Bernard Valluis

Bernard Valluis in July was elected to a two-year term as the new president of the European Flour Millers’ Association (EFM), replacing Guy Sharkey, who led the association the last three years.

Valluis has been a deputy president of the French Flour Milling Association (Association Nationale de la Meunerie Française) since 2009, and was previously executive director at Soufflet Group with different positions in the Trading Division.

He started his career in economic research before leading the French Corn Growers Association. He has chaired many national and European grain trading and processing associations as well as the Grain and Feed Trade Association (GAFTA).

In a recent interview with World Grain, he stressed continuity.

“I’ve been a member of the team as vice president of the European Flour Millers during the presidency of Guy Sharkey and we have been working very closely,” he said. “I will continue what European Flour Millers does for the members.”

He discussed the priorities for the sector. Improving its competitiveness is one, while promoting food safety throughout the flour supply chain is also important.

“Other issues include the need for good financial market mechanisms for our agricultural raw materials,” he said. “We always try to make sure we have a good supply for our industry in quality and quantity. As well, we are concerned with several trade negotiations currently taking place with countries like Canada and the U.S., and in the Transatlantic Trade Investment Partnership (TTIP). Of course, we have some concerns about the treatment of flour and high-quality wheat in those negotiations.”

Valluis has been directly involved with the association’s lobbying at the European level on the Markets in Financial Instruments Directive, something with the potential to have an adverse effect on the industry if handled incorrectly.

“Extreme price volatility is an important issue,” he said. “After the crisis of 2007-08, financial reforms started as decided at the G20 and financial reform had an impact on the futures markets and options. We have been involved directly and have been working on the different Directives and Regulations, and we have to make sure that at the end of the implementation of the Regulation, in 2018, the flour milling sector is not really too impacted. One of the consequences is the different users of the futures market have to prove that they are not involved with financial activities. Another question is about the position limits, and it’s not really a concern because the size of our companies is not such that we are impacted by the position limits, defined by the Directives of MIFID.

A Soufflet employee inside one of the company's flour mills. New EFM President Bernard Valluis was previously executive director at Soufflet in the Trading Division.
Photo courtesy of the Soufflet Group.
“Another point is about the risk management under the control, so we have to declare from 2012 all the over-the- counter (OTC) derivatives. The companies have to be registered. This is one of the changes and I will continue to make sure we are not getting an administrative burden from this.”

Another issue he is focusing on, under the heading of competitiveness, is country-of-origin labeling.

“We would like to make sure we avoid difficulties with the idea of the Commission just to have mandatory labeling,” he said. “We are opposed to that, on the country of origin, and, if mandatory, we promote an ‘E.U.’ or ‘non-E.U.’ label.”

With TTIP, he believes that the E.U. industry is constrained relative to that in the U.S. and would like to see its products treated as sensitive in the negotiations.

“We would like, at the same time, for the Commission to remember that we currently have a high level of protection,” he said.

He referred back to the Uruguay Round settlement on decoupling subsidies from production and expressed concern that, in the TTIP negotiations, the U.S. should not be in a position to subsidize farmers while the E.U. industry is without protection.

“What we are doing at the same time is to be involved with the promotion of bread consumption on the internal market with the different partners of the E.U. bread supply chain,” he said.

The E.U. bread-related associations are facilitating transnational coalitions to submit quality bread promotion dossiers and get E.U. co-financing.

“The Commission decided that until 2016 it was impossible for cereal products to be subsidized by the Commission for promotion activity on the internal market because, at that time, as cereals were subject to subsidies for exports, they considered that they were out of the list of the products to be promoted,” he said.

Now, without any subsidies for export and transportation, for the internal market as well as outside the European Union, they are considering subsidies for promotional action at the level of 70% or 80%, according to different kind of conditions. He quoted an external study that had shown that consumption of bread in many E.U. countries is lower than the level recommended by National Health Authorities.

“One difficulty is that each association has to put one budget on the table so it’s what we’re working on, because if you want the benefit of the subsidies, you have to finance from your own account part of the action, not only the idea,” he said.

The association works closely with the Commission’s Directorate General for Health and Food Safety, known as DG Santé.

“We had discussions on ergot and we are talking about different unintentional allergen labeling as well,” he said. “We have a good team of experts within the technical committee in EFM working on it.”

Genetically modified crops are also an issue.

“We would like to make sure the Commission adopts a solution for the low level of presence in foodstuffs and we are defending that because it is very urgent,” he said, pointing out that there have been reports of low-level presence of GMOs in wheat in the U.S. Cases so far have involved white wheat.

“Japan and South Korea had been very concerned about it and stopped their imports,” he said. “Fortunately, in the E.U. we are not importing white wheat, but it’s urgent just to get regulation on low-level presence for authorized GM materials. We have in mind that one day, perhaps in the medium term, GMOs are coming to the world market. But, clearly, the E.U. flour milling sector will never use GM wheat that has not been approved by the E.U. safety authorities and we are to be convinced of its public acceptability and its practical advantages for the consumer.”

He raised a further concern about trade.

“We would like to continue to have exports of European wheat flour,” he said. “Following the current discussions on Turkey’s subsidies on exports at the WTO level, we see that the U.S. is also concerned about the TMO’s action of subsidizing the exports of Turkish wheat flour. It is one of our concerns as well.”

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Brexit’s impact

Asked to consider the potential effect of the U.K. vote to leave the E.U., Valluis noted that the process of leaving takes two years from when it is first invoked, under Article 50 of the Lisbon Treaty. The British government has already said it will not be invoked until 2017 at the earliest.

The European Flour Millers operates as an association of associations.

“I hope personally, with all the members of the European Flour Millers, that we can go on with a close relationship with our U.K. colleagues and with NABIM (National Association of British and Irish Flour Millers),” he said. “The U.K. has been very active in all the regulation, and I’m not thinking that from one day to another they are going to withdraw or cancel their involvement,” he said. “What I am thinking is that everyone is probably going to just adapt their internal rules to keep that very close relationship.”

The common issues, such as price volatility, will still be there, Valluis said.

“Financial reform at the E.U. level remains as it is,” he said. “I think that the implementation according to the financial market of commodities — in London as well as in Paris — is going to be slow.

“One element that will be very interesting is the launch of the new contract from CME in September, and I think that we are going to see what will be the use of that kind of instrument and how it can be useful for all the different countries, including the U.K. Another point is about the single market. If we can get an agreement to remain, then we can get a free trade agreement with the U.K. We have more in common than different.

“According to my experience, not only with the European Flour Millers but with other E.U. associations, I think that everyone is going to work to make sure that we can stay with the benefit of the common work we have been doing for a long time. The different food and drink associations in different countries, with the milling associations especially, have been active and lobbying with different national governments and the Commission, just to make sure that everything is going to be okay. With NABIM, we share the same objectives.”

The value of shared expertise is important, he said.

“The U.K. has been very precious in what they have been giving to the expert committees at EFM, the association, and we are working very closely with NABIM for that,” he said. “Practice in our industry is going to stay a common concern, whatever the Brexit impact. The vote is the vote, but even the U.K. government doesn’t know what it wants to do.”