Business · Trade · 9 hrs ago
EU sustainability rules could threaten Vietnam’s low-cost coffee exports
Nestlé Vietnam’s chair says the EU’s stricter sustainability rules could make Vietnam’s cheap coffee harder to export.
Vietnam is the world’s second-largest coffee producer and the biggest producer of robusta, which is widely used in instant coffee.
The EU is a major market, consuming about 24% of the world’s coffee.
Its Deforestation Regulation aims to curb forest damage linked to products including coffee and applies to most companies from December 30, 2026, with some smaller businesses given more time.
Vietnam is working with the EU to help its coffee sector meet the rules.
A multiyear EU-backed project aims to support more than 400 coffee-related businesses and indirectly benefit an estimated 1.4 million farmers and workers.
Nestlé has also worked with a Vietnamese research institute to develop disease-resistant coffee plants, distributing 100 million plantlets to farmers at subsidized rates.
The rules could push producers toward more sustainable farming and higher-value coffee, helping retain more value in Vietnam.
Nestlé Vietnam chairman Binu Jacob warned that tighter EU sustainability rules could make Vietnam’s low-cost coffee less attractive to export.
He said Vietnam must produce sustainable coffee that meets high standards and move up the value chain to maintain exports.
The EU Deforestation Regulation applies to most companies from Dec. 30, 2026, with some smaller businesses covered later in 2027.
Vietnam is working with the EU on compliance, including through an EU-backed project supporting the coffee sector.
Vietnam is the world’s second-largest coffee producer and the largest producer of robusta.
- Who
- Binu Jacob, chairman and managing director of Nestlé Vietnam, warned about the rules’ impact on Vietnamese coffee exports.
- What
- He said EU sustainability rules could reduce the appeal of Vietnam’s low-cost coffee unless producers meet higher standards.
- When
- Jacob made the remarks at a summit on Nov. 3. The article was published on Nov. 9, 2026.
- Where
- At the Fortune Southeast Asia 500 Summit in Ho Chi Minh City, Vietnam.
- Why
- The EU is tightening sustainability rules, including requirements intended to curb deforestation and forest degradation linked to commodity production.
This story does not have two clearly opposing sides.
Jacob warned at the Fortune Southeast Asia 500 Summit that EU rules could make low-cost Vietnamese coffee less attractive to export.
The EU Deforestation Regulation is due to apply to most companies.
Some smaller businesses will need to comply with the regulation.
- Vietnam’s coffee production
- World’s second-largest producer and largest producer of robusta
- Europe’s share of global coffee consumption
- About 24%
- EU Deforestation Regulation
- Applies to most companies from Dec. 30, 2026
- SustainCoffee project
- Aims to support more than 400 coffee-related businesses and indirectly benefit an estimated 1.4 million farmers and workers
- Nestlé coffee plantlets
- 100 million disease-resistant plantlets distributed to farmers at subsidized rates in central Vietnam
What people are saying
Vietnam was always known to produce cheap coffee, but cheap coffee is no longer going to be attractive to export because [the] EU is coming up with very stringent norms
So if we don’t go up the value chain and create coffee that is sustainable and that meets the very high standards, we will be unable to export
With small farms, it’s quite easy to move from the old ways of traditional farming to regenerative farming
Once you do that, Vietnam has a competitive advantage to export more and ensure that more value stays here