Regulation of the way we produce, market and consume food has always been a subject of lively debate. However, over the past few years this debate has intensified in the EU. Companies, industry groups, health and consumer groups, environmental groups and scientists are competing to have their voices heard in the myriad debates on European food policy. These debate range from discussions on the science behind health claims (and how these benefits can be communicated), to the amount of information consumers need, to the way that we produce (and dispose of) our food. New production techniques (such as cloning and the use of GMOs and novel foods) are the subject of close scrutiny. Anticompetitive behaviour is under the spotlight. Obesity, especially among children, is a major concern. These issues are part of an unprecedented wave of political and legislative activity as the EU attempts to address the concerns expressed by citizens and civil society. This Burson-Marsteller Insight looks at some of the items on the EU’s food policy agenda and their potential impact on industry and consumers, bringing together in a single summary the key issues in this increasingly controversial area of policy.
Five years after the entry into force of the Regulation on nutrition and health claims, debate still rages about how the law is interpreted and implemented.
disease risk reduction claims (Article 14)
claims on children’s health (Article 14)
Assessments of individual health claims has been carried out by the European Food Safety Authority (EFSA) since 2007, leading to eventual approval by the European Commission of 15 claims (see box, left). In parallel, EFSA has assessed the science behind more than 4,000 generic claims following a preassessment of more that 44,000 claims by member states.
It was a long, tortuous process before EFSA could finalise the claim based on new science assessments (in mid-2011) and (Article 13.5) the Commission, in December 2011, could finally adopted a list of 222 permitted ‘generic’ claims (Article 13.1 claims). The list, adopted almost two years after the deadline established by the Regulation, was subject to intense scrutiny by the European Parliament, which eventually indicated its wish not to block it. It was not the adoption of a permitted list of claims which raised concerns among many MEPs and other stakeholders; instead, criticisms have centred on two key points: the large number of claims that are to be included in a register of rejected claims; and the scientific assessment process, which is considered by many as too rigid and disproportionate. Despite the Parliament’s decision not to veto, 2012 is likely be marked by a heated debate on the interpretation and implementation of Regulation itself. In a few months’ time, the European Ombudsman will deliver his verdict on the methodology used to assess health claims (following a complaint filed by EPHM, a food supplement trade group). The Parliament also seems set to request a study looking at the impact of the Regulation; meanwhile the Commission will also be working on guidance on the use of permitted claims (for example,
the flexibility of wording of a claim). Whatever happens, it is clear that the Claims Regulation will continue to excite debate. The food industry, as well as health and consumer groups, will call for improvements to the legislation when the Commission’s report on the situation and impact of the Regulation on dietary choices will be published. Under the terms of the Regulation, this report is due to be published by January 2013. However, it is difficult to see how the Commission can report on legislation that, half a decade on, is still some way from being implemented. Some MEPs (especially in the centre-right EPP Group) have called for a wholesale revision of the law.
In February 2012, the Parliament made full use of its power of scrutiny and blocked a Commission proposal to authorise a ‘now contains 15% less fat/salt/sugar’ nutrition claim. MEPs argued against allowing a claim that was seen as misleading and confusing (for example, a product whose sugar content had been reduced from 30g to 25g could bear a claim, but a competing product with 20g of sugar could not). The ban was a clear win for health and consumer groups over industry. Some argue that following the decision to block this claim, the Commission may be forced to intensify its work on nutrient profiles, the establishment of which is intended to urge industry to work on further product reformulation (one of the main arguments in favour of the adoption of the ‘15% less’ claim). In June 2010, MEPs failed to support a recommendation from the Parliament’s Environment Committee to delete nutrient profiles
from the Claims Regulation. However, little progress has been made since then towards the establishment of profiles. The Commission, while continuing to confirm its full commitment to the establishment of profiles, is yet to issue a proposal - more than three years after the deadline for them to be set up. Now that the threat of a veto to the Article 13.1 list has been lifted, the Commission may recommence its work. However, there is little doubt that whatever is proposed by the Commission, it will face a strong opposition in the Parliament from those ideologically opposed to the notion of ‘telling consumers what to eat’.
