Origin-labelling legislation in the EU: striking the balance between free movement and consumer protection

Consumers increasingly want access to information regarding the origin of products. Buying local is en vogue, offering a sense of greater certainty as to the quality and safety of products, the hope of a lower carbon footprint and a way to support local communities. This trend, however legitimate, also provides an opportunity for States to promote their domestic production – a temptation which is only getting stronger with the current economic crisis and the need to rescue national economies. In this context, origin-labelling can be used as a tool to guide consumers towards local purchases. In this post, Vincent Delhomme shows how EU law currently prevents Member States from imposing wide ranging origin-labelling requirements on products and argues, should any reform take place, for preserving the overall spirit of this legal framework.

EU law is naturally sceptical towards rules that can facilitate or even foster ‘patriotic’ consumption. At the same time, it also champions a high level of consumer protection and transparency. There is little doubt that origin plays an important role in consumer choice, in particular for food. The 2019 Eurobarometer on food safety revealed for instance that 53% of polled Europeans considered it to be a decisive factor when buying food. Enhancing origin-labelling requirements would hence seem to be the right course of action. But does the EU want to give more opportunity to consumers (and Member States) to assert their ‘gastro-nationalism’? Therein lies the crux of the problem.

The current legal framework severely limits Member States’ possibility to enact mandatory origin-labelling rules and largely leaves it to the discretion of economic operators. Regulation 1169/2011 on the provision of food information to consumers imposes origin-labelling obligations in a limited number of cases (see Art. 26). The Groupe Lactalis case (2021), in which French provisions regarding the origin-labelling of milk were ultimately annulled by France’s supreme administrative jurisdiction, is a prime example of the limits set by the Regulation, under which no origin-labelling requirements can be enacted without the existence of a proven link between certain qualities of a food and its origin It was abundantly criticised for this reason. In the framework of the Farm to Fork strategy, the European Commission is now considering a reform of the applicable rules that would extend the mandatory indication of origin to more categories of foods.

The present piece argues for caution. If any reform is to happen, it will have to navigate between these contradictory interests: enhancing transparency for consumers while safeguarding the integrity and the functioning of the internal market. Overall, the current equilibrium as it exists in the law should be maintained.

Origin-labelling in the Court of Justice’s case law: safeguarding the internal market

Early on, the Court of Justice signalled its opposition to national legislation requiring the indication of origin for products (see case 113/80, Commission v Ireland; case 207/83, Commission v United Kingdom). Thus doing, it carved out an exception to its general stance that providing information, through labelling especially, is the best way to reconcile the interests of free movement and those of consumers, doing away with national rules on the composition of products (see, among many others, case 120/78, Cassis de Dijon; case 178/84, Commission v Germany; case 90/86, Zoni).

This ‘information paradigm’, still largely informing the Court’s case law and the EU acquis, is based on two main premises. It is grounded first in the belief, not fully supported by behavioural evidence, that the ‘average consumer who is reasonably well-informed and reasonably observant and circumspect’ (Case C-210/96, Gut Springenheide, para 31) reads labels, understand the information thus provided and acts in consideration. Second, it is based on a vision of the internal market as a dynamic place where consumer conceptions and habits evolve (see e.g. Commission v Germany, para 32). Member States’ rules must therefore not ‘crystallize given consumer habits so as to consolidate an advantage acquired by national industries concerned to comply with them’ (Case 170/78, Commission v United Kingdom, para 14).

Interestingly enough, while the second tenet holds true for origin labelling, the first one finds itself rejected. The idea of a rational and empowered individual judging products on their objective characteristics gives way in the case law to a more pessimistic and, one may say, paternalistic view of the consumer. According to the Court in Commission v UK, ‘the purpose of indications of origin or origin-marking is to enable consumers to distinguish between domestic and imported products and […] this enables them to assert any prejudices which they may have against foreign products’ (para 17). Such requirement not only constitutes an additional burden that must be complied with by goods lawfully produced in another Member State, ‘it also has the effect of slowing down economic interpenetration in the community’ (Case 207/83, Commission v UK, para 17).

In contrast with the rest of its case law, the Court opposes the provision of truthful information to consumers for the sake of the internal market. The argument is quite radical since it leads the Court to consider that consumers need not be aware that goods sold as souvenirs are not produced in the country whose origin it is supposed to be reminiscent of (Commission v Ireland, para 15).  Overall, the idea is that ‘it is unnecessary for a purchaser to know whether or not a product is of a particular origin, unless such origin implies a certain quality, basic materials or process of manufacture or a particular place in the folklore or tradition of the region in question’ Commission v Ireland, para 13).

