By Jamie Martin
The U.S. dairy sector is raising concerns about the growing impact of European due diligence requirements on American businesses.
The International Dairy Foods Association (IDFA) recently urged the Office of the U.S. Trade Representative to address regulations that are increasing compliance costs for dairy processors and farmers. Industry leaders say the rules are creating administrative burdens that reach well beyond Europe and affect companies operating solely within the United States.
A major concern is the European Union's Corporate Sustainability Due Diligence Directive (CSDDD), which encourages companies to monitor and assess labor and human rights practices throughout their supply chains.
To better understand the issue, IDFA commissioned a legal analysis by Steptoe LLP. The study compared U.S. labor laws with international labor standards across six major areas of worker protection, including child labor, forced labor, workplace safety, freedom of association, nondiscrimination and working conditions.
The findings showed that U.S. laws provide broad worker protections but often use different legal structures than international frameworks. While U.S. regulations typically focus on prohibiting unlawful conduct and providing remedies, international standards increasingly emphasize ongoing risk assessments, stakeholder engagement, documentation and supply chain oversight.
“The United States has extensive laws protecting workers and the environment, and the U.S. dairy sector strongly supports the protection of human and worker rights,” said Michael Dykes, D.V.M., president and CEO of IDFA.
He added, “But our trading partners should respect our regulatory system just as we respect theirs. U.S. companies should not be required to duplicate or layer foreign regulatory requirements on top of the laws they already follow simply because those requirements are being applied through global supply chains.”
These differences have practical effects for dairy businesses. According to IDFA, processors are being asked to complete social audits and compliance reviews because some of their customers operate in Europe. Even when dairy products are sold only within the United States, suppliers may still be required to meet standards tied to European expectations.
The resulting process can include audits, questionnaires, corrective action plans, and extensive record keeping. Businesses serving multiple customers may face separate reviews that cover many of the same issues.
Industry members report that financial impact can be significant. Audit programs often involve direct expenses, employee time, and operational disruptions. A complete audit cycle may cost as much as $27,000 for a single facility and require more than 100 staff hours.
When calculated across the entire industry, IDFA estimates the burden could reach more than $29 million before accounting for additional costs such as travel expenses, production delays, and duplicate audits.
Another challenge involves audit consistency. Dairy companies have reported varying standards, changing expectations, and limited transparency regarding scoring methods. Some businesses also face fees to access detailed audit findings from the facilities they operate.
IDFA maintains that these challenges stem largely from differences between U.S. and international regulatory systems rather than from gaps in worker protections. The organization believes American laws already provide strong safeguards for employees and workplace safety.
To support dairy companies, IDFA plans to use legal review as an educational resource. The analysis can help businesses understand where U.S. regulations align with international expectations and where differences in terminology or documentation may create confusion during audits.
The association is encouraging U.S. trade officials to continue discussions with European regulators and seek meaningful relief from requirements that extend beyond European borders.
IDFA says reducing duplicate audits and unnecessary compliance obligations will help dairy processors remain competitive while continuing to uphold strong labor and workplace standards. The goal, according to the organization, is to ensure American dairy businesses are not unfairly burdened by foreign regulatory requirements that do not directly apply to their operations.
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Categories: National