Following an EU-wide review of both the general food labelling rules and nutritional labelling rules, a new Regulation on the provision of food information to consumers (PFIC) was published in October 2011. The new legislation requires mandatory 'back of pack' nutrition declarations on pre-packaged food, indicating energy value and quantities of fat, saturates, carbohydrates, proteins, sugars and salt. All of this information must appear in the same field of vision and can be repeated on ‘front of pack’. Labelling must be clear and legible and any misleading information is prohibited. A minimum font size for the mandatory information of 1.2 mm has been established to improve legibility. In addition, the new regulation extends compulsory origin labelling to pork, lamb and poultry; requires that the type of vegetable oil used in food be stated; and demands extra labelling of drinks with a high caffeine content. However, alcoholic drinks are temporarily exempted from mandatory nutrition labelling. Most of these requirements will not apply until December 2014, and nutrition labelling will become mandatory by the end of 2016. Despite this litany of new requirements, the new regulation also requires the European Commission to prepare a number of reports (possibly accompanied by further legislative proposals) and adopt measures to implement the text. A report on origin labelling for meat is expected by December 2013. One year later, the Commission must publish two further reports, one on banning or restricting trans-fats, and a second on labelling alcoholic drinks. Detailed implementing measures are expected on legibility, portion sizes, and instructions for use, as well as durability (‘use by’ dates) - an issue that could dovetail with the ongoing debate on food waste (see opposite). The Commission has already begun preparatory work on these reports. Once it sets clear objectives of what is expected, it will publish a call for tender to carry out the study. Depending on the results of the study, and the accompanying impact assessment, legislative proposals could be considered. There is no doubt that while the adoption of the Regulation itself
was a major step within the broader reform of EU food law, its implementation (and in particular upcoming regulatory steps on issues such as legibility, portion size, and instructions for use) will reignite the debate.
The European Commission proposal for a new framework for dietetic foods legislation is currently in the European Parliament awaiting the finalisation of its first reading. The debate and vote in plenary is expected in May 2012. The Danish Presidency sees the revision of the PARNUTS (Foods for Particular Nutritional Uses) legislation as one of its key food policy priorities, as so will aim to secure a first-reading agreement with the Parliament. However, a number of issues are still under debate. The Commission proposal narrows the scope of special food products down to those foods used by vulnerable groups of people - such as infants and children up to the age of three years, and people with specific medical conditions. The Commission proposes a single, positive EU list of substances that can be added to these foods, and abolishes the concept of dietetic foods. As a consequence, a number of foods are removed from the special framework set out in the current legislation. These foods include foods for low calorie diets, gluten free foods, foods for sportspeople, and foods for diabetics. The Commission’s proposal to take so many foods out of the scope of the legislation was not well received by most industry stakeholders. If removed from the scope of the dietetic foods legislation, they would have to comply with the Claims Regulation in order to make any claims on their products’ special properties. Most controversy has centred on very low calorie diet and glutenfree foods, which are threatened with exclusion from the new rules, and baby milk, which has been the subject of a longrunning, bitter battle between companies and groups who campaign for the promotion of breastfeeding. The special rules for gluten-free foods have been of a particular interest to Italy, who has tried to mobilise forces in the Council (with Germany) to maintain special rules for these gluten-free foods. (Italy has 150,000 people suffering from coeliac disease and there is greater protection of these citizens under Italian law. Once gluten-free products lose their special status, national health services would not be able to reimburse these products.) The Parliament has already raised a number of objections to the Commission’s proposal. Frédérique Ries, the Belgian Liberal rapporteur in the Environment Committee, put down 250 amendments in her report. The Committee’s final report was adopted on 28 February 2012, and leaves certain aspects open for future discussion. In the report, MEPs asked for the Commission to review, no later than July 2015, the status of sports foods within general food law. The labelling and composition of ‘growing up milks’ (also known as ’toddler milks’ or ’follow-on formula’, used for children of between one and three years) are to be assessed in a Commission report after consultation with EFSA. In addition, MEPs agreed on the need for guidelines on how to apply for health claims after their products are removed from the dietetic foods framework. BEUC, the European Consumer Organisation has expressed its opposition to most of the amendments proposed in the Parliament’s report. They believe that sports foods, gluten-free foods and very low calorie diets should not be covered by the
dietetic foods legislation, although they agree with MEPs regarding the exclusion of growing up milks. Looking at the number of issues that are still to be agreed, it would seem to be quite difficult for the Danish Presidency to secure the first reading deal on PARNUTS. Whatever happens, it is pretty sure that the industries affected by the chance, who have been sheltered somewhat from the full effects of the Claims Regulation, will face a tough time making the transition to ‘general food’ status.
