EUDR for FMCG

What is EUDR?

The EU Deforestation Regulation (EUDR), officially known as Regulation (EU) 2023/1115, is a landmark piece of European Union legislation designed to ensure that certain commodities and products sold in the EU have not contributed to deforestation or forest degradation anywhere in the world. It entered into force on 29 June 2023 and applies to companies placing specific commodities on the EU market or exporting them from it. By establishing mandatory due diligence obligations, the regulation holds businesses directly accountable for the environmental footprint of their global supply chains.

EUDR and the FMCG Industry

The Fast-Moving Consumer Goods sector sits at the very centre of EUDR's scope. Many of the seven commodities regulated under EUDR — cattle, cocoa, coffee, palm oil, soya, wood, and rubber — are foundational ingredients and raw materials in everyday consumer products. A single FMCG company may source all of them simultaneously, making compliance a complex, multi-layered challenge rather than a straightforward checkbox exercise.

Consider palm oil: it appears in roughly half of all packaged supermarket products, from biscuits and margarine to shampoo and lipstick. Under EUDR, any FMCG manufacturer using palm oil must now prove that the specific oil in their product did not originate from land deforested after 31 December 2020. Similarly, a chocolate confectionery brand must trace its cocoa beans to the exact plot of land where they were grown and verify that plot's deforestation-free status using geolocation data. Coffee brands face equivalent requirements for their roasted and instant coffee lines. Rubber, used extensively in gloves, footwear, and packaging materials, is also in scope — an often overlooked exposure for FMCG companies with broad product portfolios.

The regulation targets large operators and traders first, with an extended compliance deadline for small and medium-sized enterprises. However, in a sector dominated by major multinationals and their vast supplier networks, the ripple effect reaches far down the value chain. Retailers acting as importers, branded goods manufacturers, and private-label suppliers are all directly affected. Non-compliance carries severe consequences, including fines of at least four percent of a company's total annual EU-wide turnover, confiscation of products, and temporary exclusion from public procurement procedures.

Key Requirements

• Due diligence statements: Before placing a regulated product on the EU market or exporting it, operators must submit a due diligence statement to the EU's Information System. This statement confirms that the product is deforestation-free, complies with local laws in the country of production, and that the operator has carried out a full risk assessment.
• Geolocation data collection: Operators must collect the geographic coordinates — latitude and longitude — of all land parcels where the relevant commodities were produced. For large agricultural holdings, a polygon defining the entire plot is required. This data must be kept and made available to competent authorities on request.
• Supply chain traceability to plot level: Unlike earlier voluntary sustainability schemes, EUDR demands traceability down to the specific field or farm, not merely the country or region of origin. FMCG companies must be able to link a finished product on a supermarket shelf back to the individual agricultural parcel where its raw material was grown.
• Risk assessment and risk mitigation: Companies must assess the risk that their products contain commodities from deforested or forest-degraded land. Where a non-negligible risk is identified, concrete mitigation measures — such as independent audits, supplier capacity-building programmes, or satellite monitoring — must be implemented before the product enters the market.
• Legality compliance verification: Beyond deforestation, operators must verify that production complied with all applicable laws in the country of origin, including land tenure rights, labour laws, and human rights obligations. This expands due diligence beyond a purely environmental remit.
• Record keeping: All due diligence records, including supplier information, geolocation data, risk assessments, and mitigation measures, must be retained for a minimum of five years and made available to national competent authorities upon request.
• Proportional obligations for traders: Traders who are not large operators have simplified obligations but are still required to collect the reference numbers of the due diligence statements from their suppliers and to maintain those records for five years.

