Economies threatened by chocolate compromise

Several African countries depend on Europe's sweet tooth

Cocoa-producing countries in Africa could suffer heavy losses if a compromise on chocolate already agreed by European Union officials is approved by the European Parliament. The compromise is designed to end a 25-year row between members of the EU on the use of vegetable fats in place of cocoa fat in chocolate.

The new ruling would allow chocolate-makers to use less cocoa butter in their products and still call them chocolate.

Traders say the new rules could cut cocoa consumption in Europe by up to 1,000 tonnes a year, leading to estimated financial losses among developing countries of at least $500m.

Cocoa dependency

Cocoa grows in a belt around the Equator - and is a mainstay of many West African economies with millions of people depending on it for their livelihood.

Cocoa-growers have already suffered this year with prices for the bean falling sharply over the past year.

When the EU Commission first tabled its proposals, it drew harsh criticism from cocoa-growing countries.

An official from Ivory Coast - the world's biggest cocoa producer - said they would "fight until the end" against the directive.

Ghana, whose economy is largely based on cocoa production, also denounced the EU proposal.

A finance ministry official described the move as "a stab in the back of cocoa producers and a wake-up call to producers to think of their future".

Beneficiaries

However, some West African countries, including Burkina Faso and Mali, stand to benefit.

Both countries export shea butter - from the nut of the Shea tree - which as a substitute for cocoa butter could make inroads into the lucrative chocolate market. [Typical Divide and Rule Tactics--MARTIN]

The UK and Irish chocolate industries are expected to be the main beneficiaries of the proposal, though, opening up a vast new market for their products.

The UK, Ireland and Denmark were granted special exemptions to laws banning the use of cocoa butter substitutes when they joined the EU in 1973.

Internal EU wrangles

But this has angered chocolate-making countries like Belgium, which claims the product is inferior to its all-cocoa confection.

Under the compromise deal approved on Thursday, chocolate made with more than 5% of vegetable fat can be sold across the EU, but must be clearly labelled and called "family milk chocolate".

In countries which currently produce it, however, it can still be called simply "chocolate".

The vegetable fat must come from a list of six specific tropical plants, including mango and palm oil.