In September 2015 the Italian Government proposed a draft law that aims to reintroduce the obligation to indicate the place of production or packaging centre on all food labels.
This initiative has triggered a lively debate on the relationship between the fundamental principles of free movement of goods in the European Union (‘EU’) and the need to protect consumers and provide adequate food information.
Although the Italian proposal is at a very early stage in the legislative procedure, different opinions reveal deep splits among stakeholders. The core issue is whether the Italian proposal is in line with Regulation (EU) No 1169/2011 on food information to consumers, 11 whether it constitutes an obstacle to free movement of goods in the EU, whether it restrains competition among food producers, or whether it bolsters consumers’ rights to be aware about the origin of the food and, ultimately, about their purchase choices.
The European Legal Framework
Regulation (EU) No 1169/2011 on the provision of food information to consumers is applicable since December 2014.
This Regulation distinguishes between (i) the obligation to indicate the country of origin or of the place of provenance of the food product under the conditions set out in Article 26, and (ii) the obligation to declare the name and address of the food business operator responsible for food information.
The indication of the country of origin or place of provenance on food labels is generally voluntary. According to Article 26 of Regulation (EU) No 1169/2011, the indication of origin is mandatory only when its absence may mislead consumers as to the true country of origin or place of provenance of the food. In particular, the indication of origin becomes mandatory when the information accompanying the food or the label would otherwise imply that the food has a different country of origin or place of provenance.
Recital 29 to Regulation (EU) No 1169/2011 provides that the indication of the country of origin or of the place of provenance should be not deceptive. It should improve consumers’ understanding of the information relating to the origin of the food product, and ensure fair competition.
Article 9 sets out mandatory information that must be included on a food label. The list in Article 9 includes – inter alia – the requirement to indicate the name or business name of the responsible food operator.
Regulation (EU) No 1169/2011 is significantly different to Directive 2000/13/EC.12 Article 3 of that Directive had required the indication of the factory or packaging centre on the labels. This is no longer included in the list of mandatory particulars set out in Article 9 of Regulation (EU) No 1169/2011.
Article 39 of Regulation (EU) No 1169/2011 enables the Member States to exercise their discretion by adopting national measures requiring additional mandatory particulars for specific types or categories of foods. These measures can be justified on grounds of – inter alia - the protection of public health and the protection of consumers. If they intend to do so, Member States have to notify the European Commission the new measures and they are entitled to adopt those measures only three months after the notification, and provided the Commission does not deliver a negative opinion.
The Italian Legal Framework and the current scenario
Until Regulation (EU) No 1169/2011, Italian food labels have been regulated by Legislative Decree 27 January 1992, No 109/1992 (‘Legislative Decree No 109/1992’).13
Similar to the Regulation (EU) No 1169/2011, Legislative Decree No 109/1992 requires the country of origin or place of provenance being indicated where its absence might mislead consumers as to the country of origin or place of provenance of the food product.
As to the factory or packaging centre, Legislative Decree No 109/1992 and Regulation (EU) No 1169/2011 move in different directions insofar as the former provides for the obligation to indicate the place of production or packaging centre of the food products. 14 Failure to comply with this mandatory requirement implies the imposition of sanctions under Italian law.15
Because of the primacy of EU law over national law, following the entry into force of Regulation (EU) No 1169/2011, Italy should no longer consider the failure to indicate the factory as an administrative illegality. Accordingly, it is now up to each Italian producer to decide whether to indicate the place of production or not.
The regime set out in Regulation (EU) No 1169/2011 based on the voluntary indication of the name of the place of production has not been welcomed in Italy. Online petitions, food industry lobbies and many citizens’ campaigns have been pushing for the reintroduction of that obligation as part of the consumers’ right to make an aware purchase choice. In addition, many Italian food producers and retailers have keep indicating the place of production on a voluntary basis.
The Italian authorities has not been insensitive with respect to these initiatives. In 2014 a public consultation was launched by the Ministry of Agriculture. 90% of the 26,000 respondents sought to have the place of production or the packaging centre clearly indicated on the labels of the foodstuffs.
On 10 September 2015 the Italian Government approved the proposal for the draft of Legge di Delegazione Europea 2015 (the ‘Proposal’) that provides the main elements that should base the delegated bill (‘legge delega’) from the Italian Parliament to the Government for the implementation of Regulation (EU) No 1169/2011 into the Italian legal order. Article 4 of the Proposal aims to reintroduce the obligation to declare the factory or packaging centre on food labels. This mandatory requirement is intended to apply with respect to foodstuffs made in Italy and intended to be sold on the Italian market.
