EU Policy Shifts to Drive Plant-Based Procurement and Fiscal Alignment by 2027
The EU is accelerating policy changes, including public procurement and fiscal incentives, to promote healthier and more sustainable food systems. These shifts will create new market dynamics and compliance requirements for supplement manufacturers operating in the EU.
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A coalition of over 90 organisations, including ProVeg International, is pressing the European Union for stronger action to cultivate a healthier, more sustainable, and equitable food system. Their joint EU Policy Action Brief, grounded in the EAT-Lancet Commission framework, identifies six critical areas for policy reform, ranging from sustainable production and consumption to public procurement and research. The primary call is for a comprehensive EU Action Plan with integrated objectives, voluntary progress targets, and a budget allocated across production, consumption, processing, and food loss reduction.
Key policy proposals directly impact supplement and functional food manufacturers. Public procurement is identified as a significant area of consensus and immediate action. The European Commission's September 2026 proposal for a new Public Procurement Act is expected to incorporate criteria based on Planetary Health Diet principles. This will mandate a shift towards plant-rich meals in institutional catering, a multi-billion-euro market, offering stable, long-term contracts for compliant manufacturers and foodservice operators.
Fiscal measures are also central to the reform agenda. The brief advocates for EU guidance to harmonise VAT, proposing lower or zero VAT on healthy products like fruits, vegetables, legumes, and nuts, alongside equal VAT treatment for plant-based alternatives versus animal-based counterparts. For businesses, this alignment aims to foster predictable long-term demand, establish a level playing field across the Single Market, and eliminate price distortions hindering scaling and reformulation efforts.
Processing capacity gaps in the midstream infrastructure are highlighted as a barrier to scaling regionally sourced plant protein ingredients. Addressing this through financing critical infrastructure is deemed crucial for regional SMEs, enabling local processing of protein crops over imported ingredients. Furthermore, the post-2027 CAP negotiations present an opportunity to reorient agricultural support towards ecosystem stewardship and diverse, nutrient-dense crop rotations, potentially securing multi-year raw material supply contracts for food businesses.
What this means for Europe
European supplement manufacturers must strategically align product development with emerging plant-rich procurement criteria by late 2026, targeting the multi-billion-euro institutional catering market. Reformulation pipelines need to prioritise plant-based alternatives to capitalise on potential VAT reductions, ensuring competitive pricing and margin preservation against animal-based products. Investment in midstream processing infrastructure for regionally sourced plant proteins will be critical for securing resilient supply chains and reducing reliance on imports. Compliance teams should anticipate and prepare for harmonised EU nutritional and environmental labelling requirements, despite ongoing debates, to avoid fragmentation and ensure seamless market access post-2027.
The brief also addresses labelling, advertising, and consumer information, calling for harmonised nutritional and environmental food labelling across the EU. While specific methodologies and mandatory vs. voluntary approaches remain subjects of debate, the underlying principle is that EU-level harmonisation reduces the administrative burden and cost for manufacturers compared to managing a patchwork of national regulations. Restrictions on advertising for products high in fat, sugar, and salt (HFSS) targeting vulnerable groups are also sought, necessitating a review of marketing strategies.
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