‘Dual Quality’ Food Products: European Commission Issues Notice Outlining Enforcement Guidance

• 28/09/2017
• Articles

The European Commission (the “Commission”) has published guidance on how national authorities should apply EU consumer and food law in relation to ‘dual quality’ food products (Commission Notice C(2017) 6532 final of 26 September 2017 “on the application of EU food and consumer protection law to issues of Dual Quality of products – The specific case of food” – the “Notice”; available here).

‘Dual quality’ or ‘differentiated’ products are those goods that are marketed throughout the EU’s Single Market under the same brand or trademark but with differences in content, composition or quality in individual EU Member States. The marketing of differentiated products has been the subject of political interest and was addressed by the President of the Commission, Jean-Claude Juncker, in his State of the Union address of 13 September 2017 (available here). The Commission initiative also follows on from specific consumer concerns regarding, for instance, soft drinks, coffee and prepared fish products. The Commission intends this to be a first step in a broader effort to ensure compliance with the legislation on unfair trading practices, and may extend this approach to areas other than food products.

Regulatory Landscape

Three pieces of legislation are central to the Commission’s approach: (i) the General Food Law Regulation (Regulation No 178/2002; available here); (ii) the Food Information to Consumers Regulation (Regulation No 1169/2011; available here); and (iii) the Unfair Commercial Practices Directive (Directive 2005/29/EC – the “UCPD”; available here). Enforcement is a responsibility of national consumer and food authorities, but has a strong cross-border element. National authorities are supported by the Commission and may conduct coordinated cross-border investigations through the mutual assistance procedure contained in the Consumer Protection Cooperation Regulation (Regulation No 2006/2004; available here). In particular, the Commission encourages information-sharing and cooperation between national authorities in cases of parallel investigations into the same business operator or commercial practice.

If a sector-specific regime does not apply, food products are caught by the general provisions of the UCPD. The Commission notes that the UCPD prohibits any commercial practice which contains false information or deceives or is likely to deceive the average consumer, even if the information is factually correct, in relation to the main characteristics of a product, leading the consumer to make a choice that he or she would not have made were it not for that information. In effect, the Commission is concerned by practices which may give consumers the impression of buying a product that differs significantly from a ‘reference product’ marketed elsewhere by the same manufacturer under the same brand.

Degree of Differentiation

The Commission requires food and drink operators to ensure ‘constant quality’ but not identical products. Allowance is made for tailoring products to local conditions (such as consumer preferences and dietary habits), objective differences in sourcing and raw material availability, the staggered introduction of new or modified products, and the price elasticity of local demand.

Nonetheless, particular care should be taken in how such products are presented. If the presentation, marketing or branding of a product is likely to induce consumers to believe that the product is identical throughout the EU, then differences of content or formulation may be in breach of the UCPD. Marketing that stresses, even implicitly, the originality, uniformity or historical continuity of a product is a key concern of the Commission, as are practices that enable different versions of a product to be sold in different markets without making clear the material difference. Finally, the Commission reiterates the importance of ensuring that consumers are fully informed of changes in formulation or composition, especially when this would potentially alter the consumer’s choice.

Case-by-case Methodology

The Notice outlines progressive steps in assessing, on a case-by-case basis, whether differentiated branded food products may be in breach of the UCPD, namely:

• Does the product comply with sector-specific legislation?
• Is the product promoted under the same brand and packaging?
• Does the composition of the product differ significantly from the version(s) sold elsewhere in the Single Market?
• Is the consumer sufficiently informed about this difference?
• And if consumers were informed, would they buy the product all the same?

The key question, therefore, is whether a sufficiently-informed consumer would nevertheless buy the differentiated product. If the consumer would not, a breach of the UCPD may arise.

Other Actions

The Notice is published as part of the Commission’s wider efforts to enhance food quality compliance. The Commission has financed its Joint Research Centre to develop a methodology for food comparative tests, and allocated funds to national authorities for studies and enforcement actions. Producers and brand associations have also agreed to develop a code of conduct which was discussed at the High Level Forum for a Better Functioning Food Supply Chain on 3 October 2017.