EU secondary law on food and the Groupe Lactalis case

This suspicion towards origin labelling requirements found its way into EU legislation on food. Leaving aside the rules applicable to specific categories of products (fruits and vegetables, fish, certain meats and alcoholic beverages, etc.) and to geographical indications (PDO, PGO), origin-labelling is only mandatory in particular cases where consumers risk being misled (Regulation 1169/2011, Article 26). Member States are generally prevented from imposing origin-labelling requirements on foods (Art. 39).

Regulation 1169/2011 leaves open the possibility for Member States to introduce supplementary measures requiring the mandatory indication of origin if justified on objective grounds and ‘where there is a proven link between certain qualities of the food and its origin or provenance’. These measures must be notified to the Commission, accompanied with ‘evidence that the majority of consumers attach significant value to the provision of that information’ (Art. 39).

An increasing number of Member States try to make use of this exception (see the report by the EPRS). In 2016, France adopted a decree on the mandatory origin-labelling of milk and meat, which required milk to indicate a minima its ‘EU’ or ‘non-EU’ origin. The dairy giant Lactalis sought the annulment of the decree for breach of Regulation 1169/2011. This led the French Conseil d’Etat to send a reference for a preliminary ruling to the Court of Justice, seeking interpretation of Article 26 and 39 of the Regulation.

In its Groupe Lactalis judgement (C-485/18), delivered on 1^st October 2020, the Court confirmed that two cumulative and successive conditions must be met for Member States to adopt rules on mandatory origin-labelling: the existence of a ‘proven link between certain qualities of the food and its origin or provenance’ and ‘evidence that the majority of consumers attach significant value to the provision of that information’ (para 39). Such rules cannot be adopted ‘on the sole basis of the subjective association that a majority of the consumers make between the origin or provenance of those foods and certain qualities of those foods’ (para 46). With this rather straightforward interpretation of Article 39 of the Regulation, the Court reaffirms its long-standing position: consumers’ expectation to know the provenance of food, whether ill- or well-founded, is not a sufficient ground to require operators to disclose that information.

In its subsequent decision, delivered on 10^th March this year, the Conseil d’Etat annulled the provisions on milk contained in the French decree, noting that the French government had solely based itself on the interests of consumers, acknowledging that no objective link existed between the properties of milk and its geographical origin (para 5).

Managing contradictory interests: the future of origin-labelling in the EU

Origin-labelling pits against one another two legitimate and powerful interests. For anyone taking rights and autonomy seriously, it is hard to subscribe to the position that consumers should not be provided with truthful information for fear of the use that they would make of it. For a variety of ethical, environmental, cultural and, yes sometimes, parochial reasons, consumers want to know the origin of the products they buy, food especially.

At the same time, because consumers want to have access to a certain information does not automatically mean that an obligation should be put on another party to disclose it. There is always an issue of appropriateness and of public policy.

An EU market fragmented along national lines, where consumers would actively favour their own products with the support of their governments, is not an appealing prospect. This would not only go against the very idea of a single market but also hurt consumers in the long term if it translates into diminished choices and trading opportunities. The impact of the origin of food on the environment should also not be overestimated. International transportation emissions only account for approximately 6% of the emissions of greenhouse gases originating from EU diets.

Information on origin is not equally relevant for all products. For some, like wine or other agricultural products, there is an undeniable link between quality and origin. For many others, like most processed foods, the place of production says very little or nothing of their characteristics. The costs entailed by origin-labelling obligations also differ in function of the complexity of the supply chain. This complexity can also sometimes be a source of deception for consumers. How should mushrooms whose production process mostly take place in one Member State but harvested in another be labelled (see C-686/17 in this regard)?

Caught between these various and contradictory interests, the European Commission is currently considering amending EU rules on origin labelling, as part of a broader effort to promote healthier and more sustainable diets. Rather than altering the overall spirit of the legislation, tabled changes would see the extension of the mandatory indication of origin to more meat products and new categories of foodstuffs: milk, rice, durum wheat used in pasta, potatoes and tomato used in certain tomato products. We are thus far from a massive overhaul of the EU framework.

This is a sensible approach. The EU should not introduce any origin-labelling obligation across the board but rather continue to carefully monitor Member States’ initiatives in this regard. It should only introduce such obligations whenever the consumer interest is particularly strong and there is an objective basis to it. For the rest, companies are free to provide that information on a voluntary basis and consumers are also free to reward the most transparent ones through their choices.

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