Before the final adoption of the Proposal, the Italian Government needs to obtain the opinion of the Conferenza Stato-Regioni. That being said, it is likely that the text will be put to the Italian Parliament and the normal parliamentary procedure initiated. In the meanwhile, Italy would have to notify the Proposal to the European Commission and the other Member States.
First reactions outside Italy…
Although the legislative Proposal to reintroduce the obligation to indicate the factory or packaging centre has just been launched, opinions are already divided.
On one hand, some EU stakeholders criticise the Italian initiative as being a protectionist measure that infringes the principle of free movement of goods in the EU. The claim is that the Proposal may create a competitive disadvantage to food producers established outside Italy, as it would only apply to food made and sold in Italy. In this view, a non-Italian producer seeking to sell its foodstuffs in Italy would have to change the labels so as to adapt it to the allegedly more restrictive Italian requirements. It is claimed that this is burdensome and may restrict access to the Italian market. Second, the Proposal may hinder companies’ business as they would enjoy less flexibility to switch factories in Italy, and would be forced to reveal information concerning their production strategy to competitors. Third, it is argued that the Italian Proposal may exercise influence on the consumers’ purchase choices promoting domestic products.
…And the Italian main counter arguments
Although the first comments outside Italy claim that the Proposal is an obstacle to free movement of goods, a deeper analysis shows that Italy has some arguments to demonstrate that the (re)introduction of the obligation to indicate the place of production or packaging on the labels of products made and sold in Italy is in line with Regulation (EU) No 1169/2011.
Italy has exercise the discretion enjoyed under Article 39 of Regulation (EU) No 1169/2011. This provision allows Member States to add more mandatory particulars if they are justified – inter alia – on the basis of consumer protection. First, consumers must be informed about the place where the food they purchase has been produced. Second, food business operators – especially multinational food producers – should be prevented from indicating the address of their secondary office in Italy on the labels, if the food has been made outside Italy. These are the main aims pursued by the Proposal.
From the point of view of consumers, the indication of the place of production can cover an essential function in case of a serious food emergency. If a dangerous bacterium is found in a certain production site, food safety authorities and consumers should be able to easily identify the food products that have been made in that site, and order their withdrawal from the market. Two options can be envisaged: the competent authorities could easily identify the dangerous production site thanks to the food label, or they could contact the food business operator whose name and address are indicated on the labels in order to disclose where the suspected dangerous product has been made. The first option would be more direct and efficient in order to intervene quickly and would hopefully reduce the negative consequences of the emergency.
Consumers may be interested in being informed about the production site for other reasons. They may prefer to choose a product on ground of the business policy of the producer. For instance, consumers that are sensitive to environmental issues may prefer to buy a product made by a producer producing in an environmentally friendly way. Or they may want to purchase food products made locally because the link a certain origin to quality and tradition. Or they prefer to purchase products from producers that have not delocalised production. Labels indicating the production or packaging site would thus allow consumers to make choices in line with their life- style and economical and cultural sensibility.
From the point of view of food producers, the business decision to transfer the production elsewhere depends on micro and macro-economic factors that are (supposed to be) legitimate. However, consumers have the same legitimate interest to know whether the foods that they have always associated with a certain geographical area are still produced there, or not. This is often an important information for consumer choices. The place of production cannot be compared to a patent or a secret food recipe that must be reserved so as to protect intellectual property.
In addition, and in contrast to the views of opponents of the Proposal, requiring Italian producers or retailers to indicate the place of production does not necessarily imply an unlawful competitive advantage. Since consumers may have a number of different expectations relating to different foodstuffs (i.e. health, environment, origin), they will thus need to be informed about what is on the shelves so as to make choices that better match those expectations. Indicating the place of production may induce competition between producers in providing better information in the view to satisfy consumers' expectations. In this sense, labels indicating the production or packaging site have the purpose of prompting a higher standard of competition in a fair and transparent manner.
In light of this brief analysis, it can be strongly argued that the Proposal does not infringe Regulation (EU) No 1169/2011 and the principle of free movement of goods in the EU for a number of reasons.
Italy has chosen to fill a space left empty by the EU legislator. It wishes to provide that a certain type of information is provided and is using Article 39 of Regulation (EU) No 1169/2011 as the procedural vehicle to achieve this. Italy has chosen to do so in a way that should improve consumer health and choice in a transparent fashion. The Proposal improves the quality of products and consumer choice. The qualities improved are not necessary qualities inherent in the product itself but qualities in relation to the environment, in relation to sustainability, in relation to consumer sensibilities.