Scoop: Foodtech investors representing €1.7bn unite against EU ‘meaty’ label ban in internal letter

In October, the European Parliament approved a proposal to limit the use of certain traditional meat terms like "burger" and "sausage" for plant-based products.

The ban, first put forward by French conservative MEP Céline Imart, argues that consumers might be misled or confused by names that evoke meat when the product contains no animal components.

But many foodtech founders and investors have questioned those claims, saying they’re concerned that forcing plant-based companies to relabel their products could stifle the growth of the budding sector.

Now, a cohort of European foodtech investors are taking things a step further by urging the European Commission to scrap the proposal in an open letter, sent last week and seen by Impact Loop.

The letter is signed by 10 foodtech investors representing some €1.75bn in assets: FoodLabs, Clay Capital, CPT Capital, ECBF, Oyster Bay Venture Capital, Planet A Ventures, Gullspång Re:Food, Synthesis Capital, Zintinus, and German retail giant Rewe.

“We encourage the Commission to reject the proposed unnecessary constraints on plant-based products,” reads the letter, which was addressed to President of the European Commission, Ursula von der Leyen, and several other politicians including Teresa Ribera, the Commissioner for Competition, and Wopke Hoekstra, the Commissioner for Climate, Net Zero and Clean Growth.

The signatories have called on the Commission to instead “champion regulatory approaches that support clarity, innovation, and economic growth.”

"Should these restrictions be adopted, we expect to see capital increasingly diverted to jurisdictions taking more innovation-friendly approaches,” the letter reads.

“This shift would disproportionately harm European startups, many of which are already operating with tight margins and rely on predictable regulation and investor confidence to scale.”

The European Commission did not immediately respond to our request for comment.

Adding insult to injury

Despite witnessing significant growth in recent years, Europe's alternative protein startups continue to navigate regulatory hurdles like slow novel-food approvals and the high costs of scaling production facilities.

A number of high-profile bankruptcies have also cooled investor appetite for the sector.

While arguably not the greatest threat to the emerging industry, the EU's proposal to ban 'meaty' labels for plant-based products may complicate the entry into what is an already tough market to break into.

"Forced relabelling and market-specific terminology changes, often across multiple languages, would significantly increase costs and divert resources away from the core aspects of these businesses," wrote the investors in the letter.

"Importantly, restricting the terminology these products can use does nothing to advance consumer understanding," the letter continues. "On the contrary, all available evidence shows that consumers are not confused by existing labels, which already clearly indicate that these foods are plant-based."

The letter was sent the same week that Euractiv reported that EU lawmakers were pushing to extend the proposed ban to lab-grown meat products as well.

Felix Leonardt, managing partner at Oyster Bay Venture Capital, who also signed the open letter, thinks the move to extend the ban would be “beyond stupid.”

“The EU should focus on stuff where it can actually protect and help its citizens, like defence or creating a deep capital market that can actually support innovation… and lots of other good things,” he told Impact Loop at the time.