On 1 January 2017, France started a two-year trial of a mandatory country of origin labelling (hereinafter, COOL) scheme, which requires producers of milk, food containing milk products and food containing meat to provide information on the country of origin of the products. The scheme was introduced through Decree No. 2016-1137 (i.e., Décret n° 2016-1137 du 19 août 2016 relatif à l'indication de l'origine du lait et du lait et des viandes utilisés en tant qu'ingrédient, hereinafter, the Decree). Before the end of this trial period, France has promised to provide a report to the European Commission (hereinafter, Commission) that would allow it to review consumer patterns and the potential impact on the internal market. In view of the report, the Commission may consider implementing such a scheme in all EU Member States.
According to Article 2 of the Decree, the indication of the origin of meat must include, for each category of meat, the following information: 1) country of birth; 2) country of fattening; and 3) country of slaughter. When a category of meat comes from animals born, raised and slaughtered in the same country, the indication of origin may be given as ‘Origin: (name of country)’. Similarly, Article 3 of the Decree provides that the indication of the origin of milk or milk used as an ingredient in dairy products must include the following information: 1) ‘country of collection: (name of country)’; and 2) ‘country of transformation: (name of country where it has been conditioned and transformed)’. When milk or milk used as an ingredient in dairy products has been collected and processed in the same country, the indication of origin may appear as ‘origin: (name of country)’. When the steps referred to in Articles 2 and 3 of the Decree are carried-out on the territory of several EU Member States, the mention ‘EU’ may be used, instead of the name of the country or countries to designate the location of the steps involved. In addition, when those steps are carried-out on the territory of several countries located outside the EU, the words ‘Outside EU’ can be used instead of the name of the country or countries to designate the location of the relevant steps.
According to Article 6 of the Decree, products lawfully produced or marketed in another EU Member State are not subject to the provisions of the Decree. The implementing decree of 28 September 2016 (Arrêté du 28 septembre 2016 fixant les seuils prévus par le décret n° 2016-1137 du 19 août 2016 relatif à l'indication de l'origine du lait et du lait et des viandes utilisés en tant qu'ingrédient) establishes the thresholds required for the application of the Decree at 50%, for milk used as an ingredient in a dairy product, and at 8%, for meat used as an ingredient in a processed product. Therefore, France’s COOL scheme requires that, inter alia, ready meals with a meat content of more than 8% specify where livestock was born, reared and slaughtered.
There are already a number of food products that are subject to mandatory COOL in the EU, including honey, fruits and vegetables, fish and olive oil. Concerning meat, COOL was made mandatory for unprocessed fresh beef and beef products in the aftermath of the mad cow disease epidemic (i.e., Bovine spongiform encephalopathy, or BSE). In addition, the EU’s Food Information Regulation No. 1169/2011 (hereinafter, FIR) requires that unprocessed fresh, chilled or frozen meat of swine, poultry, sheep and goats be accompanied by COOL (see Trade Perspectives, Issue No. 23 of 13 December 2013). Likewise, the FIR requires that COOL be mandatory in instances where a failure to provide such information could mislead consumers. The scope of mandatory COOL in the EU stands to be further expanded by specific provisions in the FIR that enable the Commission to table legislative proposals on mandatory COOL for, inter alia, other types of meat, milk, unprocessed foods and meat used as an ingredient in processed foods.
After being notified by France of the draft Decree No. 2016-1137, on 12 April 2016, the Commission consulted the Standing Committee on Plants, Animals, Food and Feed (composed of representatives from the Commission and the EU Member States, and, hereinafter, SCPAFF) on the matter. During the relevant meeting of the SCPAFF, a number of Member States raised concerns about the negative impact of the French measure on the access of non-French ingredient suppliers, particularly on small- and medium-sized enterprises, to food production and distribution in France. Other delegations did not oppose mandatory COOL as such, but expressed a preference for a harmonised approach at EU level, while a few delegations supported the French draft. The Commission reminded the SCPAFF that the FIR allows EU Member States to adopt national measures on COOL on food under certain conditions. It also stated that “the topic was intensively debated at the co-decision stage and that the political and legal context has significantly evolved in recent years”.
Other EU Member States are already moving to adopt similar COOL legislation. In the last few months, the SCPAFF has held exchanges of views on Italian, Lithuanian, Portuguese, and Greek draft measures prescribing the indication of the origin of milk, dairy products and, in one case, rabbit meat. Such national measures show a piecemeal approach within the EU’s internal market. COOL appears to be a national priority in some EU Member States, possibly implying that what is produced in those EU Member States is of better quality and safer than products from abroad. It sometimes appears that such measures are proposed for rather simplistic and protectionist reasons. It is for these countries to recall that COOL was imposed (for food safety and traceability reasons) for beef in the aftermath of the BSE scandal. At that time, there was a food safety matter with, in particular, British beef. COOL helped all EU beef to regain consumer confidence. Milk, meat and meat products are all subject to the same harmonised EU hygiene and safety standards. For specific quality products, inter alia, harmonised geographical indications requirements are in place at EU level.
