The European Commission is investigating whether the UK's 'traffic light' food labelling is compatible with EU law, following Italy's complaint that it is an illegal bar to free trade. The investigation highlights the tensions that can exist between food policy in some member states and the wider trade interests of the EU.

The proposed voluntary labelling scheme aims to show consumers how much fat, salt and sugar food products contain and their contribution to recommended daily amounts. The scheme was introduced last summer by the Food Standards Agency. However, Italy has complained that, by backing the scheme, the UK Department of Health has effectively made the scheme mandatory.

In February, the European Commission released a statement saying the scheme had "triggered vivid reactions" and that it had launched a preliminary investigation into its compatibility with EU rules on free movement of goods.

Under EU free movement rules, a country can introduce trade restrictions if they are necessary to protect health or the environment, but trade restrictions must be applied equally to domestic goods and imports from other EU countries.

The European Commission is set to meet on 10 July to make an initial decision on the matter, following which it may take formal steps to seek to block the scheme in the UK – which could end up in the European Court of Justice. At a time when the UK's membership in the EU is high on the political agenda, cases like this may be particularly controversial, but they do highlight the political challenges the UK is facing.