Dominating headlines all over Europe two years ago, the horse meat scandal was only one of the occurrences indicating the strong need for immediate and increased regulative measures in the area of food fraud. Steps have indeed been outlined (with some already implemented) by the European Commission ("EC"), in order to reduce shortcomings along the European food chain and combat fraudulent practices in Member States.

In Slovenia, fines for committing food fraud – the term not yet being harmoniously defined within Europe - increased three-fold in the past year. This year, new initiatives for detecting and preventing food fraud have been introduced as one of the EC's anticipated measures.

Current legal framework and definition of food fraud on EU level

The concept of a food fraud is a relatively new and on-going phenomenon evolving over the past few years as a result of several food incidents. While legislation pertaining to food safety is very exhaustive, a comprehensive legal framework particularly applicable to food fraud is in place neither on the EU level, nor on a Slovenian one. The general principles on the prohibition on misleading consumers can be relevant only to a certain extent in the fight against food fraud. Although the fields of food safety and food fraud are clearly related, the latter should undoubtedly be subject to its own separate and clear(er) regulations, since fraudulent behavior does not necessarily imply the unsafe consumption of food.

Based on the current legislative setup of the two main regulations, food business operators are to strictly comply with food law requirements when placing products on the market, and may not deceive consumers in any way. First, Regulation (EU) 1169/2011 on the provision of food information to consumers sets out clear rules on labeling, stating that product labels should not contain anything which might mislead the consumer. Second, Regulation (EC) 178/2002, laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety ("Regulation") inter alia stipulates that food law shall aim at the prevention of (i) fraudulent or deceptive practices, (ii) the adulteration of food, and (iii) any other practices which may mislead the consumer.

To date, however, no legally binding (and uniform) definition of the term food fraud has been established. Taken together, however, various definitions infer that the key features for describing food fraud, are (i) non-compliance with existing food law legislation, (ii) intentional misleading of the consumer and (iii) financial gain. The collective understanding thus is that food fraud is deemed committed when food business operators place products on the market with the intention to deceive consumers, and for economic gain. Further criteria have not been set. All in all, given the lack of a concrete definition and detailed regulation, one may say food fraud remains insufficiently regulated.

The EC's so-called “5-point Action plan”, announced in March 2013, required several steps to be made, the majority of which have already taken place. These include the establishment of an EU Food Fraud Network to strengthen cross-border cooperation in combatting food fraud, and which will in the second half of 2015, be equipped with a dedicated IT tool for the rapid exchange of information on potential trans-boundary food fraud cases. Regarding official control and penalties, the EU Action plan proposed, inter alia, that member states conduct mandatory unannounced official controls in order to target food fraud, and increase the frequency and severity of fines to have a deterrent effect and reduce the financial incentive arising from the food fraud. Slovenia accomplished this aim through the Agricultural Act ("AA") in 2014.

National regulations and sanctions related to food frauds

Slovenia did not go further into developing its own definition of a food fraud, thereby (implicitly) allowing broad interpretation possibilities of the term. For more specificity, one may mainly rely on consumer protection legislation, which provides legal definitions of misleading advertising and unfair commercial practices that could be interpreted and applied in such a way as to also cover food fraud.

Fines could thus be imposed either as a result of consumer protection breaches (up to EUR 40,000 per breach by a legal entity and EUR 4,000 on the responsible person), or on the basis of the AA, which in 2014 implemented three-times higher fines for food fraud, amounting to a maximum of EUR 18,000 per breach by a legal person (and EUR 1,800 on the responsible person) for noncompliance with the Regulation. The latter could be imposed for the failure to provide consumers with the proper basis to make a choice in relation to the food they consume, for not preventing fraudulent or deceptive procedures, for counterfeiting of food or for any other practices that may mislead the consumer. Slovenia is, in this respect, apparently one of the few member States to (also) use the Regulation as a direct legal basis for imposing sanctions.

Slovenian initiatives to combat food frauds move forward

Last year’s amended AA also introduced a "Guardian of relations in the food supply chain" (Varuh odnosov v verigi preskrbe s hrano), a new institute that will generally seek to improve the functioning of the food supply chain. The Guardian should, inter alia, monitor the behavior of food chain stakeholders, publish examples of fair/good as well as of unfair/bad business practices, and inform the public on its findings. Further, according to the work program of the competent authorities for 2015, a special supervision group will be established within the competent inspectorial authority to discover and prevent food fraud. In addition to regular control tasks, specific inspections will be carried out to detect fraudulent practices (e.g. verifying of good/fair practices in supplying the end consumer). The planned supervision will promote cross-agency cooperation and will operate as an interdisciplinary way of mobilizing and enlisting other law enforcement bodies such as police and customs in the effort.

Pursuant to these measures, and actions yet to be launched, the national enforcement authorities will monitor and verify products more regularly with the aim to successfully tackle the issue of food fraud that is still rampantly frequent amongst member states. Food business operators must strictly abide by the existing food law requirements and market their products in a fair manner, so that consumers do not become victims of food fraud through misleading practices.

To conclude: the poorly regulated area of food fraud is a double-edged sword. The unfortunate consequence of not having detailed regulations/legal definitions is that authorities have vast discretion to interpret commercial behavior as “fraudulent conduct”. On the other hand, the lack of clear regulations severely hinders those same authorities in lawfully imposing sanctions on law breakers. This translates into food business operators being left to the mercy of the case-by-case assessments whether food fraud has been committed, or, as more likely is the case, whether consumer protection breaches (in a broader sense) have been identified.