Posts Tagged Label

No sugar rush. CJEU rejects appeal in Dextro Energy labelling case.

The CJEU held yesterday in Case C-296/16P Dextro Energy (text of judgment available in French and German only at the time of posting), an appeal against the General Court’s ruling in T-100/15. The General Court had declined to annul the European Commission Regulation which refused to authorise certain health claims made on foods, other than those referring to the reduction of disease risk and to children’s development and health. Dextro Energy had wanted to include health claims such as  ‘glucose supports normal physical activity’ and ‘glucose contributes to normal muscle function’. The EC had refused: citing (in Regulation 1215/8)

‘Pursuant to Articles 6(1) and 13(1) of Regulation … No 1924/2006 health claims need to be based on generally accepted scientific evidence. Authorisation may also legitimately be withheld if health claims do not comply with other general and specific requirements of Regulation … No 1924/2006, even in the case of a favourable scientific assessment by [EFSA]. Health claims inconsistent with generally accepted nutrition and health principles should not be made. [EFSA] concluded that a cause and effect relationship has been established between the consumption of glucose and contribution to energy-yielding metabolism. However, the use of such a health claim would convey a conflicting and confusing message to consumers, because it would encourage consumption of sugars for which, on the basis of generally accepted scientific advance, national and international authorities inform the consumer that their intake should be reduced. Therefore, such a health claim does not comply with point (a) of the second paragraph of Article 3 of Regulation … No 1924/2006 which foresees that the use of claims should not be ambiguous or misleading. Furthermore, even if the concerned health claim was to be authorised only under specific conditions of use and/or accompanied by additional statements or warnings, it would not be sufficient to alleviate the confusion of the consumer, and consequently the claim should not be authorised.’

The General Court performed its standard review in the face of a wide discretionary room for manoeuvre for the EC, and decided the EC had not exceeded its authority in holding as it did – even in the face of more lenient EFSA recommendations. The Court of Justice has now entirely sided with the General Court. The Judgment is a good reminder of aforementioned standard test (no de novo or merits review; annulment in the event of manifest transgression of power or error in judgment only), and readers best refer to reading the judgment itself.

One consideration however, I should like to highlight: Dextro Energy had suggested the health claims needed to be assessed in light of the target group (determined in the product’s advertising), which, it was suggested, were physically active people for whom consumption of the glucose tablets in question is not harmless. The Court rejected this approach: the population as a whole, for whom the product is available, are the group which the EC justifiably seeks to protect. The manufacturer’s professed target group is not the relevant group to consider (do bear in mind that this is a product which is widely available and not restricted in any way at points of sale):

At 76-77: si les allégations de santé en cause étaient autorisées, elles s’adresseraient à la population en général, pouvant ainsi encourager la consommation de sucres par les personnes autres que les hommes et les femmes bien entraînés. Dans ces conditions, le Tribunal n’a pas commis d’erreur de droit lorsqu’il a rejeté, au point 57 de l’arrêt attaqué, l’argument de Dextro Energy, selon lequel c’était le groupe cible qui importait aux fins de l’appréciation des allégations de santé en cause.

Geert.

 

 

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That sucks: CJEU on science, testing, and laboratories in Dyson.

At first sight, it may seem a bit nerdy to report on Dyson, Case T-544/13. Yet (pun alert) once the dust settled on the judgment, the case in my view reveals quite a lot on how the CJEU sees the role of the EC as a regulator involved in all three steps of risk analysis: risk identification; risk management; and risk communication.

Arguably, misleading information often does more damage than a lack of information. It is on this basis that well-known Dyson, producer ia of bagless hoovers (or vacuum cleaners), challenged a delegated EC Regulation which establishes, in its own wording, ‘labelling and the provision of supplementary product information for electric mains-operated vacuum cleaners, including hybrid vacuum cleaners’. The purpose of the Regulation and of its mother Directive on energy labelling, evidently is to encourage consumers to purchase hoovers using less energy.

The contested regulation requires tests conducted with an empty dust bag. That, Dyson essentially argues, is like testing a Ferrari and a 2 CV on fuel consumption, with both cars in stationary condition (my comparison, not theirs). It will, in Dyson’s plea, lead to: (i) reporting of inaccurate information; (ii) ‘during use’ information not being integrated into the energy performance data; (iii) less incentive for manufacturers to invest with a view to improving the energy efficiency of vacuum cleaners; and (iv) labelling which does not serve to attain the objective of reducing energy consumption and, on the contrary, leads to an increase in energy consumption.

The Court held (at 47) that the Commission cannot be criticised for having failed to require tests conducted with a dust-loaded receptacle if, under its broad discretion, it decided that such tests were not yet reliable, accurate and reproducible. Even though the Court in various parts of the judgment acknowledges the inadequacy of the resulting product comparison, it cannot be held that the Commission made a manifest error of assessment by favouring a test conducted with an empty receptacle over a test conducted with a dust-loaded receptacle (at 53).

