly one which would appear to denigrate the contents of that chocolate.
Chocolate with a high milk content is traditionally very popular in the United Kingdom and reflects our dairying tradition. I have grown up in the post-war period when "Milk is good for you" was the accepted wisdom—accepted by my parents, at least. Wise or not—and of course I believe they were wise—the taste of our milk chocolate is excellent. I note that the Minister agrees, and he is quite right: it is an excellent taste. I note that in the United Kingdom we consume up to½ million tonnes a year—over 9 kilograms a person—and I confess, as I stand here, that I enjoy my fair share.
On a more practical note, vegetable fats have been used for many years in small quantities to complement the cocoa butter to give the chocolate characteristics we 464 consumers like. My noble friend Lord Reay explained the technical advantages that such use can give to the chocolate.
The amendment moved by the European Parliament and other attempts to denigrate the traditional United Kingdom product ignore the fact that it is in the ultimate interests of all, including cocoa producers, to ensure that the production of chocolate responds flexibly to consumer demand. I understand that many Members of the European Parliament voted for that amendment because they said that they were persuaded that the reduced portions of cocoa in chocolate would damage the economies of developing countries, such as the Ivory Coast and Ghana. I believe that to be a fallacious argument on two counts.
First, as my noble friend Lord Reay said, any expansion of world trade in chocolate and cocoa products is good for primary producers of cocoa beans; it has to be. Whether or not chocolate contains 5 per cent. vegetable fat, any expansion of the market will still require more cocoa to be used. Secondly, the raw materials used to produce the speciality non-cocoa fats also come from developing countries. The shea nuts harvested in Burkina Faso, in villages where the work is carried out almost entirely by women, are a case in point. The trade there has important social and progressive consequences. The women do most of the work. They combine to form village co-operatives to shell and paste the nuts. The profits that they achieve make it possible for them to send their children to school and achieve some measure of economic independence; for example, by forming small businesses such as market gardening. The shea nut trade is at least as important to the economies of countries like Burkina Faso and Mali as cocoa is to the Côte d'Ivoire and Ghana.
A more cynical mind than mine—and I heard echoes of this from the Benches to my right from the noble Lord, Lord Redesdale—might come to the conclusion that some Members of the European Parliament were hiding the pursuit of their own national advantage behind the camouflage of a professed concern for the economies of certain developing countries. I hope that we have seen the end of such arguments and the end of those amendments.
Of course, as has been mentioned tonight, there are some producers in the United Kingdom who do not use vegetable fats in their production of chocolate. They are notable, as the noble Lord, Lord Monson, commented, for the high quality of their product. As so many products have been bandied around in the debate, perhaps I may add the name of Thorntons to those already mentioned. However, I regret to say that I did no market testing before entering the Chamber; but perhaps I will do so later. There is no reason to believe that they or their continental counterparts will be at a disadvantage in trading or that they will change their recipes if they have to compete equally with traditional UK milk chocolate in the EU. I note that Thorntons recognised that fact on giving evidence to the committee.
465 It is essential that we avoid putting the interests of individual classes of producers above those of the consumer. The European Parliament amendment was indeed an unwarranted discrimination against an excellent product that our consumers have enjoyed for over 100 years. As I said, I hope that we have seen the end of it.
We on these Benches support and welcome the Government's general approach, which is generally the line that we took when in office. Can the Minister tell the House tonight what progress Her Majesty's Government have made during their presidency of the European Union towards reaching agreement on a new directive, especially bearing in mind the Commission's recent pronouncements? Can the Minister also tell us what bilateral meetings the Government have been able to hold with other member states? Further, can the noble Lord say when the Government expect an agreement to be reached?
On a practical level, if by any chance there were a failure to reach such an agreement—I hope that that will not be the case and I understand that the Government are making all best efforts in that respect—what would the legal position be for our UK manufacturers? Would they return to the status quo? Further, what would they be allowed to manufacture and under what conditions? Above all, we on these Benches would urge that any new legislation on chocolate should allow different chocolate-making traditions to co-exist in a market where EU consumers are free to choose from a wide range of chocolate products.
§ 8.34 p.m.
§ The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Lord Donoughue)
My Lords, this has been an excellent debate, marked by a near consensus, although I noticed some faint inclination towards the margin of differentiation from my noble friend sitting behind me, and greatly assisted by contributions from three members of this distinguished committee which has produced such a fine report.
I should like, first, to thank the chairman of the committee, the noble Lord, Lord Reay, for providing me with a welcome opportunity to respond formally on behalf of the Government to the Select Committee's report on the proposed new directive on cocoa and chocolate products for human consumption. My speech tonight should be viewed as our formal response to the committee.
