EU green rules will drive up price of coffee, warns Lavazza
Giuseppe Lavazza has called on Brussels to delay the implementation of incoming deforestation laws for another year, as he warned they could unleash a new supply crunch across the Continent and drive up prices.
That will have more of an impact on coffee prices than the 10pc tariffs America is likely to impose on Europe, he added.
He criticised the impending rollout of the so-called EU Deforestation Regulation (EUDR) in December, which will require companies importing goods such as beef, cocoa and coffee to prove their supply chains do not contribute to the destruction of the world's forests.
Mr Lavazza said he feared that the looming legislation could prevent his company from trading with suppliers in key coffee markets such as Ethiopia and Indonesia. He said there was an uncertainty around ownership of land in these countries, which was a major obstacle to enabling Lavazza to trace the full supply chains.
He said: 'For example, I don't know how Ethiopia can comply with such regulation. And Ethiopia is such an important country for coffee supplies. Indonesia is another country that could disappear from the radar.'
Mr Lavazza told an event in London: 'Mr Trump is talking about tariffs, but he keeps changing his mind. They are not good, but we can manage them.
'The EUDR is very tough because it puts some very strong limits on European roasters to import good coffee.
'We have many, many concerns that the regulation will introduce a lot of distortion into the market. This is something we are hoping to avoid because otherwise, coffee will cost a whole lot more in Europe.'
Asked if it will have more of an impact than tariffs, he said: 'Yes, absolutely. Compared to tariffs of 10pc, the regulation will have a huge impact. Especially because the fine you pay if you make an infraction is disproportionate.
'It can be up to 4pc of revenues, it's nonsense. The risk of a fine is enormous.
'But in the UK, you won't have that problem because you don't have EUDR. You are lucky. We are calling for that regulation to be postponed for another year.'
It comes after coffee prices hit a record high of $4.01 (£2.96) per pound in April, which Mr Lavazza blamed on hedge funds speculating in the market. They have since fallen to $2.87.
His comments echo similar calls made by Cadbury owner Mondelez earlier this week, which also urged Brussels to delay the legislation.
Coffee prices jumped again on Thursday after Mr Trump threatened 50pc tariffs on Brazil, the world's biggest producer.
Separately, Mr Lavazza also unveiled plans to accelerate the expansion of its US manufacturing plant to reduce the impact of export tariffs.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
39 minutes ago
- Daily Mail
TONY HETHERINGTON: Dad's £54,000 van has a brake fault but he can't get a refund
Tony Hetherington is Financial Mail on Sunday's ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below. Ms S.L. writes: My father purchased a new Mercedes Vito from LSH Auto in Stockport. This is a high-spec five-seater vehicle which he and my mother bought for £54,344, intending to take the family to France this summer. Soon after purchase, it became apparent that the van has a grave fault with its automatic emergency braking system. Now LSH Auto has the van, which my father took back, and his money. Tony Hetherington replies: The van's fault is pretty frightening. It would brake suddenly and violently when there were no other vehicles near it and no objects in its path. Your father contacted LSH Auto for advice and took the van back to be checked. The same random braking then happened while one of the dealer's engineers was at the wheel. This was so dramatic he ruled it could not be taken back on public roads. LSH Auto is not some backstreet second-hand car company. It is a Mercedes-Benz dealer with a large, impressive site and its most recent accounts show a one-year turnover of £255 million. Staff contacted Mercedes-Benz in Germany and then told your father that the van had a software problem for which there was no current solution. A new system was needed and this could take six months to a year. Your father, quite reasonably, expected to get his money back, but you told me that Mercedes-Benz wanted LSH Auto to pay, while the Stockport company wanted the Germans to pay. Meanwhile, LSH Auto refused to release the van unless your father signed a legal waiver to agree that if the van caused any injury to anyone, or any damage to other vehicles or property, LSH Auto and Mercedes would not be held liable. Not surprisingly, your father refused to sign, which meant that, when you contacted me, LSH Auto had both the van and the £54,344 – and your family's Channel ferry booking looked as though it had been sunk without trace. I put all this to both LSH Auto and Mercedes. If the van had a fault so serious that it was dangerous to drive, surely this means it was not fit to be sold in the first place? A few hours later, your father received a call from the Stockport dealer, offering a full refund. I received a statement from the firm that did not go this far but did tell me that LSH Auto 'is in active discussion with the customer'. It took about a fortnight for the cash to land in your father's bank account, and for LSH Auto to give me an updated statement saying that management 'has been in active discussions with the customer and has now resolved the concerns raised'. I suspect the delay in paying may have been the time it took the dealer to agree with Mercedes exactly who would foot the bill. Tripadvisor won't take off N.W. writes: I owned a hotel in Blackpool for many years, and as part of our advertising we used the Business Advantage scheme from Tripadvisor. I sold the hotel in January and informed Tripadvisor, but it has just charged me £680 subscription to the scheme. I cannot find a way to cancel. Tony Hetherington replies: Tripadvisor describes Business Advantage as a subscription service that attracts and influences potential customers by adding various bells and whistles to the hotel's page on its website. You paid for Business Advantage with your credit card, so when the subscription was due for renewal, Tripadvisor simply charged your card. When I contacted Tripadvisor, I was told it had no record of your cancellation and it would accept a cancellation only from the hotel's email address. I explained again that you had sold the hotel so had no access to its emails. Tripadvisor's answer was to tell you to ask the new owner to take over the payments. You barely know the new owner, though. I asked Tripadvisor repeatedly whether it plans to carry on collecting payments from you for ever, but it would not answer. You have decided to write off the £680, but I suggest you warn your card issuer of this dispute, in case Tripadvisor collects more payments. And it would do no harm to have your solicitor write to Tripadvisor, making clear you are withdrawing any permission it imagines it has to take more money from you.
