Trade, taxes and geopolitical tensions set the tone for 2026

2026 has kicked off with geopolitics firmly centre stage for the food and nutrition industry, with trade and tariffs increasingly serving economic as well as political aims. Food policy, meanwhile, has continued to evolve in the background, shaping the tone for the year ahead.

Trade set the pace early on as the EU–Mercosur deal edged closer to the finish line following Council sign-off after more than 25 years of negotiations, only to face a fresh hurdle in the European Parliament, which voted to send the agreement to the Court of Justice for legal review – injecting new uncertainty and delay into the process.

At the same time, governments are continuing to experiment with regulatory and fiscal levers to influence diets. In the UK, new restrictions on junk food advertising are now in play, narrowing how and where less healthy products can be marketed, while from 1st January Lithuania’s new tax on drinks containing sugar or sweeteners has come into effect. Together, these measures add to a growing patchwork of policy interventions across Europe. 

Debates over consumer understanding on veggie food labelling are also resurfacing at EU level. With Cyprus assuming the rotating Presidency of the Council, negotiations are set to resume on the contentious “veggie burger” ban, a proposal driven by concerns around consumer clarity when it comes to food naming of plant-based meat alternatives.

Alongside these policy discussions, a wider geopolitical backdrop is coming into sharper focus for the food industry. Trade agreements and tariffs are increasingly being used as tools of leverage, blurring the lines between food policy, economic security and foreign affairs, and making a clear grasp of the geopolitical landscape essential for food businesses. 

From contested trade deals to diet-shaping taxes and geopolitical manoeuvring, this edition explores how food and nutrition policy is shaping up at the very start of 2026.

The Whitehouse Food & Nutrition Team

Policy and regulatory developments

Council moves the EU-Mercosur partnership one step closer to the finish line, Parliament brings it two steps back 

The EU–Mercosur Partnership Agreement (EMPA) and its accompanying Interim Trade Agreement (iTA) moved a step forward this month, when the European leaders in the Council authorised their signature after more than 25 years of negotiations. The agreements aim to strengthen political cooperation and expand trade with the Mercosur bloc and are designed to deliver early economic gains through tariff reductions, improved market access for EU exporters and service providers, and protections for geographical indications. Both texts also include environmental provisions, including a shared objective of climate neutrality by 2050. However, the agreements contain a “rebalancing mechanism” allowing either side to seek compensation if new policies undermine expected benefits. Mercosur countries argue that the EU Deforestation Regulation could trigger this clause, raising questions about how it would operate in practice. Political uncertainty deepened on 21st January when the European Parliament narrowly voted to refer the deal to the Court of Justice of the EU for a legal review on its compatibility with EU treaties. Concerns among MEPs centre on potential impacts on European farmers and environmental standards. The Parliament cannot proceed until the Court issues its opinion, potentially delaying the process by 18–24 months and marking a significant setback for supporters of the agreement. 
 
Lithuania introduces tax on beverages with sugar or sweeteners 

Lithuania has implemented an excise tax on sugar-sweetened beverages (SSBs), effective 1st January 2026, as part of efforts to reduce diet-related health risks. The tiered tax applies to drinks with added sugars or sweeteners, with higher rates for beverages containing more sugar, while certain products, such as food supplements, food for special medical purposes, and drinkable dairy products are exempt. Health authorities highlighted that high consumption of SSBs contributes to obesity, chronic diseases and premature deaths, and also cite evidence that non-sugar sweeteners are associated with higher risk of diabetes, cardiovascular disease and early death. The World Health Organization and Lithuanian officials emphasised that the measure is evidence-based and intended to encourage healthier consumption, support product reformulation and reduce noncommunicable diseases. Lithuania is now the 13th EU Member State to introduce a tax on sugar sweetened beverages, meaning that almost half of the EU has adopted such a measure. With excessive sugar consumption and obesity remaining widespread across Europe, an increasing number of countries appear to see these taxes as a necessary policy tool. At EU level, the introduction of an EU-wide measure is also under consideration. 
 
UK’s new junk food advertising restriction come into force 
 
The UK Government brought into force its new regulations on 5th January 2026, restricting the advertising of less healthy food and drink products, forming part of its wider strategy to reduce childhood obesity. Under the rules, adverts for less healthy products are banned on television before the 9PM watershed and prohibited online at all times, targeting the media channels and time slots most used by children and young people. Government analysis suggests the measures could remove up to 7.2 billion calories from children’s diets each year, reduce childhood obesity by around 20,000 cases, and deliver an estimated £2 billion in long‑term health benefits. Ministers have framed the restrictions as building on voluntary industry action introduced in October 2025 and complementing existing initiatives, including the Healthy Food Standard, planning rules limiting fast‑food outlets near schools and earlier interventions such as the Soft Drinks Industry Levy (SDIL). The regulations mark a further tightening of the UK’s regulatory environment around food marketing by the Government, with implications for advertisers, retailers and manufacturers as compliance becomes more stringent across broadcast and digital channels. The European Commission is also exploring similar measures; setting out in the EU Safe Hearts Plan, published in December 2025, its priority to limit children’s exposure to unhealthy food advertising, particularly via digital channels.  To achieve this, the Plan committed to review of the Audiovisual Media Services Directive by the end of 2026.  
 
Cyprus Presidency to advance negotiations on “veggie burger” ban 
 
Cyprus assumed the rotating Presidency of the Council of the European Union on 1st January 2026, inheriting the stalled negotiations on the so‑called “veggie burger” ban, a key element of the Commission’s proposed revision of the Common Market Organisation (CMO). The revision proposed reserve seven terms - including “burger,” “steak” and “sausage” - exclusively for meat products. The interinstitutional trilogues on this file ended in December 2025 without agreement after the European Parliament, led by MEP Céline Imart (France, EPP), who further escalated the talks by adding demands to ban the terms “foie,” “ham” and later “liver” for plant-based products during the final round of talks. The Council, led by Denmark at the time, opposed these restrictions, describing them as an unnecessary burden and seeking to narrow the list of protected terms, thus preventing an agreement. The Danish Presidency further criticised how the debate had drifted away from the original purpose of the CMO revision, which was centred on strengthening farmers’ bargaining power through mandatory written contracts. With the Cypriot Presidency now assuming responsibility for the file, discussions will resume against this backdrop of these diverging positions, and attention will turn to whether the Council maintains its previous stance or adjusts its approach as the Presidency seeks to guide the file towards compromise. Major retailers and food companies - including Aldi and Lidl - have warned that forcing plant‑based products to adopt artificial, unfamiliar labels, ultimately risks confusing consumers and potentially undermining established purchasing behaviour. For UK manufacturers, ongoing talks to establish an EU-UK Sanity and Phytosanitary (SPS) agreement creates an added risk as any EU‑level ban on “meaty” terms could automatically apply in the UK unless an exemption is secured. The UK Food Standards Agency understood to have told stakeholders that UK firms would be subject to the new EU rules on plant‑based labelling, if implemented.