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New trends in food law

An interview with Prof. Małgorzata Korzycka of the Department of Agricultural Law at the Faculty of Law and Administration of the University of Warsaw on barriers to free movement of goods on the EU food market, and the growing role of private food law.

Joanna Krakowiak: How would you assess the functioning of the free movement of goods in the European Union 40 years after it was defined by the Court of Justice?

Prof. Małgorzata Korzycka: The principle of the free movement of goods seemed to be the crowning principle of EU law. It was included in the Treaty of Rome in 1957 and retained its place in the Treaty of Lisbon, but with some modification (shifting Art. 29–30 of the Treaty Establishing the European Community to Art. 34–36 of the Treaty on the Functioning of the European Union). In the case law of the Court of Justice it was articulated for the first time in the famed Cassis de Dijon case, from which the mutual recognition principle was derived, and the accompanying principles for mandatory requirements, together with the proportionality test.

It thus seemed that a remedy had been found for the failure of vertical legislation in the food law area, which proved to be a fiasco because of the inability to harmonise the entire market for products using standards (as a kind of recipe) enacted for specific food products or ingredients.

Alongside the principle of mutual recognition of standards, established in the case law of the Court of Justice, the response to the inadequacy of vertical legislation was the enactment in many area of food law of horizontal legislation in the late 1970s and early 1980s. This led to development of rules for the entire food industry in the area of food hygiene, official oversight, and labelling.

But what remained unresolved was the issue of application of the mutual recognition principle, which was somehow supposed to fix the problem of the free movement of goods (in this case, foods). That did not happen. It quickly turned out that there were numerous problems with applying the mutual recognition principle. Stunningly, enterprises in the food industry proved to be largely unaware of the existence of this principle. But first and foremost, lawmakers kept introducing a series of technical barriers for products at the pre-market phase. This became a serious damper on the free introduction onto the market of member states of products legally produced in another member state. Consequently, the principle of mutual recognition of standards in this area was largely not applied.

It should be pointed out that European law has retained existing vertical regulations, often developed with great difficulty (for example, it took 14 years to reach the consensus of stakeholders required to adopt Directive 79/693/EEC of 24 July 1979 on the approximation of the laws of the Member States relating to fruit jams, jellies and marmalades and chestnut purée), while periodically amending them. New vertical regulations have arisen, although generally not very many, for example concerning alcohol products: Regulation (EC) No 110/2008 of the European Parliament and of the Council of 15 January 2008 on the definition, description, presentation, labelling and the protection of geographical indications of spirit drinks and repealing Council Regulation (EEC) No 1576/89—containing definitions of specific types of spirits. With the introduction of a definition of “liqueur” in this regulation, the Cassis de Dijon case would now be moot!

The technical barriers I mentioned were defined in a regulation from 2008 (Regulation (EC) No 764/2008 of the European Parliament and of the Council of 9 July 2008 laying down procedures relating to the application of certain national technical rules to products lawfully marketed in another Member State and repealing Decision No 3052/95/EC). It should thus be pointed out that after the Cassis de Dijon case had been in force for about 30 years, the European Union issued a regulation that was a kind of response to the ineffectiveness of application of the mutual recognition principle in a quite serious area. The technical barriers in question involve primarily consumer health and safety, but also labelling and pre-market registration, approvals and certificates. It is plain to see that the member states build barriers to protect their own markets, which on one hand is inconsistent with European integration but on the other hand demonstrates a strong trend toward diversity. Diversity was always stressed by the founders of the European Union as balancing measures for unifying Europe—not in opposition to integration processes, but as a process accompanying integration and consistent with it.

But the need to issue the 2008 regulation on technical barriers and the already extensive soft law of the European Commission (the most recent communication dates from 2015) testifies to the breakdown in applying the mutual recognition principle, rather than the flexibility of the member states in this respect.

