Managing director Richard Walker blames Ukraine invasion for temporary u-turn but pledges to go back to using sunflower oil in on-brand products as soon as possible

UK supermarket chain Iceland has been forced to rethink its previous pledge to remove palm oil from all of its own-brand products, with the firm claiming the knock-on impacts of Russia’s invasion of Ukraine have sent the costs of alternatives such as sunflower oil soaring to unaffordable levels.

Writing in his blog on Iceland’s website, the firm’s managing director Richard Walker said the invasion of Ukraine – for which the sunflower is a national emblem – was making it difficult to obtain sunflower oil, as along with Russia the two countries account for 70 per cent of global supply of the commodity.

The war has therefore further exacerbated a hike in prices for a product that Iceland has been relying on as a major alternative to palm oil, which the supermarket pledged in 2018 to phase-out from its own-brand products altogether over concerns about its links to driving deforestation.

“When Iceland removed palm oil as an ingredient from all its own label products in 2018, to take a stand against tropical deforestation, we greatly increased our reliance on sunflower oil,” Walker wrote. “Now that it has suddenly become totally unobtainable, we are working closely with our suppliers to find alternatives. In many cases we can substitute rapeseed oil, but there are some recipes where the only viable substitute for sunflower oil – either because of its processing properties or taste issues – turns out to be … palm oil.”

While admitting that the war in Ukraine was not the sole reason for supply issues and rising prices, Walker argued it had made the situation “substantially worse”. Russia and Ukraine together account for 30 per cent of the world’s wheat exports, while Russia is one of the world’s leading exporters of fossil fuels.

“Our suppliers of meat, poultry, eggs, dairy products and a range of other foods are not just warning us of massive inflationary pressures hurtling towards them: they are seriously worrying about whether they will be able to secure key ingredients at all, or have the diesel to transport them to depots and stores if they do,” he wrote.

Iceland’s landmark 2018 palm oil pledge attracted significant media coverage at the time, with a number of green groups voicing their support for the move, although others warned that simply backing away from palm oil altogether would not help to improve environmental practices and standards in the industry.

In his blog post yesterday, Walker said he hoped the use of sustainably-sourced palm oil where necessary in some of its products firm would merely be a temporary measure until the volatility of the market and global supplies for sunflower oil return to normal in future. However, Walked said he remained “sceptical” as to whether truly ‘sustainable’ palm oil would be possible.

“I say this with huge regret, but the only alternative to using palm oil under the current circumstances would simply be to clear our freezers and shelves of a wide range of staples including frozen chips and other potato products,” he wrote. “I note… assurances from the industry that it really has cleaned up its act on deforestation – and we will be carefully monitoring its performance in the weeks and months ahead.”

Reacting to Walker’s announcement, the Roundtable on Sustainable Palm Oil (RSPO) – the voluntary, industry certification body aimed at improving environmental and social standards in the palm oil industry – welcomed Iceland’s decision to back responsible suppliers, arguing palm oil remains “an important ingredient in meeting the needs of consumers in the UK”.

“RSPO certified sustainable palm oil – of which there are adequate supplies on the global market – is produced according to strict criteria which includes preventing deforestation and exploitation of workers and local communities,” said Inke Van Der Sluijs, market transformation director at the organisation. “As the most productive vegetable oil per hectare in the world, sustainable palm oil is an important solution to the growing food security needs of the global population, particularly in the face of shocks and crises affecting other food crops.”

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