I shall begin by congratulating the committee. The report provides an excellent summary of a complex subject and a useful analysis of the issues involved which are of particular importance to the United Kingdom. The written evidence also makes interesting reading and demonstrates the range of interests that have been consulted.
The Government are pleased to note that the committee welcomes the stated objectives of the proposed directive, the most important of which is to secure free circulation of chocolate containing 466 non-cocoa vegetable fats, as a measure to implement the single market. Like the previous administration, we firmly believe that different chocolate-making traditions within the European Community should be allowed to co-exist in a genuine single market.
We welcome the committee's rejection of the European Parliament's amendments. I can confirm that, as anticipated, the Commission's amended proposal for the directive (which was finally published in the Official Journal on 17th April) also rejected the majority of the Parliament's amendments. As indicated in the explanatory memorandum that we have submitted to the scrutiny committee, the amended proposal takes account of part of the Parliament's amendment on the labelling of products containing non-cocoa vegetable fats. It now requires such products to be labelled with a "conspicuous and clearly legible" statement, in addition to the list of ingredients and clearly distinct from it, that the product,contains vegetable fats other than cocoa butter".However, contrary to the Parliament's view that the statement should be on the front of the package, the Commission has sensibly concluded that the location of the statement should be left to the manufacturer. Your Lordships' committee has suggested that any requirement for manufacturers to include a separate statement indicating the presence of non-cocoa vegetable fats should be a temporary measure as a possible compromise. The Government understand the merits of this suggestion but remain of the view—and I stress this to my noble friend Lord Borne, while respecting his opposing view—that additional labelling is unnecessary and are opposed to it in principle. But, like the committee, we fully recognise the need to seek to ensure that manufacturers have adequate time to implement any changes in labelling, or otherwise, in a new directive.
It may be helpful if I confirm that the Commission's amended proposal only takes account of three other minor amendments proposed by the European Parliament. These clarify the reference in the text to the Community rules on additives used in foodstuffs and would provide a clearer definition of two specialist types of chocolate—I hope that I pronounce them correctly"—Gianduia" and "Gianduia milk chocolate". All the other amendments proposed by the European Parliament, including the removal of the current derogation for UK milk chocolate, have been rejected by the Commission.
The Government note the importance that the committee attaches to the retention of the derogation for UK milk chocolate and its view that ultimately there should be a single definition of milk chocolate. I should like to assure your Lordships that we will take a robust stance in relation to our own "milkier" milk chocolate and will do all we can to ensure that when the product is sold in other member states it is not labelled in a derogatory manner. I think a point that is often overlooked by our European neighbours is that the higher milk content of our milk chocolate provides a higher value product. It is also "farming friendly" by providing an additional outlet for the milk produced by European farmers.
467 The Government welcome the conclusion of the committee that the option of using non-cocoa vegetable fats in chocolate throughout the European Union will not necessarily have a negative impact on cocoa-producing countries; and that those developing countries which produce the raw materials for non-cocoa vegetable fats will benefit. There are, of course, significant uncertainties about the possible effect of the proposed directive on cocoa producers and other developing countries. The Government share the view of the committee that long-term development strategies should be based on helping countries respond to shifts in consumer demand patterns.
With regard to methods of measurement for non-cocoa butter vegetable fats, the Government fully agree with the committee's view that there is no need to delay implementation of the proposed directive until more accurate tests are available. Methods which already exist for those fats are no less precise than those for other components in chocolate and these are complemented by in-factory checks of records and recipes, which provide far better reassurance and would be capable of being undertaken on a pan-European basis if genuinely harmonised provisions can be agreed.
I now turn to some of the points raised during the debate. The noble Baroness, Lady Anelay, and the noble Lord, Lord Willoughby de Broke, asked about progress towards reaching agreement on the directive. I assure the noble Baroness and the noble Lord that my right honourable friend the Minister of Agriculture, Fisheries and Food and other colleagues, especially the Minister for Trade and Competitiveness in Europe, my noble friend Lord Simon of Highbury, have taken every opportunity to raise the subject in bilateral talks with their counterparts. At a debate in the internal market Council last November we were only five votes short of the necessary qualified majority in favour of the use of vegetable fats. We want to do all that we can to ensure that other member states understand our concerns and to see whether we can find a solution to this matter during our presidency. I hope the noble Baroness will agree that it would not be appropriate to disclose details of negotiations at this stage. As regards timing—
§ Lord Pearson of Rannoch
My Lords, I hope the noble Lord can help the House. When he says that we were only five votes short—of course I accept that we should not press him into revealing from which countries the general voting structure emerged—can he tell us whether he is looking for 26 votes to block an initiative, or 62 votes to promote a new one, out of the 87 votes which I mentioned?
