UK Supermarkets Warn of Trade Risks as Deforestation Law Delays Drag On

Nine of the UK’s biggest supermarket chains are calling on the government to stop dragging its feet and urgently deliver on a promise it first made back in 2021: to introduce laws tackling deforestation in supply chains. In a rare show of unity, Aldi, the Co-op, Lidl, Marks & Spencer, Morrisons, Ocado, Sainsbury’s, Tesco and Waitrose have all signed an open letter urging immediate action.

Their message is simple. If the UK doesn’t act quickly, it risks falling out of sync with the European Union, which is moving ahead with its regulations at full steam. Starting December 30, 2025, large businesses in the EU will be required to ensure that any beef, cocoa, coffee, palm oil, rubber, soy, or wood they sell is both legally produced and free from deforestation. No exceptions. The UK’s grocers are asking that any UK framework also accept the EU’s Due Diligence Statements as valid proof of compliance. That way, companies aren’t stuck jumping through two sets of hoops for the same outcome.

“In less than six months, British companies will need to have the information and support necessary to continue exporting regulated forest-risk products, or our European customers will source from other nations,” the new open letter states.

“The lack of clarity from the government of how Northern Ireland supply chains and operations will be affected is further complicating and delaying our ability to act.”

The open letter calls on the UK Government to implement regulations that are “aligned as much as possible” with the EUDR in terms of scope, requirements, and definitions to ease trade. Additionally, the letter argues that supplier transparency mandates for British supply chains should be updated before the EUDR.

But here’s the issue: the UK’s version of this law is still sitting in the slow lane. It was initially promised as part of the 2021 Environment Act under the previous Conservative government. The idea was to hold companies accountable, forcing them to either comply with deforestation safeguards or explain why they haven’t. That includes businesses importing high-risk commodities, such as soy, or selling products made from them. If found to be using illegally sourced materials, companies could face severe penalties.

So, what’s the holdup?

The process has been riddled with delays. Political instability, including two prime ministerial handovers in 2022, didn’t help. Then, toward the end of 2023, Rishi Sunak’s administration provided a few new details on how the law might be implemented. But since last year’s general election, Keir Starmer’s government has offered little to no updates, and time is running out.

The new open letter, coordinated with support from WWF, states: “We appreciate the Government’s concern around creating additional regulatory burdens for business. However, well-designed legislation developed in consultation with our businesses will not hinder growth and will maintain open exports to our largest trading partner.

“Moreover, voluntary actions, such as the UK Soy Manifesto, have demonstrated that a market shift, even amongst the most committed UK businesses, is impossible to achieve without a binding regulatory baseline in place. Deforestation is a clear example of a market failure that we are unable to address exclusively through voluntary commitments.”

Meanwhile, across the Channel, the EU is facing its internal pushback. Some large manufacturers—Mondelez, the company behind Cadbury, for instance—are now lobbying for an additional one-year delay on top of the one they've already been granted. Their argument? Soaring cocoa prices and dwindling supply, mainly due to climate change, are already wreaking havoc.

Adding to the drama, a handful of EU nations are asking for exemptions for goods produced within their borders. They argue that if their forests are already considered “low risk,” their industries shouldn’t be burdened with extra red tape. It’s an idea that’s raising eyebrows. Critics, including NGOs and international stakeholders such as Indonesia, view it as a double standard. If every country is expected to comply with EUDR, why should EU countries get a free pass?

As it stands, the EU has classified all its member states as being in the “low-risk” category regarding deforestation. That classification doesn’t exempt them from the rules but is meant to inform how businesses assess their supply chains and how governments approach enforcement.

In the end, the message from the UK’s supermarket giants is clear. Without swift alignment, the UK risks regulatory chaos, higher costs for businesses, and a failure to meet its environmental promises.