According to the Citrus Management Committee (CGC), the national employers' organization representing private exporters, the European Commission (EC) has overlooked this sector in its negotiations to ratify the treaty with Mercosur (Argentina, Brazil, Uruguay, and Paraguay). Fresh juice has never been classified as a sensitive product, despite evidence that Brazil is the leading juice processing power, accounting for nearly 70% of the global market share, and that Spain is the largest exporter of fresh juice. The initial proposal from 2019 remains unchanged, establishing 7 years to gradually eliminate tariffs on direct juice (the most important for the Spanish industry, which currently faces a 12.2% tariff), and 10 years for concentrate (currently at 15%). The 12.8% tariffs on fresh imports will be eliminated within 10 years of the agreement's entry into force.
"Mercosur will directly impact the Spanish juice industry, which relies on these tariffs to protect its products. It will also affect the fresh sector because the 650,000 to 850,000 tons withdrawn each year due to supply and demand imbalances, mainly caused by bad weather and consisting of non-commercial sizes or fruit with skin defects, will lack clear destinations, causing fresh prices to decline," stated Inmaculada Sanfeliu, president of the CGC.
© CGC
The EU, which accounts for 52% of its juice exports, is the main destination for the powerful Brazilian industry, controlled by a well-known oligarchy: The multinationals Citrosuco, Cutrale, and Louis Dreyfus. The United Kingdom is, after the U.S., its third-largest market, and the British government recently renewed the full suspension of tariffs decided after Brexit on 93 Brazilian products, including juices. Europe as a whole would be strengthened, thanks to Mercosur, as its primary and most secure market. The EU is also the top market for Spanish processing companies' sales by far, with Great Britain as their second most important alternative. "Our natural and closest market would be the scene of unequal competition between two antagonistic citriculture sectors: the Brazilian one, focused on juices, and the Spanish and European one, dedicated to fresh produce, with costs and phytosanitary, environmental, food safety, labor, and social requirements that have nothing to do with each other. Spain can no longer compete on price with Brazil's juice, even less without tariffs," Sanfeliu states.
The CGC also regrets the lack of transparency with which the EC has managed the entire process and the urgency of this final phase. To prevent some member states led by France from blocking progress, and as the GCC predicted in 2023, the EC has decided to implement the provisional application of its trade chapter separately from the political and cooperation components, aiming to ratify the treaty without the approval of all member states. "We don't know how the now-promised safeguards will be activated and if the distortions that Mercosur will cause in the juice market and/or in the fresh market will be taken into consideration," Sanfeliu stated. "It seems that there's no awareness of the strategic importance that the European processing industry has for the marketing of our citrus," she added.
For Spanish and European citrus growers, the Brazilian model is too costly. Its large farms, mostly owned by a few, use a production system that is less demanding than that of fresh fruit and depends more heavily on pesticides. Brazil's sector employs these pesticides, many of which are banned here, more extensively due to the damaging effects of the Greening disease (HLB). The three major Brazilian companies mentioned earlier control the land, either directly or indirectly, and operate fleets with large ships to transport their juices to Europe. Shipping their products to ports like Rotterdam (Netherlands) or Ghent (Belgium) costs them nearly as much as it does for Spanish processors to move their juice by land from Andalusia, Murcia, or Valencia to France. In fact, the occasional "incursions" of some of these ships unloading in ports like Huelva have already shown a direct impact on the activities of Spanish processing plants.
Enhancing the competitive position of the already dominant Brazilian juice supply (both "100% squeezed" and concentrated) in Europe by removing tariffs would inevitably hurt the Spanish industry, which would face real challenges in maintaining minimum margins. The current international market, characterized by high juice prices, is a result of conditions originating in Brazil and Florida, directly linked to the sharp decline in harvests caused by the spread of HLB, a disease with no known cure. While Brazil had managed to mitigate these effects until recently, the U.S. has not.
The CGC also emphasized that if citrus growers cannot redirect fruit with defects or insufficient size to the industry, the fruit discarded would pose a serious environmental problem. If Europe's processing sector declines, 15 to 20% of the harvest, amounting to hundreds of thousands of tons, would have no designated outlet and would be considered waste. Such waste leads to the formation of leachates that pollute soil and water, promoting the growth of fungi and pests in agricultural fields. "The industry is not only crucial because of the value of the juice itself, it is essential because it guarantees an outlet for the entire production, reduces losses, regulates and stabilizes the fresh market, ensures higher quality, mitigates environmental issues, and fosters a circular economy in which everything is used to make byproducts, such as essential oils, livestock feed, or bioactive compounds," Sanfeliu stressed.
The anticipated increase in tariff-free imports of oranges, mandarins, and lemons from Argentina and Brazil also introduces another risk because both countries have high rates of black spot and Elsinoë fungi, citrus variegated chlorosis (CVC), citrus canker, and citrus greening (HLB); some of the most feared diseases in the EU. "Plant health controls on imports at the border are already insufficient. The risk of new and serious diseases entering Europe will skyrocket as traffic increases thanks to Mercosur," Sanfeliu stressed.
For more information:
CGC
www.citricos.org