Regulating the food industry in the European Community

CONFERENCEREPORT Regulating the Food Industry in the European Community Brussels, 25-26 June 1992 Representatives from the food industry, law firms and government gathered in Brussels to address food law concerns in the European Community (EC) and the USA. The opening address was by Paul Gray (Advisor, EC Commission, Directorate General III) who stressed that the EC is trying to harmonize food law not food and that people travel throughout the EC and eat the food, so why not freely trade food products amongst member states. Retailers Alfons Schmid (Vice President of Public Affairs, Koninklikje Ahold NV) presented the retailers’ perspective of Community food policy. He emphasized that the ever-increasing flow of product information through labelling does not lead to healthier nutritional habits because there is a lack of educational programmes and therefore understanding by consumers. However, more ad hoc labelling is constantly being requested by the Commission. He called for consistency among member states for enforcement of the regulations, methods of analysis and pesticide residue levels. Clearly, the EC should protect only the health and safety of consumers, as the consumer should be entitled to different qualities at different prices, In addition to the demands of food legislation, retailers are having to adapt to changes in trade and distribution arising from changes in the consumer market (e.g. increases in the number of small households and increases in the number of ethnic groups across the member states) and the producer market (e.g. stricter product quality standards, shorter product life-cycles and delivery lead times and concentration of core activities which provides greater purchasing power). European Food Agency Freida Stack (Assistant Parliamentary Secretary Co-operative Union Ltd) called for the development of a European Food Agency and presented views on why, what and where. A Directorate General (DG) with overall responsibility for food does not exist. For responsibility for nutrition example, labelling and hygiene is divided Food Control - Vol3 No 4 1992

amongst many groups, i.e. DGIII has overall responsibility for nutrition labelling, the consumer policy service is responsible for claims, DGVI has developed vertical proposals and DGIII horizontal proposals for food hygiene. The result is ad hoc decision making and inefficiency which is costly to manufacturers. For example, relabelling within a company is often a two-year process, whereas longer transitional periods or advance notice of labelling changes is required to significantly reduce the cost of label changes. Moreover, the Scientific Committee for Food (SCF), which is available to the Commission for technical expertise, has been criticised for its restricted range of expertise, lack of a clear working structure and independence. Recently, DGIII put forward a proposal to reform the SCF because of the expanded role of the Commission to oversee the implementation of food legislation. The European Parliament (EP), after being faced with the plethora of vertical hygiene proposals in 1991, urged the Commission to address the bureaucratic fragmentation on matters relating to food. Speculation as to the role of this agency include: coordination of scientific advice throughout the Community; representation of the EC in an international context, e.g. Codex Alimentarius; liaison with the Confederation of Food and Drink Industries of the EC; increased coordination between DGIII and DGIV; dealing with all aspects of food legislation; assessing which bodies are competent. The Rafferety report of March 1989 stressed the need “for a more coordinated policy on EC food policy” and the need for an independent central body. Pressure has been brought from various organizations like the European Consumers Association (Beuc), the CIAA and the European Retailer Organization, but the only outcome has been the development of the SCF. It is now time to push for a Food Agency, as the Commission is due for reappointment in 1993. What is needed is an independent agency placed alongside the EC policy division which is free to criticise all those involved, including the Commission.

Labelling Bernard A. De Vet (Head of External Affairs, Unilever N.V.) expressed concern over the quantitative ingredient declaration (QUID) proposal, the claims dossier and the fact that the USA is also about to implement far-reaching labelling requirements. He believes there is no room for more mandatory information on the packaging of foodstuffs and that there is a serious risk of over-informing and thereby confusing the consumer. Only scattered research is available on what the consumer finds important on a label, understands about the information given and what is done with the facts provided. With unpacked food products, however, there is a need to provide minimum information as to their durability and shelf-life. The food industry loses credibility when it is claimed that there would be insufficient room on a pack to declare what its contents, when it is already possible to state what is not in the pack, e.g. ‘contains no artificial . . .’ etc. With regard to ingredient or ‘compositional’ labelling for allergenic substances, declaration of ingredients is more important than banning the so-called suspect additives. Unilever is building trust in the ‘E’ number on products in Holland, all additives with E numbers have a statement that follows the ingredient declaration stating that E signifies approval by the EEC. The QUID proposal will apply only to ingredients which are essential to characterize a foodstuff. If properly legislated and executed by the EC then QUID can provide valuable information - e.g. special emphasis ‘now with more fruit’ means 40% fruit; the name ‘fish fingers’ implies 80% fish; the name ‘mayonnaise’ indicates with 60% oil. In these cases an absolute percentage is helpful and informative. The French experience with QUID has been favourable and, in addition, many manufacturers willingly declare the percentage ingredient when it is a high quality product. The idea that a product can have a fixed composition, described and endorsed by only one ‘true’ name is an outdated concept; QUID is the price the industry pays for compositional freedom. The debate on labelling of foodstuffs and ingredients derived from modern biotechnology is concentrated in the UK, Holland and Germany. In Holland it started with chymosine in cheese, which is produced through recombinant DNA technology and talks are underway between consumers industry regarding some form of labelling. It is 221