It sometimes happens that an enterprise that has legally marketed its product in one EU member states encounters additional requirements, sometimes hard to meet, related to sale of the product in another member state. In what situations are such restrictions justified? How can an enterprise defend itself against unwarranted restrictions?

It should be borne in mind that every member state is sovereign when it comes to its own legislation. Although national law and EU law are closely connected, they remain two separate legal systems. It could be claimed that by establishing technical barriers, states are protecting their economic independence. The EU harmonises regulations across many areas, and sometimes establishes uniform rules, but it is not in a position to prevent national lawmakers from creating barriers protecting domestic markets. Taking an integrationist viewpoint, the EU calls these trade barriers, barriers to the free movement of goods. The member state treats the same technical regulation as protection of a specific interest of the enterprise.

It is an open question whether a restriction is justified or not. Who should assess that? If a restriction is connected to food safety, it would need to be addressed by a scientific expert—a scientific institution of high standing. Similarly, economic security would require an analysis not only from the legal side, but also from the economic side, and this should be done by an independent expert, also with scientific credentials. In this case the relevant type of proceeding for the case should be commenced, whether administrative or judicial (including the Court of Justice of the European Union). In short, the parties to the dispute clearly are not in a position to do this themselves, as contractual mechanisms cannot remove such barriers.

There is a strong trend visible in the food sector toward “nationalisation” of products by using designations of the country of origin, such as “Polish sugar,” “Irish butter,” and the like. Is this trend a threat to the EU’s internal market and the principle of the free movement of goods? Should it be treated as a harbinger of a new “nationalisation” not only of products, but also of regulations?

Do we face a threat of renationalisation? That question falls in line with the questions already raised. The answer should be sought in the tension existing in the EU between integration and diversification. The centrifugal forces are strong, Brexit is underway, Viktor Orbán and Danish politicians make comments undermining their presence in the EU or even the need for existence of this international organisation. Can we label renationalisation as a threat? Or perhaps renationalisation should be seen as a reaction by member states, which after all are sovereign, to the corset of EU regulations that have become too burdensome for realisation of national interests.

Work is underway in the European Union on reform of the food law system through what is called “refit.” What expectations do you have for the anticipated changes? Do you see an opportunity to simplify the food law system in the EU and cut the quantity of regulations issued?

Refit carries the hope that EU law will be simplified. But at what level? On what plane? Maybe it will be more compressed, but then wouldn’t this lead to the growth of more soft law? Unfortunately, the bureaucratic thicket of the European Union, which employs some 30,000 officials, must be noted. Such a bureaucratic machine has to justify its own existence and that is why it over-regulates commercial matters.

So is it possible to hold back the wave of creation of incredibly detailed regulations and a large and growing body of soft law in the food area (guidelines, resolutions, communications etc)? I observe in the EU a widespread faith that issuing regulations changes the commercial reality. But in my view this is not the case. EU law, which is public law, with regulatory and protective aims, repressive to a certain degree, operates on a vast organism comprising nearly 30 countries, each one of which has its own long heritage of legal standards grounded in the history of the country’s own society, its traditions, and social and national conditions. EU law, although binding, often is not absorbed into national law because it is not tailored to the economic and social realities of the specific countries.

Alongside public food law, a rapidly growing body of private law is developing and taking on increasing importance. This has to do with voluntary quality systems, enterprise management systems, and contracts—both B2B and B2C. The growing importance of private food law has been pointed out by the well-known professor of food law Bernd van der Meulen of Wageningen University & Research in the Netherlands. He stresses that in practice enterprises are not always aware that private standards are different from statutory standards. These norms look deceptively similar to legal regulations, but their influence may be even greater. Van der Meulen hypothesises in this respect that private law is beginning to predominate in commercial relations, and in the near future the importance of private food law will in practice exceed the importance of public food law. And perhaps that is indeed the future that awaits us.

Interview conducted by Joanna Krakowiak of the Life Science and Regulatory Practice at Wardyński & Partners, following the European Food Law Association conference on 15–16 September 2016 at the firm’s Warsaw office