Graham Brookes¹, Chris Downes^2,3
1. PG Economics Ltd, Dorchester, United Kingdom
2. EU Food Speciality Ingredients, Brussels, Belgium
3. European Consulting Company (ECCO) Brussels, Belgium

Abstract

Regulations can have a crucial impact on the time taken to bring new products to the market, and consequently on a company’s expected returns on investment. This article analyses the regulatory costs associated with EU legislation, in particular regulations on novel foods and health claims. It finds that current delays and uncertainty surrounding authorisation procedures risk creating a major obstacle to European food innovation. Some proposals are made for addressing these regulatory barriers.

‘Innovation’ remains a buzzword in EU policy circles and a key strategic goal as Europe seeks to assert its competitive edge in the global market. Looking beyond the rhetoric, what are the challenges for innovators in the food industry and what role can European regulators play in stimulating innovation? This article, drawing on research commissioned by EU Food Speciality Ingredients (1), highlights the regulatory obstacles confronting the food ingredient industry, their impact on businesses and strategies to reduce the regulatory burden.

The EU food ingredient sector today
Around 200 businesses are involved in the EU speciality food ingredient market, today worth around €16 billion. The EU, therefore, has a significant share of the global market valued at €40 billion and employing 90,000 people. Just under a quarter of the companies involved in the sector are small or medium enterprises.

What is the cost of innovation?
Innovative companies typically spend between 4% and 6% of their annual turnover on research and development, although some may spend as much as 8 percent. The total research and development ...