Despite numerous attempts to revise the rules on novel foods legislation, the authorisation process is still managed by the 1997 Regulation. Last year’s failure by the three institutions to reach a political agreement on an updated proposal (issued by the European Commission in January 2008) resulted in a political vacuum, leaving the issue of food from the offspring of cloned animals unaddressed. While the European Parliament is calling on the Commission to produce two new separate proposals (one on novel foods and one on cloning), the Commission is reluctant to issue a new proposal until there is a resolution of the ‘cloned foods’ issue. It is certain that if the Commission proposes new novel foods legislation without a mention of cloning, the Parliament will propose amendments to include this issue. If and when a new proposal on novel foods is issued, it will probably differ very little from the provisions that were already agreed under the previous text: there had been much agreement, but the problem of dealing with ‘cloned foods’ poisoned the well. The main changes from the existing framework include a centralised procedure of authorisation of novel food, through EFSA; a better definition of nanotechnology; and specific measures on traditional foods from third countries. One additional sticking point is procedural: the controversial issue of decision-making powers in implementing the law. The Council favours implementing acts (no formal role for the Parliament, and oversight by member states of the Commission’s actions) whereas the Parliament would like to use delegated acts (which gives the Commission the power to act, and allows the Council and EP equal powers of veto, but no right to amend these acts). Where the whole discussion will lead is now unclear. For now, the industry needs to deal with the old Regulation and its accompanying problems. Cloning has opened many controversial issues and one can expect lengthy, GMO-like discussions (see below) before any proposal sees the light of day.
On 9 March the Council failed to reach political agreement on the Danish Presidency's compromise proposal regarding national restrictions on cultivation of genetically-modified organisms (GMOs). The compromise text followed a European Commission proposal, issued in July 2010 , that aimed to resolve the difficult issue of national restrictions. The proposed compromise included two options: one with the possibility of national opt-outs after EU authorisation (as
proposed by the Commission), and a second with that would allow member states to ask an applicant to restrict the geographical scope of application of a GMO prior to approval. A blocking minority of seven member states held to the traditional arguments for maintaining a common approach, citing potential fragmentation of the single market, putting at risk the credibility of EFSA assessment, the legal fragility of national measures, and compliance with World Trade Organisation rules. A compromise still seems some way off. The proposal might be revisited at the June Environment Council, but no-one should bet on a deal being reached.
Despite the existence of numerous regulatory measures aimed at ensuring consumers can make informed choices, and numerous voluntary industry initiatives, certain EU member states are taking the battle against obesity to a new level: attempting to influence consumer choices by introducing taxes on ‘unhealthy food’. Different food-related taxes have already been introduced in Austria, Denmark, Finland, France and Hungary, as well as in Switzerland. Italy, the UK and Ireland are considering the introduction of similar measures, with the latter intending to carry out a health impact assessment on the efficiency of food-related taxes. National health authorities tend to claim that such measures have a discouraging effect on the consumption of fat, salt and sugar and are therefore a useful tool to fight against obesity. However, the food industry remains fervently against these fiscal measures, claiming that they do not lead to the desired results and put some sectors of the industry at a competitive disadvantage. Fiscal policy remains a competence of member states, and so food taxes are currently not subject to specific harmonised EU laws. Nonetheless, the Commission is charged with ensuring that national taxation is in line with the general provisions of EU law notably concerning the functioning of the internal market. The Commission has been very clear that this remains a member state issue and that it does not wish to step in at this stage. But taking into account the fact that there is much cross-border trade in the food sector, these issues do have a pan-European character - and there is little doubt that the debate will continue at EU level. Some key challenges and questions remain: what are the scientific grounds for such measures? Who should bear the cost of taxation? What is the impact of such measures on cross-border trade, the quality of products, and on the viability of the food industry? Taxation seems set to become a major battleground in the years to come.