Daily Mail
39 minutes ago
- Daily Mail
Wunderkind trades blows with wounded WPP as ad giant's shares slump
A fierce row has broken out between media giant WPP and one of its former rising stars after he launched an extraordinary attack on the business, accusing it of 'making it up as it goes along'. Ajaz Ahmed, who set up ad agency AKQA as a student in 1994, told The Mail on Sunday that London-based WPP had lost its way and was 'more focused on winning awards' than winning the clients needed to compete on the world stage. It came as one of Britain's most senior media bosses said WPP had 'lost a lot of business' and was failing to convince prospective clients of its strengths. But insiders at WPP have hit back, saying Ahmed has 'an axe to grind'. WPP has been beset by falling profits and the rise of artificial intelligence that threatens to make ad agencies extinct. The firm lost its crown as the world's biggest advertising group to France's Publicis last year and its share price has fallen 44 per cent in the past 12 months. It issued a profit warning this month, citing 'continued macro uncertainty' as clients cut back on ad spending due to turmoil in the global economy. But Ahmed said the firm's problems ran deeper, saying WPP had 'failed to deliver meaningful growth' with 'little evidence of a compelling long-term vision'. He said: 'Its UK-centric structure feels parochial in a landscape where global growth is driven by US-based companies.' Ahmed also said WPP's attempt to get workers back into the office four days a week had 'demotivated staff and damaged trust'. But a well-placed source at the firm said Ahmed had 'left a mess' at AKQA and this was an attempt to 'settle a score', adding: 'Lots of board members had wanted to fire him but he was protected by some senior management.' Another insider wished Ajaz 'would move on', accusing him of making 'very generalist claims'. 'A lot of people who leave WPP have a habit of commenting on it,' the insider added, a reference to its former boss Sir Martin Sorrell, who left in 2018. AKQA shot to fame due to its focus on the growing influence of the then-new internet advertising market. Its clients have included video streaming giant Netflix, payment firm Visa and taxi app Uber. In 2012, WPP took control of AKQA in a deal valuing it at nearly £350 million. After more than a decade under WPP, Ahmed quit as head of AKQA in October last year and has re-emerged as the head of a new agency called He is not alone in his assessment of WPP. One of the UK's most senior media executives told The Mail on Sunday the ad giant had 'lost a lot of business' to Publicis. The source also said potential clients were confused by WPP's efforts to use AI to create cheaper and faster marketing campaigns, saying: 'It says it is investing millions. But what does that mean?' This month, WPP said Microsoft executive Cindy Rose would replace Mark Read as chief executive at the end of the year. A WPP spokesman said: 'Ahmed is now competing with his former employer. After two years of underperformance, AKQA is back winning business. 'WPP's AI strategy has been well received, by existing and prospective clients as demonstrated in significant extensions and wins in the past 12 months such as Amazon, Johnson & Johnson and Unilever.'
