From next month, Switzerland will loosen its regulations on food imports from the EU. Peter Crosskey discusses the impact this could have for the country’s manufacturers, retailers and consumers.
Switzerland has brought forward its schedule for allowing EU imports equal market access alongside Swiss products, including food.
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As of 1 July, the product approval procedures that once ensured that EU imports were dearer than Swiss equivalents will be simplified: the only remaining bans will be on a short-list of products, including battery eggs and rabbit meat from systems banned in Switzerland, but mainly non-food items and medicines.
What the country’s ruling Federal Council had previously scheduled for enactment in late 2012 has been catapaulted forwards by two years, amid growing concern from some Swiss food producers over the impact on the national economy. Food standards have been on the agenda in routine talks with the EU for years, even though a 1992 referendum on applying for EU membership was rejected by Swiss voters and most preconditions for opening membership talks still have not been met for many Swiss politicians.
The Federal Council’s offer of easier access for EU food imports makes few demands on traders, beyond ensuring that the product concerned complies with EU food regulations. If it can legally be sold in the EU, then it will be possible to authorise it for sale in Switzerland – although the Swiss enforcement of EU standards will be thorough.
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The authorisation process should be straightforward and will cost CHF500 per application. The applicant will be required to prove that the products concerned can be offered for sale legally in the EU, citing relevant national legislation, as well as guaranteeing that the products do not break any Swiss laws.
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By GlobalDataIn addition to the rabbit meat and battery egg requirements, Switzerland also has a strict ban on GM foods or ingredients. Applicants will also need to list the countries in which the products concerned are already on sale.
This decree makes no reciprocal requirement of the EU in what is being described as an application of “the Cassis de Dijon principle”. This is a reference to a 1979 European court case successfully brought by an exporter of French liqueur against the German authorities for banning his product on the grounds that it did not meet the alcohol levels stipulated by national legislation.
The Swiss food industry federation FIAL has historically accepted the inevitability of having to work in a wider European context, although its previous policy statements had expectations of transitional support for domestic food producers. FIAL co-president Dr Franz Schmid told just-food: “At first our main worry was discrimination [against Swiss products] and we were opposed to it, but there may not be so many products [authorised] to start.
“It will drive more competition. We must see how the authorisation process works in practice – it might be as slow as it is in Germany.” Nevertheless, Schmid would have liked to see the Cassis principle applied in both directions.
The Federal Council’s main target is to cut the Swiss food price differential: “Food prices in Switzerland are 25% to 30% higher on average than in the EU,” explained Schmid. Food manufacturers pay EUR4.50 per kg more than the EU average for Swiss butter, so, as Schmid pointed out “Swiss biscuits will be dearer”.
Swiss food manufacturers will expect a certain leeway to adopt EU standards, too. The use of non-dairy fats in Swiss ice cream, for instance, could become an option in the future.
Politically, the transition has been something of a Trojan horse: “When Doris Leuthard first suggested the changes, she gave examples of things like kitchen equipment, but not food,” Schmid observed.
For all the activity that this change is expected to generate, Swiss shoppers are unlikely to change habits cultivated over years. As Migros spokesperson Martina Bosshard told just-food: “Many Swiss consumers go to a lot of trouble to buy high-quality food, produced in sustainable ways and ideally of Swiss origin.”
Referring to the confederation as “an island of high Swiss prices”, Bosshard believes that cross-border shopping costs the Swiss economy as much CHF2bn a year in areas close to the borders. However, currency rates are also a major factor in the attractiveness of cross-border shopping.
As one of the largest Swiss food manufacturers for the domestic market, the Migros view of the challenges ahead is measured. “Competition is not a bad thing in itself,” said Bosshard. However, she added: “It will not be simple at the outset.”
There is at least a two-way trade for Migros manufacturing subsidiaries. “We are not starting out with the idea that Switzerland will soon be submerged under waves of cheap goods from the EU. Migros manufacturing subsidiaries such as Chocolat Frey or Mibelle are already successful exporters and perfectly capable of competing with European businesses,” Bosshard said.
Nor, she claimed, are EU and Swiss standards that far apart. “Migros already demands that all suppliers observe international standards, so suppliers already have to comply with the Business Social Compliance Initiative and our fresh produce suppliers must certify that they meet GlobalGAP standards.”
Migros, at least, is facing the future with confidence. “We are sure that our strategy of sustainably improving the quality of life for consumers, as well as being mindful of ecological and social aspects, gives us the necessary trump cards to meet future challenges,” Bosshard added.