The judgment entertains many arguments brought forward however they essentially all revolve around the seemingly unavailable nature of appropriate, peer reviewable testing methods. The Court dismisses them all as (pun alert) hot air and effectively requires Dyson to offer the peer reviewable, repeatable alternative.

With respect, I believe the judgment is fundamentally mistaken. It was obviously not considered to be of a very crucial nature (chamber of three). Yet despite its very focussed nature, it reveals a lot about what the EU expects of its Institutions. In this case, misinformation is essentially considered preferable to no information. Surely (pun alert) that sucks.

The case was before the General Court hence appeal with the CJEU is not impossible.

Geert.

 

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Belgium’s origin labelling of products from Israeli – occupied territories. A lot of beating round the bush.

The Belgian Government has published its ‘notice to retailers concerning origin labelling of products from Israeli occupied territories’. The initiative got a lot of press, in Belgium at least, the past few days. It was announced as the culmination of lengthy preparation in light of the existing difficulties in particular with the EU-Israel and EU-Palestine association agreements. Good summary of those difficulties is provided here by DEFRA. (Compiled in 2009 but the issues have remained more or less the same. Note that the Belgian notice refers as far as the exiting origin obligations are concerned, essentially revisits the DEFRA compilation).

Generally, initiatives like these are problematic at three levels.

Firstly, purely legally, specifically international trade law. Countries introducing these types of regimes (including the UK, Denmark, and now also Belgium) allege that all that is envisaged is consumer information, without any signal or pressure from government to boycott said products. That is cosmetic at best. One cannot seriously argue that given the current context, the ‘informative notice’ is not related to a political signal by the Belgian Government. Any consequences of the notice therefore in my view without doubt are sponsored by the Government and hence fall under WTO discipline. (Note that Palestine is not a WTO Member but Israel is). That same context feeds the argument that the introduction of a label of origin for the occupied Palestine territories serves to make all Israeli produce suspicious in the eyes of the Belgian consumer. That is a highly relevant angle for international trade law.
Secondly, the practical angle. A label of origin requirement is not new. The very existence of different agreements between Palestine, Israel and the EU requires it. Yet controlling those labels has proved impossible so far. Suggestions of lengthy preparation made me curious about the regime the Belgian Government would have devised. The answer is simply that is has devised none. The notice simply says

In order to clarify that these products originate from an Israeli settlement, the following labels are recommended: – ‘Product from the Golan Heights (Israeli settlement)’ – ‘Product from the West Bank (Israeli settlement)’. For products from the West Bank that do not originate from settlements, the label ‘product from the West Bank (Palestinian product)’ is recommended.

There are no indications of who is supposed to attach the labels (‘the retail industry’), who will inspect them, what rules of origin percentages apply. etc.

I am not an economist and hence not in a position to advice whether boycotts such as these actually reach those against whom they are intended. (Which is the third level of problems). Neither am I a public international lawyer who sees clear in the myriad of territorial and other claims which sadly dog Israel-Palestine relations. I am however a litigator and in that capacity I have always preferred doing things with blazing guns once it comes down to boycotts, consumer driven or not: state your case and do not beat around the bush. This notice is disappointing in view of the noise created around it in recent days and it pussyfoots around the real Government intention.

Geert.

 

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Use of Fair Trade labels in procurement decisions – Court of Justice of the EU in Max Havelaar

The Court of Justice of the EU has further completed its views on the use of criteria linked to sustainable development. These are criteria which do not simply refer to environmental characteristics of the product itself. Rather, they convey a message as to the overall ‘process and production methods’, known in jargon as ‘PPMs’, of a particular product or service.

In Max Havelaar, Case C-368/10, the Court had to decide on the use of specific labels in decisions awarding government purchases (‘procurement’) to a particular supplier.The province of North Holland had

–        inserted in the technical specifications a condition requiring the Max Havelaar and EKO labels or in any event labels based on similar or the same criteria;

–        included, for appraising the ability of operators, criteria and evidence concerning sustainable purchasing and socially responsible business, and

–        included, when formulating award criteria, a reference to the Max Havelaar and/or EKO labels, or in any event labels based on the same criteria.

The judgment is quite complex for those unfamiliar with (EU) procurement law In particular, the Court distinguishes in the exact room for manoeuvre between various stages of a procurement decision. Leaving detailed breakdown aside (reference is made to the judgment), the Court’s finding is basically that authorities must make use of descriptive conditions for such criteria, rather than solely referring to specific labels. However they may identify certain labels as leading to a presumption of these criteria having been met, provided of course they allow other proof to be submitted.

For WTO lawyers, judgments like these are not irrelevant. Arguably, adoption of private labels in procurement decisions, may well bring these labels within WTO, in particular, TBT (Agreement on Technical Barriers to Trade), discipline.

Geert.

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