By Riad Beladi
Riad Beladi is a British Algerian media and marketing expert with over 30 years of experience in retail development, international media strategy, and market analysis. As a journalist and Managing Director, he has worked extensively between the USA and Europe, providing deep insights into the retail industry. Riad has interviewed top executives and political leaders, bringing a global perspective to his work, with his expertise frequently featured in ISN Magazine.
The European Commission’s recent ban on the Algerian chocolate-hazelnut spread “El Mordjene,” which was positioned as a competitor to market-dominating Nutella, has stirred debates in both Europe and Algeria. With Algerian importers now requiring licenses to bring European finished food products into their markets, many are left wondering: is this a case of protectionism, economic politics, or a legitimate trade regulation issue?
In this detailed report, ISN Magazine investigates the background and dynamics of this trade dispute, exploring the historical context of European-Algerian trade relations, the relevant European Economic Community (EEC) and Algerian laws, and the implications of this development for both markets.
Historical Context: European-Algerian Trade Relations
Trade relations between Algeria and the European Economic Community (EEC), and later the European Union (EU), have been shaped by several economic agreements over the past decades. Since Algeria’s independence from France in 1962, the country has navigated its trade policies between its historical ties to Europe and its ambition for economic independence.
In 2005, Algeria signed the EU-Algeria Association Agreement, a key framework to promote trade between the two regions by eliminating tariffs and encouraging foreign investment. Algeria benefits from tariff reductions and exemptions for certain products, and in return, Europe has sought access to Algeria’s vast energy resources, primarily natural gas. The agreement was intended to strengthen economic relations and facilitate the free flow of goods and services between the EU and Algeria.
However, the relationship has often been strained by issues of market access and competition, particularly when it comes to agricultural and finished goods. Algeria, seeking to diversify its economy away from its reliance on oil and gas exports, has adopted measures to protect its domestic industries, including the food sector.
El Mordjene vs. Nutella: A Threat to European Market Dominance?
Nutella, produced by the Italian company Ferrero, has long dominated the global market for chocolate-hazelnut spreads. In European supermarkets, Nutella has enjoyed a virtual monopoly, making it challenging for any competing brand to gain a foothold. El Mordjene, a lesser-known Algerian spread, was seen as a viable competitor due to its similar taste and lower price point.
In the past few years, El Mordjene gained popularity in Algeria and began making inroads into European markets, particularly targeting Algerian diaspora communities and health-conscious consumers looking for alternatives to Nutella. This rising competition likely posed a threat to Ferrero and other European producers, potentially sparking concerns about price competition and market share.
The Ban: European Commission’s Justification
In early 2024, the European Commission announced a ban on El Mordjene, citing health and safety concerns, particularly related to labeling standards and ingredient sourcing. According to EU food regulations, all products entering the market must comply with strict standards, including:
- Labeling and Nutritional Information: The EU requires that all food products provide accurate information regarding their nutritional content, ingredients, and allergens.
- Food Safety Standards: Products must adhere to hygiene regulations under the General Food Law Regulation (EC) No. 178/2002, ensuring food safety throughout the supply chain.
- Quality Control and Certifications: Food products imported into the EU must pass stringent certification checks, including compliance with specific European norms regarding additives, preservatives, and the traceability of ingredients.
The European Commission claimed that El Mordjene did not meet these requirements, particularly concerning labeling and certification of ingredients. However, critics argue that the ban is less about food safety and more about protecting Nutella’s dominance in the market.
Protectionism or Legitimate Safety Concerns?
Protectionism is often defined as the practice of shielding a country’s domestic industries from foreign competition by imposing tariffs, quotas, or regulations. Some critics view the European Commission’s ban on El Mordjene as an example of such protectionism, designed to protect Nutella and other European brands from growing competition from non-European products.
- Economic Protectionism: European producers have historically exerted pressure on policymakers to safeguard their interests. Given the immense profitability of Ferrero and the dominance of Nutella in the spread market, there could be economic motives behind the ban. By citing safety concerns, the European Commission could be protecting a major player in the European economy.
- Trade Politics: Algeria’s recent introduction of licensing requirements for the importation of finished European food products could be seen as part of a broader trade dispute. In an effort to support its domestic food industries, Algeria may have imposed these restrictions as a way to encourage local production and reduce reliance on European imports. The ban on El Mordjene could, in this light, be viewed as retaliation for Algeria’s trade barriers.
European Law: EEC Trade and Food Safety Regulations
To understand the legality of the European Commission’s actions, it is essential to examine the relevant European laws that govern trade and food safety standards:
- EEC Regulation 178/2002: This foundational law establishes the general principles and requirements of food law in Europe. It mandates that all food entering the EU must be safe for consumption and ensures that food cannot be placed on the market if it is unsafe.
- EU’s Competition Law: The EU has robust competition laws to prevent monopolies and encourage fair competition. However, these laws also allow for protective measures when it comes to food safety and public health, which the European Commission has cited in its decision to ban El Mordjene.
- Technical Barriers to Trade (TBT) Agreement: As part of its obligations under the World Trade Organization (WTO), the EU is committed to ensuring that technical regulations, standards, and certification processes do not create unnecessary obstacles to international trade. However, the line between legitimate safety regulations and protectionism can be thin.
Algerian Law: Certification and Import Restrictions
Algerian import laws have become increasingly stringent in recent years, particularly with the introduction of licensing requirements for finished European products. These changes are part of a broader effort to reduce Algeria’s reliance on imports and promote local industry. The laws require that:
- Imported Goods Certification: Food products imported into Algeria must pass quality checks and certifications to meet local safety and nutritional standards. These standards can vary significantly from European regulations, leading to potential trade friction.
- Licensing for Finished Goods: Algeria’s new rules require importers to apply for licenses to bring in finished food products from Europe, a measure aimed at curbing imports and supporting local producers. Critics argue that this policy amounts to protectionism and has triggered tensions with European trading partners.
Implications for the Market
The European Commission’s ban on El Mordjene, combined with Algeria’s import restrictions, has far-reaching implications for both European and Algerian producers:
- For Algerian Producers: El Mordjene’s exclusion from the European market represents a significant setback for Algerian exporters. The European market is a key target for Algerian products due to its size, wealth, and proximity. Losing access could force Algerian producers to seek alternative markets or adjust their products to meet European standards.
- For European Producers: Algerian import restrictions on European finished food products could hurt European companies that rely on Algeria as a key export market. This is particularly true for luxury and processed food brands that have built a strong presence in North Africa.
- For Consumers: European consumers could see less competition and higher prices in the chocolate-hazelnut spread market if the ban on El Mordjene remains in place. In Algeria, consumers may face higher prices or fewer options for European imported products, particularly in the premium food category.
Politics or Protectionism?
The ban on El Mordjene raises significant questions about the intersection of trade regulations, competition law, and international politics. While the European Commission’s justification centers on food safety, the broader context suggests that economic protectionism and political maneuvering may also be at play. Algeria’s own import restrictions have likely contributed to the tension, setting the stage for a complex and potentially protracted trade dispute between the two regions.
As the situation unfolds, ISN Magazine will continue to investigate the underlying motives and broader impacts of these actions on the global food trade industry.
