Assessment of Latvian Measures on Food Products and Food Supplements, Study notes of European Union law

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Latvia has decided to ban the use of the word ‘light’ or ‘lite’ on the packaging or name of food products because consumers might be led to believe that they are low in fat. Another Latvian law prohibits all forms of advertising of food supplements other than at the point of sale. According to the government, food supplements serve no purpose that cannot be achieved through a healthy diet. The European Commission is assessing whether these two measures comply with EU law. You are the official in charge of the file. Please write your report. Answer There are two Latvian measures to be assessed for a breach of free movement of goods and possible justifications for it. The two measures set out by the Latvian government are (a) the use of the word ‘light’ or ‘lite’ on the packaging or name of food products are banned and (b) all forms of advertising of food supplements other than at the point of sale is prohibited. On the facts, food products or food supplements are indeed goods as it is ostensibly of monetary value and can be the object of commercial transaction (Commission v Italy (Art Treasures). As such, EC can rely on the provision contained in Article 34. On the facts, the two measures set out by the Latvian government are (a) the banning of the use of the word ‘light’ or ‘lite’ on the packaging or name of food products (b) all forms of advertising of food supplements other than at the point of sale is prohibited are state measures as it is imposed by the Latvia government and is an indistinctly applicable measure as it applies to both domestic and imported goods (Cassis) Dassonville held that “all trading rules enacted by Member States that are capable of hindering, directly or indirectly, actually or potentially, intra- Union trade are to be considered as measures having an effect equivalent to qualitative restrictions”. Applying the Dassonville formula, it would appear that such measures laid down by Latvia are MEQR hence violate Article 34 because it has created difficulties for foreign traders and such kind of prohibitions impedes market access. In the case of Smanor , French regulation limits the use of the term "yogurt" to only fresh produce only, therefore frozen yogurt was renamed "deep-frozen fermented milk.". The European Court of Justice ruled that Article 34 had been violated because "it may nonetheless make the marketing [of imported frozen yogurt more difficult and thus impede, at least indirectly, trade between Member States". In analogy, banning the words “light” or ‘lite’ on the packaging or name of food products may make the marketing of imported food items more difficult and impede trade between member states. Both the measures in question are indistinctly applicable because although they apply to both local and imported products in law however, in practice it places a heavier burden on the

imported goods. Latvia may seek to defend its measure by relying on the Keck exception, Article 36 and the extended list of mandatory requirements under Cassis de Dijon. The former rule which bans the use of words ‘light’ or ‘lite’ on the packaging or name of food products is a measure which affects the product itself hence the keck exception cannot apply. If so, Latvia would use the public health derogation laid down in Article 36 to justify the measure. Latvia will claim that the measure is enacted for the purposes of protecting the health of its citizens which “ranks foremost” among the list of derogations in Article 36 public health derogation to justify the measure in question. Germans would argue that the measure was passed to defend their people' health, which "ranks foremost" on the list of Article 36 TFEU delegations ( Rosengren ). Additionally, the Germans believe that it is up to MS to choose the level of protection they desire to provide its residents (Rosengren). Germany has the burden of establishing the derogation Commission v. Italy (Caffeine ). There must be real danger to public health and not just a sham trade restriction, for this exemption to be valid ( Commission v. United Kingdom (Re Imports of Poultry Meat ). EC is advised that recognized scientific evidence is required as per Toolex Alpha. In Greenham and Abel , the CJ held that it would be far more willing to allow the justification if the Member State could point to reputable international scientific research to back up its claims. The facts do not provide any research/data of scientific research to back Latvia claims. The Court in Commission v Netherland said that the proper application of the precautionary principle requires (a) the identification of the potentially negative consequences for health , (b) a comprehensive assessment of the risk for health based on the most reliable scientific data available and the most recent results of international research and (c) where data on the existence or extent of the alleged risk is insufficient, inconclusive or imprecise, but there is a likelihood of real harm ( Sandoz ). On the facts, Latvia bans the use of the word 'light' or 'lite' on the packaging or name of the food products because consumers might be led to believe that the food is low in fact. The state also banned all forms of advertising of food supplements other than at the point of sale reason being that food supplements serve no purpose that cannot be achieved through a healthy diet. Latvia bears the burden of proof to show that there is a real and genuine health risk by adducing scientific evidence or empirical research in order to rely on said justification. Alternatively, Latvia may rely on the extended list of mandatory requirements per Cassis that could help to justify the measure. On the facts, Latvia will be claiming that such a ban would be in the interest of consumer protection. In relation to the interest of consumer protection, following Walter Rau , it is often not justified but it was successfully invoked in Robertson.

However in Commission v Germany , the national measure failed on the mandatory requirement of consumer protection as the measure was not in line with the principle of proportionality. In Walter Rau, Belgian statute required all margarine in Belgium to be sold in cubic packages to differentiate it from butter. Although this law was addressed to all, it had the practical effect of stopping imports which were differently packaged. The CJ held that although the measure was for protection of consumers, the measure was disproportionate as there were less intrusive measures available to achieve the desired objective such as labeling the product. It could be said that the protection of consumers from being led to believe that are low in fat is proportionate to the measure ie. Ban the use of the word ‘light’ or ‘lite’ on the packaging or name of food products is justified. Nevertheless, could Latvia employ other less restrictive means as opposed to prohibiting all forms of advertising of food supplements other than at the point of sale to achieve the overriding interest? The CJ stated in Kerk that Article 34 TFEU “will not be infringed by national rules relating to certain selling arrangements that apply in the same manner, both in law and in fact, to all traders within the national territory”. Such a selling arrangement fell outside Article 34 TFEU altogether and thus did not need to be justified. The Latvia prohibition on all forms of advertising of food supplements other than at the point of sale is a selling arrangement as it does not impose or require changes to be made to the product. On the other hand, the packaging requirement could be considered as product requirement and hence within Art 34 Thus Latvia may wish to rely on it and may do so if they can satisfy 2 conditions. The first condition is that the measure must apply to all relevant traders in the territory. On the facts, it is satisfied as it appears that the measure applies to both domestic and imported manufacturers. Secondly, the measure must affect the traders in the same manner, in law and in fact. On the facts, the measure would equally apply in law however, greater consideration must be given to determine whether it would apply the same in fact. In Agostini the CJ stated that “ it cannot be excluded that an outright ban, applying in one Member state, of a type of promotion for a product which is lawfully sold there might have a greater impact on the product of other member states.” Hence a total blanket ban on all types of advertisement may not be justified at all cost. As observed by AG Jacobs in Leclerc- Sipleic , advertising is crucial for market access. This is because imposing restrictions on how the product may be marketed will affect an importer more than a domestic manufacturer. Consumers are already aware of local products but the foreign product requires marketing to enter into the host market and make the product known to the general public as was held in Gourmet International Product. Such restriction in advertisement will place an importer and a domestic player on unequal footing and thus the measure does not have the same effect in

fact. For food supplement shops not established in Latvia, the internet provides a more significant way to gain direct access to the Latvia market. A prohibition which has a greater impact on supplement shops established outside Latvia territory could impede access to the market for products from other Member States more than it impedes access for domestic products ( Doc Morris ). Thus, Latvia would not be able to rely on the selling arrangement exception lead down in Kick.