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important that industry gains public acceptance of biotechnology, through appropriate labelling and the support of consumer organizations. Voluntary nutrition labelling will shift over the coming years from labelling the ‘big four’ (i.e. energy, proteins, carbohydrate and fat) to include sugar, dietary fibre, saturated fat and sodium. A nutrition claim makes nutrient declaration mandatory, but should consumer understanding/knowledge be developed before the nutrition list is doubled? There is no widespread abuse of claims in the EC and therefore no need for extensive claims legislation. The nutrition labelling directive contains a prohibition to mislead and to use medical claims. What is required is the harmonization of diverging national regulations - of existing or potential barriers to trade. For example, for the descriptor ‘light’ or ‘lite’, which could in practice vary from 20 to 40% reduction, a comparison with official nutritional and dietary recommendations could be appropriate. The FDA, Codex Alimentarius and the CIAA are trying to establish a body of figures and values to cover all or most possible nutrition claims. Mattias Horst (Lawyer, German Association for Food Law and Food Safety) agreed that labelling regulations are only justifiable if they are necessary with respect to providing the consumer with important and understandable information which they can then use to make a responsible decision to purchase a product and to handle it in the required manner. The approach to labelling claims being discussed is that of taking up detailed or general rules or a combination of the two. A manufacturer must be allowed to say anything about his-her product which does not mislead the buyer. Similar and comparable consumer views will have to be understood in all EC states, not solely in the country in which the product is being marketed. Of great importance is full cooperation between the Commission, member states and the food industry to ensure uniform interpretations of EC law texts thus ensuring adequate implementation and avoid distortions of competition and obstacles to trade. US regulations

Charles Lister (Lawyer, Covington and Burling) provided an overview of the US food regulatory system, a description of some of its fundamental labelling rules, a summary of the most important of the forthcoming changes 222

and some of the principal areas in which the US rules or policies differ from those of the Community. Clearly, imports into the US will have to meet US regulations. These regulations are difficult to understand because there are many agencies which legislate the food industry in the USA, i.e. Food and Drug Administration (FDA), The Federal Trade Commission (FTC), The Bureau of Alcohol, Tobacco and Firearms (BATF), US Department of Agriculture (USDA). In addition, there are state and federal regulations, although in some areas the Nutrition and Labelling Education Act (NLEA) preempts the state rules. Contained within FDA are three statutes: the Federal Food and Drug Cosmetic Act, 1938; the Federal Fair Packaging and Labelling Act, 1966; and the Nutrition Labelling and Education Act (NLEA), 1990. With regard to nutritional labelling, the US approach generally tends to be more elaborate, interventionist and venturesome than the EC and reflects more closely the concerns and agendas of the consumer. Differences between the EC and FDA regulations are numerous and often significant. However their goals, as well as their fears, are largely the same. The EC has filed complaints to the FDA informing that FDA nutrition labelling rules are contrary to the Codex and EC standards; however the FDA has been reluctant to modify their proposals. Packaging directive

Frank Grilli (Chairman, European Confectionery and Biscuit ManufacAssociation, CAOBISCO turers’ Environmental Working Group) discussed packaging directive 85/339 and the details of the new directive pre-sently being prepared by the Commission. Interestingly, some member states now have their own national legislation, e.g. Danish legislation states all containers for beer and soft drinks have to be reusable (this was approved by the EC court) and the German Ordinance on the Avoidance of Waste from Packaging was adopted in June 1991 which imposes the following: after 1 December 1991 all manufacturers to take back transport packaging material; after 1 April 1992 group packaging can be disposed of in the shop; after 1 January 1993 idem for sales packaging. Hygiene

