Towards EUDR 2026: Challenges and Supply Chain Readiness for FMCG Companies

EUDR for FMCG Companies: Supply Chain Challenges & Readiness

From Regulatory Compliance to Supply Chain Readiness

The European Union Deforestation Regulation (EUDR) is becoming increasingly important for companies operating global supply chains. For the Fast-Moving Consumer Goods (FMCG) sector, EUDR is not simply an environmental requirement. It can influence how companies select and evaluate suppliers, ensure raw material traceability, manage supply chain data, conduct risk assessments, and ensure that products are ready for the European Union market. With the current implementation date for large and medium-sized companies set for 30 December 2026, FMCG companies need to move beyond simply understanding EUDR and begin building supply chains that are ready to meet due diligence requirements.

What Does EUDR Actually Require?

There are three key requirements that relevant products must fulfil:

EUDR Compliance Requirements

01 | Deforestation-Free: Products must not originate from land that has been subject to deforestation or forest degradation as defined under the regulation.

02 | Legal Production: Commodities must be produced in accordance with the relevant legislation in the country of production.

03 | Due Diligence Statement: Products must be covered by a Due Diligence Statement (DDS) before being placed on the European Union market or exported from the EU.

Why Is EUDR Relevant to FMCG Companies?

EUDR covers seven key commodities associated with deforestation:

• Cattle

• Cocoa

• Coffee

• Oil palm

• Rubber

• Soya

• Wood

  
  

For FMCG companies, these commodities may enter the supply chain through a wide range of raw materials, ingredients, packaging materials and other products. This makes supply chain visibility and traceability increasingly important.

Challenges for FMCG Companies in Addressing EUDR

One of the key changes introduced by EUDR is the increased need for traceability down to the production location.

Companies need to understand the following supply chain:

Finished Product → Raw Material → Supplier → Processor/Trader → Production Location

The implementation of EUDR presents several challenges for FMCG companies, particularly due to the complexity of their supply chains and the number of parties involved. Key challenges include:

• Complex Supply Chains

  FMCG companies typically operate long and complex supply chains involving multiple suppliers, processors, traders and producers. This can make it difficult to trace commodities back to their actual production locations.

• Limited Traceability

  Available information often only covers the supplier's name or country of origin. However, EUDR readiness requires greater visibility of the commodity's origin and production location.

• Geolocation Data

  The availability of accurate geolocation data is one of the key challenges. Companies need to ensure that production location information is available, accurate and traceable to support the due diligence process.

• Supplier Readiness

  The level of readiness can vary significantly between suppliers. Not all suppliers have established traceability systems, adequate documentation or the capability to provide the data required to meet EUDR requirements.

• Data Quality & Consistency

  Data collected from different suppliers may vary in format, completeness and quality. Companies therefore need to ensure that supply chain data is consistent, accurate, verifiable and properly documented.

• Risk Assessment & Mitigation

  Companies need to assess risks related to deforestation, legal production and their wider supply chains. Where risks or information gaps are identified, appropriate mitigation measures need to be determined and implemented.

• Cross-Functional Coordination

  EUDR is not solely the responsibility of the Sustainability team. Successful implementation requires collaboration across Procurement, Supply Chain, Quality, Legal/Compliance, IT/Data, Sustainability and Management to ensure that processes, data and documentation are managed effectively.

  
  

What Should FMCG Companies Prepare?

Companies can begin their EUDR preparation through five key stages:

From Compliance to Supply Chain Resilience

EUDR presents new challenges for FMCG companies. However, preparing for EUDR can also provide an opportunity to strengthen broader business systems and supply chain resilience.

Better Traceability

Companies can gain greater visibility of the origin of their raw materials.

Better Supplier Management

Companies can identify suppliers with gaps in traceability, documentation and data readiness.

Better Risk Management

Deforestation, legality and supply chain risks can be managed in a more systematic and structured manner.

Better Data Quality

Supply chain information can become more structured, consistent and verifiable.

Better Market Readiness

Companies can become better prepared to meet the requirements of customers and markets applying deforestation-related standards.

Stronger Sustainability Governance

EUDR can be integrated into broader sustainability, responsible sourcing, procurement and risk management systems.

Referensi :

2. European Commission - EUDR ImplementationEuropean Commission - EUDR Implementation Resources

3. European Commission - Understanding Due DiligenceEuropean Commission - Understand Due Diligence

4. EUR-Le- Regulation EU) 2023/1115EUR-Le - EUDR Consolidated Regulation

5. European Commission - EUDR Information SystemEuropean Commission - EUDR Information System