Benefits and costs of EU marketing standards for agri-food products: Workshop Report

This Report summarizes the findings emerging from the online workshop on ‘Marketing Standards: Benefits and costs of EU marketing standards for agri-food products’ which was organized by the Directorate-General for Agriculture and Rural Development (DG-AGRI) and Joint Research Centre (JRC) on September 9th 2021. The discussion revolves around three main issues regarding the EU marketing standards: i) Do the benefits from current regulation exceed the costs? ii) What are the implications of EU regulations for international trade and producers? and iii) What are the possible effects of a change in regulation, updating EU marketing standards to promote a sustainable agri-food system and adjust to changes in consumer preferences and technology? The benefits and costs of EU marketing standards are difficult to measure since they may vary with many factors including product characteristics, quality of local institutions and organization of the supply chain. In general, the benefits are considered to exceed the costs, but general assessments are difficult. The main benefits are: granting market access, lowering transaction costs, ensuring a minimum level of food quality and safety, preventing misleading claims, favouring quality-based marketing strategies (product differentiation). The key issues for international trade concern the cost of adopting EU regulations and the heterogeneity of existing standards. The impact of the former issue appears to be limited, especially if strict private standards are in place. Heterogeneity of standards can discourage trade, but national and international institutions can take actions to alleviate the problem. Updating marketing standards to better represent consumer preferences may increase the efficiency of agri- food markets. However, the regulation and adoption costs suggest that this action is undertaken only if the change in preference is appreciable, lasting and involves a large number of consumers. EU marketing standards can be updated to facilitate achievement of sustainability targets. Nevertheless, this strategy may result in unintended consequences if consumers are not willing to pay for sustainability attributes, and could lead to an increase in international trade litigations.