Alex Mossel (European Commission, DGIII) was concerned that outbreaks

of foodborne diseases appear to be on the increase, with greater than 10 million per year in the EC. He anticipates that the proposed food hygiene directive, which takes a horizontal approach and contains various codes of practice that have to be developed by the member states, will result in safer food. Enforcement will be left to the member states, the principle of food control will have to be harmonized and EC officials will ensure that member states are carrying out their responsibilities. Also, self-regulation by most manufacturers will occur once they realize that, should a major safety problem occur with their food product, then the media and consumers will put them out of business or reduce their market share. An example was the Austrian wine scandal, where consumers stopped buying the product. This demonstrates that the risk of bad publicity can be enough to enforce the rules. Both the manufacturer and the retaler are criminally responsible for the safety of their products with the result that there will be no blame shifting. Additives

Charles Cremer (Principal Inspector, Belgian Ministry for Public Health) discussed the directives on food additives, sweeteners and colouring. The additive directive states that ‘positive lists’ should be drawn up for the categories of additives which are not yet covered by Community legislation. In addition, conditions of use must be fixed for those additives which require limitations by virtue of available toxicological data. The directive (89007) adopted on 21 December 1988 defines the additives in question, establishes the basic rules on which additive legislation must be based, fixes general criteria for the use of additives and lays down rules on labelling in cases where additives are sold as such. The draft Sweeteners directive lists all authorized sweeteners along with the conditions for their use. The Council had reached a common position on this draft directive. However it was rejected by the EP at its session in May 1992 because of a footnote (requested by Germany) granting an exemption for beer produced according to traditional methods. On I8 June the Commission re-proposed the directive, deleting the footnote and proposing an amendment which would incorporate a general rule allowing the Commission, in accordance with a set procedure, to authorize member states to ban the use of certain additives for traditional products manuFood Control - Vol3 No 4 1992

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factured on their own territory, provided that this ban was in existence in National law prior to 1 January 1992. The draft directive on colourings was proposed on 10 December 1991 and it is relatively complex compared with the Sweeteners Directive. The EP has yet to give its opinion as many problems still have to be resolved. Frere Fine (Lawyer, Frank Cholmeley) spoke on foodstuffs with additives produced in the EC, food products exported into the EC from third countries and their free movement within the EC. The only Court judgement involving additives from a non-EC country was in Officier van Justitie v. Sandoz (Fine, 1992), which involved the prosecution of a Dutch subsidiary of Sandoz, a large Swiss pharmaceutical firm, for having marketed product (‘powerpack’ muesli bars and analeptic beverages containing added vitamin A and D) in the Netherlands, without the permission of the Dutch authorities. According to Dutch law, no vitamins can be added to foodstuffs regardless of their origin. without the permission of the relevant ministry. The Sandoz products in question were produced in Switzerland or the FRG before they were imported into the Netherlands. Article 30 of the Treaty of Rome applied in this case and the court did not consider the country of production, but emphasized that the Netherlands had restrained the importation of foodstuffs ‘lawfully marketed in another member state’. It is interesting to consider whether a foodstuff produced in the Community, but exported to a third country, is deemed to be in free circulation upon re-importatation. Article 10(l) suggests that a product in the above situation would not have free circulation unless customs duties are paid or excused.

Product liability Robert Gielisse (Head of Section, Consumer Policy Service) discussed the product liability directive and the proposed directive on general product safety. Product liability may arise whenever ‘defective’ product(s) is not safe and causes damage or injury to persons and/or property and compensation is to be awarded to individuals enforceable under a civil claim. The proposed product safety directive is preventative in nature and of horizontal effect; it is a matter of public law involving intervention by national authorities. The two directives relate to each other in a complementary way, i.e.