In the context of global food scarcity and rising prices - as well as calls for greater resource efficiency and awareness of the environmental impact of food production - the regulation of food waste has become a hot topic on the EU agenda. In January the European Parliament adopted a non-legislative resolution calling for action to halve food waste by 2025 and to improve access to food for the most deprived. MEPs asked the Commission to analyse the whole food chain in order to identify the reasons behind food waste and to implement a coordinated strategy, combining EU-wide and national measures, to improve the efficiency of the food supply and consumption chains, sector by sector. The resolution also raises the issue of proper labelling, packaging and types of food dates (‘sell by’, ‘use by’, ‘best before’) provided to consumers. MEPs raised the idea of making one of the upcoming years the year against food waste, an idea which was broadly welcomed by the Enterprise Commissioner, Antonio Tajani. New initiatives - and possibly changes to existing legislation - seem set to follow.
The Commission has recently established a special task force within DG Competition to examine competition within the food sector. This move comes after numerous calls to investigate restrictive practices among retailers that have been observed in a number of member states. In January 2008 the European Parliament adopted a written declaration on investing and remedying the abuse of power by large supermarkets operating in the EU. The declaration called on the Commission to investigate the impact of the concentration of supermarkets in EU on small businesses, suppliers, workers and consumers. Most antitrust enforcement action in the EU so far has been focused on food retailing and has been undertaken by national competition authorities (for example, the Austrian competition authority is currently dealing with two cartel cases, in the beer market and the sugar market; the Bulgarian consumer protection commission launched proceedings last year against supermarket chains alleged to have coordinated their commercial activities; and Italy is currently conducting a general investigation into the food sector). The Competition Commissioner, Joaquin Almunia, has acknowledged that there is a problem, but stated that there is no need for a sector enquiry. The establishment of the task force within DG Competition will definitely lead to the intensification of antitrust scrutiny of the sector, with some attention likely to be paid to whether the pricing of commodities is reflective of competitive market conditions.
Since May 2011 a number of MEPs have raised concerns about the difference in quality between the same products, sold under the same label, by multinationals operating in different EU countries. The issue of a ‘quality gap’ was first highlighted in a survey conducted by the Slovakian consumer association (financed by the European Commission representation in Slovakia).
In February the Parliament hosted an event on the issue, which concluded with a plea for further surveys to ascertain a clearer picture of the issue, as well as for companies to add labels stating which market a product is intended for. The Commission argues that the differences are not necessarily a problem: consumers are not misled about the ingredients used (as they are labelled), and it argues that ‘quality’ is too ambiguous a concept to define, so legislation would not be a solution. The industry argues that differences in formulations are due to consumer preferences and the availability of raw materials on the market. Although political action is some way off, the debate is likely to continue.
The most expensive and controversial policy sector in the EU, the Common Agricultural Policy, is currently under review. The Commission’s proposal for CAP reform is awaiting its first reading in the European Parliament. The main procedural challenge will be the tri-partite process that results from the inclusion of agriculture in the scope of the ‘ordinary legislative procedure’ - or co-decision. This is the first major CAP reform that will be addressed with the close involvement of the Parliament- a cultural challenge for some in the Commission and Council. The proposed reform tries to make EU farm policy less bureaucratic and more competitive. The main issues raised in the proposed package are direct support for farmers; market regulation; the abolition of sugar quotas; increased research and innovation; rural development; the ‘greening’ of farm policy; and the financial implications of the reform proposal. The Commission proposal increases the budget for agricultural research and development to €4.5bn as of 2014. As for the controversial system of quotas, milk quotas were already set to expire, and sugar quotas would end in 2015. In March and April the Parliament is organising workshops on individual issues to better understand stakeholders’ concerns. The final approval of different regulations and implementing acts to put the new CAP in place was initially scheduled to take place by the end of 2013. However, due to the complexity of the discussion and the introduction of the co-decision procedure for CAP, a delay in the entry into force of the CAP reform is foreseen - and it may happen as late as 2015. Currently, the Parliament is still negotiating its timetable for discussing the proposals. There is no doubt that the upcoming months will see a heated debate, with criticism of the proposal for falling short on the objectives of distributing money more fairly, improving the sector's competitiveness and promoting greener farming practices. One key point on which the debate may turn is how much the reforms enable the EU agricultural and food sectors to meet the challenges surrounding food security.