💥 Fed cuts sparks mid cap boom! ProPicks AI scores with 4 stocks +23% each. Get October’s update first.Pick Stocks with AI

Swiss government says coffee 'not essential', stockpiling to end

Published 10/04/2019, 16:35
Updated 10/04/2019, 16:40
© Reuters. FILE PHOTO: An employee checks freshly roasted coffee beans at H. Schwarzenbach coffee roastery in Zurich

By John Miller

ZURICH (Reuters) - Switzerland on Wednesday announced plans to abolish the nation's emergency stockpile of coffee, in place for decades, after declaring the beans not vital for human survival, though opposition to the proposal is brewing.

Nestle, the maker of instant coffee Nescafe, and other importers, roasters and retailers are required by Swiss law to store bags of raw coffee. The country stockpiles other staples, too, such as sugar, rice, edible oils and animal feed.

This system of emergency reserves was established between World War I and World War II as Switzerland prepared for any potential shortages in case of war, natural disaster or epidemics.

According to the plan released for public comment, coffee stockpiling obligations would expire by the end of 2022, with companies free to draw down what they store in their warehouses.

"The Federal Office for National Economic Supply has concluded coffee...is not essential for life," the government said. "Coffee has almost no calories and subsequently does not contribute, from the physiological perspective, to safeguarding nutrition."

A final decision on scrapping coffee stockpiles is expected in November.

Switzerland's mandatory coffee reserves are now spread over 15 companies, including Nestle, and amount to about 15,300 tonnes, enough to cover three months of the Alpine state's domestic coffee consumption.

Switzerland's 8.5 million residents consume around nine kg (20 lb) of coffee per person annually, eclipsing Britain's 3.3 kg average and double the 4.5 kg consumed in the United States, according to International Coffee Organization figures.

Not everyone wants to see the Swiss strategic coffee reserve disappear, however.

Reservesuisse, the Bern-based organisation that oversees Switzerland's food stockpiles, in March asked the Federal Office to reconsider its recommendation.

Of the 15 companies that hold mandatory coffee stockpiles, Reservesuisse said, 12 wanted to continue, in part, because the existing system helps buttress the supply chain. Some also contend too little attention was paid to the drink's health benefits, like antioxidants or vitamins.

"Stockpile operators' concerns clearly show that the one-sided review and weighting of calories as the main criteria for a vital staple did not do justice to coffee," Reservesuisse wrote in a March 8 letter seen by Reuters.

A Nestle spokeswoman declined to comment on its position.

Switzerland finances its mandatory coffee stockpile via a fee of 3.75 Swiss francs on every 100 kg of imported beans, raising 2.7 million Swiss francs ($2.70 million) annually to compensate companies for storing beans.

© Reuters. FILE PHOTO: An employee checks freshly roasted coffee beans at H. Schwarzenbach coffee roastery in Zurich

In the event the mandatory stockpile is eliminated, the government said it expects importers that are freed from the fee to pass on any savings to coffee consumers.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.