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the establishment of minimum safety levels will prevent risks arising and damage occurring, thereby reducing exposure to liability for compensation. The terms safety and defective product must be clarified. A defective product is not always an unsafe product, whilst an unsafe product usually also seems to be a defective product, when it does not provide the safety which a person is entitled to expect. A product deemed to be unsafe under the product safety directive does not, of itself, prejudge further legal responsibility under the product liability directive. The aim of the general product safety directive is to introduce general safety requirements and an obligation to manufacturers, importers and other professionals in the supply chain to place safe products on the market and therefore to monitor the safety of their products not only during the stages of production but also when they have been released on to the market. A further obligation is to inform consumers of acceptable risks concerning a product so that the appropriate precautions may be taken. It also establishes, as a basic residual rule of law, a general common denominator to more specific legislation on product safety in any area, to which recourse can be taken where there are loopholes or inadequacies in existing legislation or where such legislation does not exist. For example, where specific vertical community rules exist which govern the safety of a product(s), the general safety directive will not apply; however if specific aspects are not covered then the general safety directive will apply only to those aspects. For example, risks from chemical and microbiological contaminants arc not yet covered by existing vertical legislation; labelling and packaging of dangerous substances; and food additives. Elizabeth Wright (Lawyer, Stanbrook and Hooper) discussed the 1985 product liability directive for defective products. Most EC member states have implemented this directive into their national legislation, the exceptions being Spain and Portugal. Agricultural products and game are excluded from this directive but may be included if a member state chooses to include them within their national legislation. Imports from third countries also fall within the application of this directive. The producer and the person(s) importing products from a third country are considered to be liable for any injury which results from its use. Where the producers of a product cannot be identi-

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fied, each supplier is treated as the producer and is consequently liable for the product. Responsibility under this directive is not restricted to personal injury but includes other damage which is exhaustively defined in the directive. The onus of proof of damage lies with the plaintiff who must prove that he has suffered damage, that a defect in the product caused the damage and that there was a causal relationship between the defect in a product and the damage caused. Her advice to traders was to consider national legislation where no harmonization of EC standards exists, when exporting to a member state because, even though member states are obliged to accept the concept of mutual recognition, there are still ways for them to restrict product entry under Article 36. For example, for a product that will be put into free circulation, to what national standard should the manufacturer attain? It may be argued that a manufacturer has not fulfilled his obligations under the proposed product liability directive if he does not manufacture according to the highest national standard. For instance, novel foods may have specific problems because legislation has not been developed. Member states have different approaches to law, for example, the UK and Ireland have civil law whereas continental Europe’s legal system is based on common law.

Conclusion Clearly there are many food legislative concerns of industry, government, consumers and lawyers that need to be addressed. For instance, how useful to the consumer are labelling characteristics? Increasing information is provided on labels but it is not understood by consumers. Perhaps consumer organizations can play a more active part in assisting the consumer to understand labels, and to therefore be better able to make good purchasing decisions and subsequently handle the product in the appropriate manner. Labelling requirescattered increasingly ments are throughout numerous EC regulations, further harmonization and homogeneity is required. Monitoring and changing labelling is expensive and particularly affects small- and medium-sized companies. The US and the EC require a closer harmonization/acceptance of food labelling. Consumer confidence needs to be rebuilt in the area of labelling in addition to that of product safety. The safety directive will establish simple basic principles for the safety

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of consumer products and help to provide consumer confidence. In conjunction with the liability directive, a stronger incentive exists for manufacturers to comply with the general objective of safer products. Concerning the labelling of modern biotechnology products, the industry needs to develop consumer acceptance and the benefits have to be highlighted. Incidents such as those that occurred with food irradiation can be avoided. There is a need for the EC Commission to conduct

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economic evaluation of the costs which would be incurred to carry out their proposals. Would a European Food Agency be better able to handle the numerous tasks required in completing the internal market for foodstuffs? In summary, this was a valuable conference which clearly demonstrated the complex issues still to be addressed within the European Community. These may take many years to sort out the internal market ‘deadline’ of 31 December 1992 will not be met!

Tara Smith Department of Food Science and Technology, University of Reading, UK Reference Fine, F. (1992) Officier van Justitie v. Sandoz, Case 174/82 (1983) ECR 2445 (1984) 3 CMLR 43. Addition of vitaminA and D to muesli bars and beverages. In: Foodstuffs with Additives and Their Free Movement within the EEC, Freres, Cholmeley, Brussels

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