Coffee firms ill-prepared for EU rules on living wages, report finds

LONDON, June 12 (Reuters): None of the world's top coffee roasters and traders have committed to paying farmers a living income even though this is set to become a legal obligation for large companies operating in the EU from 2029, according to a major coffee sector report.

The EU's landmark Corporate Sustainability Due Diligence Directive (CSDDD) requires large companies to fix human rights and environmental issues in their supply chains or face fines of up to 3 per cent of global turnover.

According to the biennial Coffee Barometer, prepared by a group of NGOs, the law is the first EU instrument to recognise living income as a binding human right - a recognition that in turn has direct commercial implications for the coffee sector.

Large companies, moreover, will need to have set up their compliance systems well in advance of 2029 in order to comply.

"Pricing structures, contract duration and payment terms are no longer purely commercial decisions; where they are linked to adverse human rights impacts, companies are required to change them," said the report.