The German Federal Constitutional Court (Bundesverfassungsgericht, "BVerfG") has handed down a momentous decision for business operators selling food and feed within Germany: From now on, they have to face official publications of food and feed law violations (again), although there are still some remaining legal uncertainties
More than 5 years ago, the incorporation of a new paragraph in Section 40 of the German Food and Feed Act (Lebensmittel- und Futtermittelgesetzbuch, "LFGB") caused one of the big outcries in German food law history:
The legislator added Paragraph 1a to Sec. 40 LFGB, which obliges competent national authorities to inform the public by stating the name of the food or feed, and the name of the food or feed business under whose name or company the food or feed has been manufactured or treated or has been put on the market in either cases of "reasonable grounds for suspecting" that food and feed companies exceed any statutory limit values or contravene with all other provisions within the LFGB's scope of application that aim for consumers' protection against health risks or misleading practices, or for compliance with hygienic standards and in which a fine of at least an amount of (only) €350 is therefore expected to be imposed.
Soon after the new provision entered into force, several German Federal States (Bundesländer) had already set up official websites for enabling the placement of information about infringements of food and feed law requirements for the general public. It was not long before the first entries were made into this new "public pillory". However, those entries predominantly related to smaller companies or culinary establishments. These were often hit out of the blue by the newly established provisions having failed to seek legal support in time to defend themselves against the publication respectively the objection as such and any possible fine associated with it.
While there is no uniform catalogue of fines available for food and feed law infringements in Germany, the imposition and fixing of a fine is within a legally defined framework at the sole discretion of the competent authority. Depending on the type of infringement an administrative offence may be punished by fines up to €20,000, €50,000 or even €100,000 (cf. Sec. 60(5) LFGB). You can take from these figures that it is rather the rule than the exemption to impose a higher fine than €350 on food and feed business operators in case of any infringement of the law. Apart from that it was already sufficient that such an amount was only "expected to be imposed" to trigger an entry in the public information register of the competent authorities. In contrast, all other value thresholds relevant for consequences arising out of an administrative offence (e.g. entry of the infringement in the commercial central register in case of a higher fine than €200) would require a legally binding fine notice.
The aspects that made the German food law scene stumble the most was that the publication of such infringements (1) did not even require an acute risk for consumers' health; and (2) were not subject to the discretion of the authorities but must be performed ex officio.
The questionable provision was, however, eventually only executed for a short period of time in the German Bundesländer. This is due to the fact that some German Higher Administrative Courts (Oberverwaltungsgerichte) as well as state governments have expressed doubts about whether Sec. 40(1a) LFGB is consistent with German constitutional law, especially with regard to the constitutional right of Occupational Freedom [Art. 12 of the German Constitution (Grundgesetz, "GG"]. The state government of Lower Saxony (Niedersachsen) even went one step further and filed an application for judicial review with the German Federal Constitutional Court in 2013. On 4 May 2018, the BVerfG finally published its decision on the case which is rather surprising for all critical voices.
Key points stressed by the BVerfG
The BVerfG declares that Sec. 40(1a) LFGB indeed interferes with Art. 12 GG (Right of Occupational Freedom). This is because the intended publications aim directly at the market conditions of individual businesses, influence consumer behaviour and thus change the market and competition situation of the business operator in question to its economic disadvantage.
This interference with Art. 12 GG can only be justified to a limited extend because Sec. 40(1a) LFGB does not fully comply with the requirements of the principle of proportionality: Although the provision in Sec. 40 (1a) LFGB pursues a legitimate goal (i.e. to enforce food and feed law effectively and to provide the consumer with a sufficient basis to form a self-dependent decision) and is suitable to meet this legitimate goal, the provision is not fully adequate/proportional.
This is due to the fact that the law does not provide any time restriction concerning the official publications; over time, the official publication becomes less and less proportional with regard to the legitimate goals of the provision. The longer such information is published, the bigger the discrepancy between the increasing strains on the business operator on the one hand, and the decreasing value of the information for the consumer on the other hand. The objective value of the disclosed information decreases the longer time has passed since the infringing act, becoming more and more difficult to draw conclusions to the current situation of the affected business operator. Thus, under constitutional law, it is necessary to adopt a provision including a time limit regarding publications.
Aside from this, Sec. 40(1a) LFGB is adequate/proportional as long as it is applied in a manner that ensures conformity with the German Constitution. This might be achieved by applying the provision in such a way that official publications are only made about "significant" infringements of the law. In addition, where infringements have already been rectified, the competent authorities must now immediately inform the public whether and when the infringement has been rectified in order to ensure the accuracy of the information and to avoid misconceptions on the part of consumers.
According to the BVerfG, a time limit for publications according to Sec. 40(1a) LFGB must now be determined by the German Federal legislator. It is not sufficient to specify such a restriction via judicial decisions and/or administrative practice. Such a time limit shall be fixed by 30 April 2019 at the latest. Apart from the aforementioned, Sec. 40(1a) LFGB shall continue to apply in a manner that conforms with the constitution until such time limits are set.
This decision has a far-reaching impact on both food and feed business operators doing business in Germany as well as competent national authorities. From now on, Sec. 40(1a) LFGB "suddenly" has to be taken seriously again since the BVerfG explicitly addresses its validity. Therefore, affected businesses will be confronted with publicly available information on respective food and feed law infringements in the very near future - which might be severely harmful for their reputation and business activities. Also, authorities publishing information according to Sec. 40(1a) LFGB will most likely be faced with legal proceeding again in the future, e.g. if a business operator argues its infringement is not "severe" enough to justify such a publication. Obviously, the struggle has not been settled by the BVerfG - the show will go on!
The judgement is also highly interesting for non-German food or feed business operators if they market their products within Germany. The mere fact that they place their products on the German market is, of course, sufficient ground for German authorities to control and assess whether a product complies with the statutory limit values and other relevant food and feed law. If an infringement is detected, a non-German business might soon enough find its product name amongst the publicly available list. Therefore, especially under aspects of saving one's good reputation, it is more important than ever to fully comply with German food and feed laws and, of course, obtain legal advice in good time in case of receiving objections.