Agricultural companies oppose planned tariff change for pizza cheese

The Association of Companies in Agriculture is firmly opposing plans by the Ministry of Finance and Economic Affairs to change the tariff classification of so-called pizza cheese, mbl.is reports.

In a statement, the association said the proposed change would go against repeated court rulings and the government’s previous statements on how the matter should be handled. It also said the change could create a new loophole in the tariff system, undermining domestic production and tariff protection for other agricultural products.

The association is urging the ministry to withdraw the proposal and respect previous government statements and the conclusions reached by Icelandic courts.

Court rulings have repeatedly classified the product as cheese

The dispute over the tariff classification of pizza cheese has a long history. Icelandic courts have repeatedly concluded that adding vegetable oil does not change the fact that the product is considered cheese under current tariff legislation.

Reykjavik District Court reached that conclusion in 2021, and the Court of Appeal upheld it in 2022. The Supreme Court refused permission to appeal later that year, while the Reopening Court rejected an application to reopen the case in 2023.

When the matter was brought before the courts again, Reykjavik District Court rejected an importer’s claims in 2025. The Court of Appeal dismissed the case in March 2026, and the Supreme Court did the same in April.

“This case has been brought before Icelandic courts repeatedly, and the conclusion remains unchanged: cheese is and will remain cheese even when vegetable oil is added,” Margrét Gísladóttir, director of the Association of Companies in Agriculture, said.

“The authorities now appear to intend to reverse their own position and amend the law to achieve a different result for the benefit of a few importers.”

Association says government must honour its statements

The dispute also has a political history. In February 2025, the Association of Companies in Agriculture and five other agricultural organisations objected to similar plans, warning that hundreds of millions of Icelandic króna could be transferred each year from Icelandic farmers to foreign producers and a small number of importing companies.

The minister of industry subsequently said the matter would not proceed without consultation with stakeholders about the operating environment for agriculture.

In November 2025, the Ministry of Finance and Economic Affairs told the EFTA Surveillance Authority, known as ESA, that talks with the Farmers’ Association of Iceland on new agricultural agreements should be completed before a bill amending the tariff schedule was submitted to Parliament.

Those talks have not yet taken place, but the ministry is now proposing the change in a bill covering various taxes and charges.

“The authorities must stand by their own statements. It is not credible to tell ESA and the agricultural sector that the matter will first be discussed as part of a review of the agricultural agreements, and then submit the change unilaterally before those talks begin,” Margrét said.