Just when the last EU parliamentary session was drawing to its close, EU legislators adopted a package of laws to ban branded foods being presented with an identical get-up in spite of having different compositions. This prominent ban on "dual food quality" may be well-meant and intended to prevent consumers from being misled, but in actual practice it will cause considerable trouble and a high degree of legal uncertainty for producers and retailers.
For several years there has been a heated debate at the European level on the phenomenon of dual food quality. The accusation was that branded goods – particularly those in Eastern Europe – were of worse quality and of a different composition than their Western European equivalents.
However, a study conducted by the EU Commission and published in June 2019, which involved 1,380 samples of 128 different food products from 19 EU Member States, failed to produce evidence of such an East- West gap. Just 9% of the products compared showed different compositions but identical get-up. Incidences of different compositions came from all parts of Europe. Moreover, the Joint Research Centre of the European Commission found that the differences actually detected in the composition of the tested products did not necessarily constitute a difference in the product quality.
The data currently published do not indicate any (meaningful) practical problem, but the ban has already been adopted so that the results will not have any effect. The Unfair Competition Directive will be supplemented by a ban on the identical marketing of products of different compositions in different EU Member States, if not justified by "legitimate and objective factors" (such as health reasons) which, however, need to pass case-to-case testing.
From a legal point of view, three aspects stand out as major practical problems. One is the great legal uncertainty – the wording is extremely vague und it is entirely unclear what is meant by substantial differences in composition. Frequently, brand and proprietary products are produced locally, with their composition varying slightly depending on the season and availability of raw materials. It is also questionable whether regional consumer preferences can be used for justification. After all, it is quite conceivable that people in one country tend to prefer dark chocolate while those in another country in their majority opt for milk chocolate.
Next: when is a product marketed as identical? Does the sole labelling in the relevant local language suffice to make its marketing non-identical? It may be that the producer's or retailer's logo by itself suffices to make it identical. What's more, EU legislators have chosen the form of a directive which grants Member States more leeway in their national implementation, allowing them, i.a., to implement much more rigorous provisions.
As third aspect, there is the impact of the enormous fines threatened. The provisions on dual food quality are part of a package of consumer rights, which introduces massive penalties in the aftermath of the Volkswagen emissions scandal "Dieselgate". It provides for fines of up to 4% of an undertaking's annual sales in the Member State affected or up to EUR 2m if sales figures cannot be ascertained. Once again, Member States can impose much stricter penalties.
These three aspects show that the dual food quality ban produces considerable complexity for market participants in the food supply chain. Although the EU Commission has announced that it will develop a guideline for help, national legislators are still required to implement the directive within two years of its adoption, and national government authorities and courts are challenged to reduce its complexity in order to have consumers actually profit from the ban on dual food quality and not just create legal uncertainty among the industry.
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