On August 3rd, 2003 a new European Union (EU) “norm” went into effect—2000/36/EG. This new norm will allow all chocolate manufacturers in the EU to substitute up to five percent of the cocoa butter they would normally use in the chocolate with what are called “replacement” or “substitute” fats. This means that the rest of the EU “catches up” with Switzerland, which has had a similar rule in effect since 1995.

Not surprisingly, the ruling has been enormously controversial, and it is now up to individual companies (and/or countries) to decide if they will take advantage of the new, looser, regulations.

According to Swissinfo, a news and information program of the Swiss Government, Lindt & Sprungli claims that none of its products contain vegetable fats. (While this may be true of their solid chocolate products, it does not apply to the fillings of the widely distributed Lindt Lindor truffles, which contain hydrogenated palm kernel and other oils.)

Barry Callebaut (Belgium), one of the world’s largest chocolate manufacturers uses vegetable fats in their industrial products (e.g., compound coatings) as well as for customers who request it. Nestle (Switzerland) welcomes the new EU regulations, but says that formulas will not change as long as customers’ taste needs are met. Note that this is not an admission that they do not use vegetable fats in their products, remembering that the five percent limit has been in effect there since 1995.

The dispute over the change in this regulation has been dubbed “the chocolate war” among member EU states, and has made headlines in France and Belgium which traditionally have been the only two countries to adhere to the all cocoa butter, or “Real Chocolate” principle as championed by Chantal Coady of Rococo Chocolate in the UK.

The EU-approved replacement fats—which include palm oil, shea butter oil, mango kernel oil, and coconut oil—cost about one-tenth the price of cocoa butter. Many countries have welcomed the new regulations because they can dramatically reduce the cost of manufacturing chocolate. However, this cost reduction has a dark side: the International Cocoa Organization (ICCO) estimates that there will be a 20% drop in revenue from cocoa exporting countries such as Ghana, Ivory Coast, Nigeria, and elsewhere as demand for cocoa butter drops.

However, there may be a silver lining for some in this regulation, which may signal big changes for the more than 2000 members of the Zantiebougou Union of Women’s Associations, which is named after a village about 125 miles south of Mali’s capital, Bamako. Since 1999, the Union (a co-operative) has been producing about 15 tons of shea butter annually and they report that since the EU adopted the five percent rule earlier this year, they have already received orders from confectionery makers in Spain and the US. Hyacinthe Fane, a Union manager, says that the Union, which has been lauded as a model of local co-operative development, will finally be self-financing.

European experts are divided on the subject of the (economic, if not taste or quality) impact of the ruling, and some sources imply that because cocoa products account for only about 15% of the total manufacturing costs of chocolate, the reduction in manufacturing costs from replacing five percent of the cocoa butter will have little if any impact on consumer prices. Still others point to the fact that the prices of the replacement fats are likely to be even more volatile than the price of cocoa butter which makes depending on them for reducing costs harder to justify.