Implementation Steps for FMCG Companies

1. Map your commodity exposure across the full product portfolio. Begin with a complete audit of all ingredients, raw materials, and packaging components to identify which fall within the seven regulated commodities. Many FMCG companies underestimate their rubber or soya exposure; a thorough Bill of Materials review often reveals unexpected dependencies.
2. Classify your role under the regulation. Determine whether your business acts as an operator — placing products on the EU market for the first time — or as a trader further down the distribution chain. This distinction determines the scope of your due diligence obligations and the specific deadlines that apply to your organisation.
3. Engage suppliers with structured questionnaires and contractual clauses. Issue formal requests to all relevant suppliers requiring them to provide geolocation data, farm-level certificates, and evidence of local law compliance. Update supplier contracts to make EUDR compliance a binding obligation, with the right to audit and to terminate relationships in the event of non-compliance.
4. Invest in a traceability technology platform. Manual data collection is not viable at FMCG scale. Evaluate supply chain traceability solutions that can ingest geolocation polygons, cross-reference them against deforestation databases such as Global Forest Watch or the European Space Agency's forest monitoring layers, and generate audit-ready compliance reports automatically.
5. Conduct plot-level risk assessments using satellite and remote sensing data. Use available satellite imagery to verify the land-use history of all identified parcels back to 31 December 2020. Where satellite data is inconclusive, commission ground-truthing through local partners or certified auditors.
6. Register on the EU Information System and prepare due diligence statement workflows. Once the EU's centralised information portal is fully operational, FMCG operators will need internal processes for drafting, reviewing, and submitting due diligence statements before each product shipment or market placement. Build these workflows into your existing compliance and procurement systems.
7. Train procurement, legal, and sustainability teams. Ensure that every team member involved in sourcing decisions understands what EUDR requires and what red flags to look for in supplier documentation. Cross-functional alignment between procurement, legal, sustainability, and logistics is essential for consistent implementation.
8. Establish a continuous monitoring programme. Compliance is not a one-time exercise. Deforestation risk in supply sheds can change seasonally. Set up recurring satellite monitoring alerts and build annual supplier re-verification into your procurement calendar.

Frequently Asked Questions

Which FMCG products are most directly affected by EUDR?

Products containing palm oil, cocoa, coffee, soya, or rubber are the most widely affected across the FMCG sector. This includes chocolate and confectionery, biscuits and crackers, margarine and cooking oils, instant coffee and coffee capsules, plant-based protein foods, personal care products such as soaps and cosmetics, and a wide range of cleaning and household goods. Companies should also review their packaging materials for paper and wood derivatives, which fall under the wood commodity category.

Does EUDR apply to products manufactured outside the EU if they are sold in the EU?

Yes. The regulation applies to any operator or trader who places regulated products on the EU market, regardless of where those products were manufactured. A Thai manufacturer exporting palm oil-based goods to EU retailers, or a Brazilian coffee brand selling through an EU e-commerce channel, must comply with the same due diligence requirements as an EU-based company. This extraterritorial reach is a defining characteristic of the regulation and significantly broadens the universe of FMCG businesses that must take action.

What is the cut-off date for deforestation, and why does it matter?

The regulation's reference date is 31 December 2020. Any land that was deforested or experienced forest degradation after this date cannot be used to produce commodities that are then sold in the EU. It does not matter when the actual product was manufactured or exported — what counts is whether the specific parcel of land was forested as of 31 December 2020. FMCG companies must therefore obtain land-use history data for every identified supply parcel going back to this benchmark date and verify deforestation-free status using satellite imagery, national cadasters, or other verifiable sources.

How does EUDR interact with existing sustainability certifications such as RSPO or Rainforest Alliance?

Existing third-party certifications such as the Roundtable on Sustainable Palm Oil (RSPO), Rainforest Alliance, or UTZ do not automatically satisfy EUDR requirements. The regulation requires plot-level geolocation data and a deforestation risk assessment based on that specific data — something that certification schemes do not always provide to the operator level of detail required. Certifications may serve as supporting evidence within a broader due diligence framework and can lower risk ratings, but they cannot replace the formal due diligence statement or the geolocation data submission obligations. Companies should treat existing certifications as a starting point, not an endpoint.

Summary

EUDR represents the most significant supply chain compliance challenge the FMCG industry has faced in a generation, touching everything from the cocoa in a chocolate bar to the palm oil in a hand cream, and demanding plot-level traceability that goes far beyond anything previously required by voluntary sustainability standards. Companies that begin their compliance journey now — mapping commodity exposure, engaging suppliers, and investing in traceability infrastructure — will be far better positioned than those that wait until enforcement deadlines are imminent. Acting early also protects brand reputation, strengthens retailer relationships, and builds the supply chain resilience that FMCG businesses will need to navigate an increasingly regulation-intensive global trading environment.