Daily Mail
39 minutes ago
- Daily Mail
Start saving for your pension at 18, says Legal & General boss
The boss of Britain's biggest money manager has called for the age at which workers are automatically included in company pensions schemes to be cut to 18 to help them save more for retirement. Antonio Simoes, chief executive of Legal & General, said lowering the threshold from 22 would also boost the economy now and lessen dependency on state benefits in the future. Hundreds of thousands of young people in their first jobs, apprenticeships or in temporary or holiday work would also develop the savings habit early. The boss of the £14.4 billion FTSE 100 giant said: 'The challenge of pensions adequacy – making sure all of us have enough to live on in later life – is urgent and pressing. 'Adequacy depends on three things: how much people are putting in, what returns they get and, crucially, when they start. 'The best financial gift we can give young people is time. A pension opened at 18 may not seem much now, but in 30 or 40 years it could mean everything. So let's stop wasting time. Let's start saving it. 'Currently, auto-enrolment schemes, which cover millions of workers at companies without their own pension funds, are only open to those aged 22 and over.' He pointed to countries such as Australia and Canada where the auto-enrolment age is already 18, showing that it was possible. The controversial call from Simoes, who heads a business that manages £1.2 trillion of pensions and other savings, comes ahead of tomorrow's launch of the long-delayed Government review of Britain's grossly inadequate level of retirement provision. The study, to be led by Pensions Minister Torsten Bell, will investigate the significant inequalities between retirees with generous company pensions and those who are reliant on the basic state pension, having accumulated little or no other savings. As well as trying to find solutions to retirement poverty, the review may also allow people to dip into their pension pots at any age if they are short of cash. Also on the agenda will be the thorny issue of raising auto-enrolment pension contributions. These currently stand at 8 per cent and are split between the employer, who pays in 3 per cent of a member of staff's earnings, and the employee, who pays in 5 per cent of their earnings. There is pressure to raise the total contribution to 12 per cent. But such a measure is likely to be delayed against the background of the furore over the increase in employers' National Insurance contributions in April, which Chancellor Rachel Reeves announced in her Autumn Budget. The Federation of Small Businesses has already voiced its opposition to a rise in auto-enrolment contributions. Simoes' plan to extend auto-enrolment to 18-year-olds is also likely to meet resistance, as this would impose even more of a burden on businesses. But the L&G boss said the benefits would be likely to outweigh the costs. 'It would be a win-win. Those at retirement would be in a stronger financial position, less reliant on the state,' he said. 'And when more people save, more capital is available for the UK economy, supporting jobs, infrastructure, and national resilience. 'Bigger pension pots could be channelled into productive investment, helping to fund growth and regeneration. And retirees would have more to spend. 'This matters, given that consumer spending drives 63 per cent of UK gross domestic product and retirees already account for a quarter of that total.' The L&G boss's intervention comes after Labour announced last week that the voting age is to be cut to 16 from 18 by the time of the next general election, fuelling an ongoing debate about at what age people should assume responsibility for decisions, including over their finances in later life. ...but Mayor's plan 'could leave majority worse off' A plan to grow workplace pension pots faster by taking more risk has been slammed as 'truly bizarre' by a leading consumer campaigner this weekend, in a move that could leave retirees 'worse off'. Tesco, BT, and NatWest are among more than 20 firms that have signed up to an 'employer pension pledge', which prioritises maximising returns for savers over charging them low fees. The move is led by City of London Mayor Alastair King, who says hiring more expensive fund managers to invest in riskier 'alternative' assets – such as private equity and infrastructure – will deliver better long-term returns for pension savers than only investing in the stock market. Boosting the size of pension pots matters because most of the population is not saving enough for even a modest retirement. But experts say King's plan is flawed because high fees devour investment returns over time. 'When it comes to investing, the only certainty is cost,' said James Daley, head of the Fairer Finance campaign group. 'The assertion is that pension funds which are keeping costs low are delivering worse returns, but I've not seen any evidence to support that.' Most 'active' pension fund managers, who pick their own investments rather than track the stock market, underperform in the long run, he added, saying: 'The new employers' pledge is truly bizarre. I am surprised so many serious firms have put their names to it. If this pledge results in more firms investing more of their employees' money in more expensive funds, the stats tell us the majority will be worse off.' Critics say the pledge also fails to tackle an even bigger problem – the lack of cash going into workplace pension schemes, especially from employers. Under auto-enrolment, 2.4 million firms pay a minimum of 3 per cent of a worker's salary into their occupational pensions, which are then invested on their behalf without any guarantee of a set income when they retire. More than 11 million private sector workers chip in at least 5 per cent of their salary to save for their golden years in this way. These minimums could rise in a long-delayed Government review of retirement savings, which is due to be announced by Pensions Minister Torsten Bell tomorrow. Fees are capped at 0.75 per cent a year of a fund's value for default funds, driving some schemes to opt for cheaper, 'passive' forms of stock market investing. 'The knock-on impact of this heavy focus on fees has been shrinking allocations to UK equities, starving UK companies of capital,' said Jason Hollands of wealth manager Evelyn Partners. The Government has no plans to lift the fees cap, but hopes to keep costs down by encouraging more pension funds to merge into larger schemes to invest in private companies, Hollands said. King, who founded his own fund management firm, also called for the cash Isa allowance to be cut from £20,000 a year to boost investment in UK firms. That idea is on hold after a backlash by building societies, which rely on savers' cash deposits to fund home loans and other lending.