§ Lord Donoughue
My Lords, I do not propose to reveal our strategy in this House. Therefore I would rather not answer that question.
§ Lord Pearson of Rannoch
My Lords, it is not a matter of strategy; it is a matter of fact. Are we trying to block something or are we trying to promote 468 something? We need 62 out of 87 votes to promote what would be a new policy, and we need 26 votes out of 87 to block something that we do not want.
§ Lord Donoughue
My Lords, I am aware of the figures that the noble Lord has put before the House on more than one occasion. However, I do not propose to go beyond my previous reply. This is a matter of qualified majority voting.
As regards timing, I hope that it will be possible for the Council to reach a common position on the proposed directive during our presidency. The existing directive will continue to be implemented until a new directive is agreed. UK manufacturers will be able to continue to use non-cocoa vegetable fats in their products in accordance with existing conditions. They will also be able to continue to make milk chocolate with a higher milk content and sell it as milk chocolate in this country. But when it is exported to member states it will have to be called the equivalent of milk chocolate with a high milk content. In some languages this is translated in a derogatory way as household milk chocolate, as a number of noble Lords have pointed out.
As regards our legal position, if there is a failure in that regard I shall write to the noble Baroness about it. The noble Lord, Lord Willoughby de Broke, asked about a single definition of milk chocolate. I have already touched on that. I point out that the Government have proposed such a single definition on several occasions but so far the majority of member states want two separate definitions.
The noble Lord, Lord Monson, asked whether vegetable fats should be listed on labels. Our reservation about that is that it would be unnecessarily restrictive for manufacturers and could limit technological developments. The noble Lord, Lord Redesdale, was a member of the committee. He referred to drinking chocolate and chocolate cake. I reassure him that the proposed chocolate directive safeguards the use of such customary names. We shall certainly resist any attempts to change that. I believe the noble Lord said that few people eat less chocolate now than they did a few years ago. I agree with that in general but, sadly, I must confess that it does not apply to me. I am deprived of all the delights of market testing that have been mentioned. This debate has revived happy memories of chocolate delights enjoyed long ago.
In conclusion, I refer to the central question of the noble Lord, Lord Reay. I should make it clear that the Government will not agree to any solution which discriminates against traditional British products or narrows the effective range of choice of British consumers. I say in particular to the noble Lord, Lord Willoughby de Broke, that during our presidency we shall do our utmost to search for a genuinely inclusive single solution which allows all the different chocolate-making traditions in the Community to co-exist within a fair and genuinely harmonised single market. As I have said, my noble friend the Minister has had discussions with colleagues and we remain hopeful that the Council will reach a common position on the proposed directive during our presidency.
§ 8.50 p.m.
§ Lord Reay
My Lords, I thank all those who have taken part in this brief debate, both those who were members of the sub-committee and those, such as the noble Lord, Lord Borne, and my noble friend Lord Pearson of Rannoch, who were not members. It is always uplifting for members of European Community sub-committees to find others who are interested in what they say.
As the noble Lord, Lord Donoughue, pointed out, the debate was characterised by a considerable measure of agreement. I felt quite comfortable with the support that we received from some of this House's most notable Euro-sceptics—a situation in which, some years ago, I should not have expected to find myself.
I agreed with almost all the remarks of my noble friend Lord Willoughby de Broke, and with much of what the noble Lord, Lord Monson, said—although it is perhaps worth pointing out that non-cocoa fats are contained in many foods without there being any separate statement of that fact on the package. As regards my noble friend Lord Pearson of Rannoch, he went into areas which I should not want to go into myself, at least in this particular debate.
470 With regard to the slightly dissentient viewpoint of the noble Lord, Lord Borrie, I agree with him that the two types of milk chocolate are in some respects different products, and should, I entirely agree, be free to compete with each other on the market with proper descriptions of their differences for the consumer. Our view was that they should be allowed to compete with each other as different forms of milk chocolate in the same product category. We did not see why British and Irish milk chocolate should not be allowed to be sold as milk chocolate. It seems to us that the problem for British and Irish milk chocolate has derived from the fact that they have been obliged to occupy different product categories in the directive.
I thank the Minister for his reply, which I note is to be treated as the formal response to the report. We shall want to study it carefully. I was pleased to hear the noble Lord repeat his firm stance on milk chocolate, and also more generally in his concluding remarks. I appreciate that there is a need for him to be cautious in his remarks about government strategy in the Council of Ministers. I hope he is right in his belief that a conclusion can be reached within the period of the UK presidency. I commend the report to the House.
§ On Question, Motion agreed to.
§ House adjourned at eight minutes before nine o'clock.