Can the name of an alcoholic beverage be misleading? | In Principle

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Can the name of an alcoholic beverage be misleading?

Alongside the trademark, the label of a product must also identify the product itself, so that consumers know what type of product they are being offered. But in the European Union alone, there may be a dozen or more legal definitions of certain alcoholic beverages, such as cider or perry. This means that the qualitative requirements differ across various member states, presenting a huge challenge for producers, particularly when the EU policy agenda has taken up the fight against double standards for foods offered in different parts of the EU.

Laborious unification of regulations

Uniform standards for the alcoholic beverage industry primarily involve labelling of products (as set forth in the EU’s Food Information Regulation (1169/2011)). These regulations are due for revision so that producers of alcoholic beverages containing more than 1.2% alcohol are also covered by the obligation to list the ingredients of the product on the label and provide information on the energy value of the product. (We reported on the debate about these changes here.)

Meanwhile, the European Union lacks harmonised rules for classification of alcoholic beverages. Such regulations continue to function at the national level. In Poland, for example, there is the Wine Act (the Act on Production, Bottling and Trading of Wine Products and Organisation of the Wine Market of 12 May 2011). Art. 3(1)(q) of the Wine Act includes a definition of “cider” as a beverage containing 1.2–8.5% alcohol by volume, obtained from alcoholic fermentation of cider must (nastaw), without added alcohol but with the possibility of sweetening with one or more substances or adding fresh or condensed apple juice. The Wine Act also lays down requirements for cider must and the minimum contents of apple juice in the must. In other EU countries, there are different requirements, e.g. concerning the minimum apple juice content and the possibility of using additives such as colouring or flavouring agents (which is permitted for example in Slovakia).

One name, many products

Under the principle of the free flow of goods within the EU, a product legally marketed in one member state may be sold on other EU markets even if it does not comply with local regulatory requirements. Consequently, under Art. 17(2) of the Food Information Regulation, a food may be marketed in other member states using the name under which the product was legally manufactured and marketed in the member state of production.

Thus, if a product meets the regulatory requirements in the member state of production, it can be sold in other EU markets under the same name as in the member state of production. The result is that varying products may be offered on any EU market under the same generic name (such as cider or perry).

This issue is particularly important with respect to names whose use is regulated by law. In the widely discussed case Tofu Town (C-422-16), decided in June 2017, the Court of Justice held that if a product has a legal definition (e.g. cheese, milk or butter under Community regulations), the name cannot be used for a product whose composition does not meet the definition, even if the term is expanded upon by clarifying or descriptive terms indicating the difference (for example, in that case, “tofu butter”). While that judgment involved names regulated at the EU level, it stresses the important of proper classification of products and indicates that providing additional information about the composition of the product will not always adequately protect consumers against confusion.

Moreover, since publication of the Commission Notice on the application of EU food and consumer protection law to issues of Dual Quality of products—the specific case of food (2017/C 327/01), it has become clear that in light of the nature of foods and their impact on consumer health, a difficult (but not impossible) battle has begun against all manifestations of unjustified differentiation in quality of foods offered on EU markets.

The consumer has a right to know

To protect consumers against the risk of confusion (and thus protect the producer against the risk of sanctions for unlawful or false labelling of products), the producer should verify that it is safe to use the same name for products. If not, it should consider applying either of two solutions meeting consumers’ reasonable expectations with respect to their right to accurate information about the product.

  • Option 1: original name (as in the country of production) plus additional information

This solution should be used when the true nature of the food can be identified and it can be distinguished from the food it might be confused with. It involves supplementing the name of the food with additional descriptive information next to the name of the food. The additional information should indicate the relevant differences, for example that the product has been flavoured or contains fruit that would not be permissible under national law.

  • Option 2: name different from the original name

If option 1 will not suffice to ensure that buyers in the member state where the food is sold obtain accurate information, a name different from that used in the country of production should be considered. This is a radical solution, however, and should be used only in cases where the qualitative differences between the products are so great that merely providing additional information about the product would be inadequate. Typically this approach results in the use of long descriptive names that are not very appealing from a marketing perspective but do not include the additional information that would be required under option 1.

Joanna Krakowiak, legal adviser, Life Science & Regulatory practice, M&A and Corporate practice, Wardyński & Partners