Already on 21 January 2015, Members of the EU Parliament’s Committee on the Environment, Public Health and Food Safety (hereinafter, MEPs) tabled a motion for a resolution urging the Commission to put forward a legislative proposal incorporating mandatory COOL for meat used as an ingredient in processed foods. The MEPs’ document followed a report that the Commission submitted to the European Parliament and the Council of the EU in December 2013, which elaborated on the consequences of making COOL compulsory for this sort of meat. The Commission’s report concluded, in relevant part, that there was a need for EU institutions to further discuss the relevant issues and, on that basis, that the Commission would consider the appropriateness of tabling a legislative proposal (see Trade Perspectives, Issue No. 3 of 6 February 2015).
European trade associations also appear to prefer a harmonised approach on COOL for milk and meat as an ingredient. The European Dairy Association (hereinafter, EDA) has expressed serious concerns to the Commission regarding the French initiative on mandatory origin labelling, which, in its view, reintroduces national barriers among EU Member States and hinders harmonised implementation of the FIR. The Commissioner responsible for health and food safety informed the EDA that the Commission had not raised any objection to the French measure and that the potential effects on the internal market, including its impact on imported foods from other EU Member States, would be evaluated in the context of the French authorities’ report due in 2018. The EDA then turned to the EU Ombudsman, who launched an inquiry into the matter and found that the Commission’s implicit approval of the French measure complied, from a procedural point of view, with the relevant legal requirements, in particular Article 45(3) of the FIR, since the Commission had consulted the SCPAFF on the Decree. Following that meeting, the Commission informed the complainant that it would not issue a negative opinion on the Decree. As regards the substance of the Commission’s decision, the Ombudsman found in its Decision in case 1212/2016/PMC of 12 September 2016 that, at this stage, the EDA had not demonstrated maladministration on the part of the Commission. The Ombudsman reassured the EDA that, should it raise such concerns with the Commission, and should it consider the Commission’s response to be inadequate, it could complain to the Ombudsman again.
The European Meat and Livestock Trading Union (UECBV) reportedly argues that France’s two-year COOL scheme trial could contribute to a “fragmentation of the single market”. FoodDrinkEurope (FDE), representing the European food and drink industry, has reportedly challenged France’s COOL scheme for meat in ready meals and milk in prepared foodstuffs, claiming that it would lead to higher packaging and production costs, entail enforcement costs, and increase an administrative burden on businesses. FDE is reportedly arguing that the measure is aimed at encouraging local sourcing without regard to the detrimental impact that it may have on established supply chains, which transcend national, and sometimes even European, borders. It is not clear whether Article 6 of the Decree, which states that products lawfully produced or marketed in another EU Member State are not subject to the provisions of the Decree, may accommodate these concerns. A French producer using German meat as an ingredient must indicate so. Only Germany-based producers, which are active on the French market, even if they use, inter alia, French meat, would be exempted from the additional COOL.
So far, the Commission does not appear to be inclined to introduce harmonised legislation for mandatory COOL for milk and meat used as an ingredient, and appears to prefer voluntary COOL. Another matter is that the Decree will inevitably lead to labels similar to the notorious COOL ‘blend of EU and non-EU honeys’ on honey (see Trade Perspectives, Issue No. 14 of 15 July 2016). It cannot be excluded that manufacturers in France will have to use similar wordings for their meat and milk ingredients. Current voluntary labels of a French retailer in Belgium provide for alternatives and state, inter alia, ‘produced in Belgium with poultry of Belgium, Germany or the Netherlands, rice of Pakistan and spices of Thailand’. Such ‘alternative’ labels could guarantee a certain degree of ‘sourcing and supply-chain flexibility’ for producers without misinforming consumers.
The introduction of COOL requirements has consistently proved to be a controversial matter, as shown by the FIR’s negotiating history, which evidences severe disparities of opinion at the very heart of EU institutions, EU Member States and relevant stakeholders. Should the Commission embrace the concerns of the ENVI Committee’s MEPs and develop a draft instrument making COOL for meat used as an ingredient mandatory, it would have to take into account the EU’s international trade obligations. In this respect, there are a number of lessons learnt from the US experience on mandatory COOL for certain agricultural commodities, which gave rise to a landmark WTO dispute triggered in 2008 (see Trade Perspectives, Issue No. 3 of 6 February 2015). On 18 May 2015, the WTO Appellate Body issued its Report in United States – Certain Country of Origin Labelling (COOL) Requirements regarding compliance with previous recommendations made by the WTO Dispute Settlement Body (hereinafter, DSB) in relation to US COOL measures for meat. For the most part, the Appellate Body upheld the previous findings and conclusions of the compliance panel, that neither the original nor the amended US COOL measure was found to meet the applicable WTO requirements. The dispute appears to have finally reached the stage where (see Trade Perspectives, Issue No. 11 of 29 May 2015), Mexico and Canada were authorised by the WTO DSB to implement retaliatory measures (i.e., to suspend concessions for a significant amount) against the US, prompting the US to amend its domestic legislation in order to comply with the recommendations of the WTO DSB.
The increased (regulatory) activity in EU Member States and the EU on COOL (in particular the reports of France after its trial, but also of other EU Member States and eventual legislative proposals put forward by the Commission) should be monitored and stakeholders should be prepared to participate in shaping potentially harmonised EU legislation by interacting with relevant EU institutions, trade associations and affected stakeholders. These schemes would have to be EU and WTO consistent so as to avoid potentially costly and destabilizing litigation and legal uncertainty for economic operators.
No comments:
Post a Comment