Animal-based foods are associated with both negative and positive effects on the environment, human health, and animal welfare. The challenge is to transform the livestock sector to reduce its negative effects without foregoing its potential benefits. In addressing this challenge, it is important to account for interactions between local initiatives and global outcomes. Most livestock products are tradeable. Hence, production and consumption decisions at one location have effects on socioeconomic and environmental outcomes at other locations. The resulting danger of leakage is especially present within the EU. Policies that lead to higher production or animal welfare standards in Germany alone risk generating substantial leakage effects and few net benefits for the EU as a whole. Policymakers in Germany and the EU should therefore focus first on reducing consumption rather than production. Each kilogram of meat that is not consumed is a kilogram that does not need to be produced, somewhere on the planet, with attendant benefits for the environment and animal welfare. Second, if production is reduced, it should be reduced in those systems/locations in which it incurs the highest total (economic plus environmental) costs.