Tallow & tallow derivatives

Historical Background

1. 10th January 1997
2. 30th July 1997
3. Problems & APAG Recommendations

Some Economic Data

1. Imports from Third Countries
2. Breakdown with regard to applications
3. Turnover of Business

* * * HISTORICAL BACKGROUND

10th January 1997
Commission adopts directive 97/1 – adaptation to technical progress of directive 76/768 on approximation of the laws of member states relating to cosmetic products

• Directive 97/1 prohibits as ingredients to cosmetics the use of bovine, ovine, caprine tissues and fluids from the encephalon, the spinal cord and the eyes and ingredients derived therefrom as from 1st July 1997.

• EFFECT: tallow supplied to the Oleochemicals Industry (APAG) for the purpose of making tallow derivatives which will be used for the manufacture of cosmetics, HAS to be SRM free tallow. Such quality of tallow is only available in very small quantities; this is the edible grade tallow.

• ACTIONS TAKEN: APAG undertakes several actions with the Commission and submits a risk assessment. AISE (Soap and Detergents Association) & COLIPA (Cosmetics Association) do the same. These risk assessments lead to the adoption of an opinion by the Scientific Committee on Cosmetology that recognises the safety of tallow derivatives providing they have been processed according to strict processing conditions which all APAG members comply with. This should lead to the adoption of a derogation for tallow derivatives i.e. modification of 97/1. [ Back to the top ]

30th July 1997
Commission adopts a decision prohibiting the use of material presenting risks as regards transmissible spongiform encephalopathies – the so-called SRMs.

• The decision prohibits the use of SRMs for ANY PURPOSE as from 1st January 1998.

• EFFECT: tallow supplies to the Oleochemicals Industry for any purpose i.e. cosmetics, pharmaceuticals, food, animal feed have to be SRM free whether tallow originates from Europe or from third countries. Third countries might get a BSE free status whereby they could supply Europe with SRM-based tallow.

• PROBLEMS & APAG RECOMMENDATIONS

1. Although industrial applications (tyre coating, plastics, de-inking, paints, etc) are not formally included in the scope of the decision, the current wording of the decision is somewhat ambiguous.

APAG URGENTLY REQUIRES CLARIFICATION FROM THE COMMISSION THAT DECISION 534 DOES NOT APPLY TO INDUSTRIAL APPLICATIONS (E.G. TYRE COATING, PLASTICS, PAINTS, DETERGENTS, etc).

2. Decision applies on 1st January 1998 to tallow produced in Europe or imported from third countries. APAG has been told by the Commission that it was not the intention for this decision to apply to products and materials already in the pipeline on 1st January 1998. Commission legal services do not support this interpretation of the decision as it is currently worded.

APAG URGES THE COMMISSION TO MODIFY THE DECISION TO CLARIFY THE FACT THAT THE DECISION IS NOT RETROACTIVE AND DOES NOT APPLY TO PRODUCTS AND MATERIALS IN THE PIPELINE (tallow, tallow derivatives, consumer products). IF NOT, THIS WOULD LEAD TO WITHDRAWAL FROM THE MARKET OF THOUSANDS OF PRODUCTS RANGING FROM COSMETICS TO VITAL PHARMACEUTICALS, MEDICINES.

3. Extra EU countries are not in a position to supply Europe with SRM free tallow. Europe being a net importer of tallow, these imports are essential to meet the needs of essential European industries. APAG has been told that it is very unlikely that some major exporting countries (USA & CANADA) will get BSE FREE status. This will lead to a major shortfall of supplies of tallow for the production of tallow derivatives. However, tallow derivatives have been recognised by the Scientific Committee on Cosmetology as safe, if they are produced using strict processing conditions as defined in their opinion of 24th June 1997. This had already been recognised by EMEA (The European Agency for the Evaluation of Medicinal Products) in their opinion of 16th April 1996 and reconfirmed on 15th April 1997. These opinions were endorsed by the Scientific Steering Committee at their meeting of 8th September 1997.

APAG URGES THE COMMISSION TO GRANT DEROGATION TO IMPORTS OF TALLOW FROM THIRD COUNTRIES FOR THE PRODUCTION OF TALLOW DERIVATIVES ACCORDING TO THE PROCESSING CONDITIONS DESCRIBED IN THE OPINION OF THE SCIENTIFIC COMMITTEE ON COSMETOLOGY OF 24TH JUNE 1997 AND ENDORSED BY THE STEERING SCIENTIFIC COMMITTEE AT THEIR MEETING OF 8TH SEPTEMBER 1997.

This issue has to be solved WITHOUT FURTHER DELAY since Industry is uncertain as to what they can purchase from third countries to avoid major disruption of supplies as from 1st January 1998. If not, a large proportion of Industry might have to close down on 1st January 1998.

Alternatives to tallow based materials do not address this problem because:

• They are not available in sufficient quantities.
• They do not have the same technical properties in all applications.
• They cannot be considered in pharmaceutical applications which impose a very lengthy registration procedure for any required ingredient modification. [ Back to the top ]

* * * SOME ECONOMIC DATA

1. IMPORTS FROM THIRD COUNTRIES

Europe use a total of ca 1,443,000 MT (metric tonnes) tallow in various applications detailed below out of which an average of 430,000 MT (average between 1992 and June 1997 quoted from Oil World) are imported from third countries.

The average breakdown between the various countries reads as follows:

One should know that for some of the a/m countries, exports into Europe constitute a large proportion of their business. We have detailed below the four countries which have been often mentioned during the past four months i.e.

USA:
342,000 MT represent 8 to 10% of the total quantities of tallow produced in the USA Canada:
72,000 MT represent ca 40% of the total quantity of tallow produced in Canada! Australia:
4,000 MT represent 1% of total quantity of tallow produced in Australia
New Zealand:
2,000 MT represent 1% of total quantity of tallow produced in New Zealand. [ Back to the top ]

2. BREAKDOWN WITH REGARD TO APPLICATIONS

For memory – 1,443,000 MT of tallow are used in Europe (average over the last 5 years).

• 150,000 tonnes – ca 10% - used directly in food – this is edible grade tallow
• 431,000 tonnes – ca 30% - used in animal feed
• 431,000 tonnes – ca 30% - used in soaps and cosmetics
• 431,000 tonnes – ca 30% - used in tallow derivatives out of which
• 150,000 tonnes or 10% go into food, feed, cosmetics and pharmaceuticals applications
• 280,000 tonnes or 20% go into NON food, feed, cosmetics and pharmaceuticals outlets.

3. TURNOVER OF BUSINESS

Tallow has normally commanded EURO 403,- (US$ 475) per tonne but has now risen to about EURO 635,- (US$ 750) per tonne. The total value of the tallow used in Europe therefore amounts to EURO 93,500,000 (US$ 110,000,000). The value of the products in which tallow is used will run into billions of EURO especially when one considers the low (but essential) level usage in such high value products as pharmaceuticals and cosmetics.

The above only addresses the value associated the imports of tallow and in no way addresses the current imports of finished products from third countries containing tallow and tallow derivatives. These must also run into billions of EURO but it is impossible for APAG to make worthwhile estimates. This should be done from other parts of Industry such as the food, cosmetics and pharmaceutical industries. [ Back to the top ]