Asda's long running battle to win the right to slice Parma ham in the UK for sale in its stores there ended in failure yesterday after a ruling by the European Court of Justice (ECJ).
The British retailer has been at loggerheads for many years with Parma ham producers, grouped together under the Consorzio del Prosciutto di Parma, over whether the famous Italian ham had to be sliced and packaged in the region of production.
The Italians argued that the national legislation governing protected designations of origin and geographical indications for food products was quite clear on this fact: Prosciutto di Parma must be sliced and packaged in the region of production. This national definition was then adopted as part of the EU rules in 1996.
But Asda bought its Parma ham from a UK importer Hygrade, which sliced the ham and packed it hermetically in the UK, prompting the Consorzio to take legal action against the retailer and its importer in 1997.
Producers suffered a setback in 2002 when a preliminary ruling from the ECJ suggested that Asda had not acted illegally. However, since that date, EU Farm Ministers have agreed to tighten the rules on PDOs and this is thought to have influenced the ECJ's final decision.
The Court said that while the EU rules adopted in 1996, based on drafts drawn in 1992, did not specifically state that PDO products had to be grated, sliced or packaged in the region of production - the loophole that Asda has used to justify its action - they also did not rule out the later imposition of such restrictions "in order to satisfy the criteria of quality and guarantee an identifiable geographical origin".
"Consequently, grating, slicing and packaging the product may be made conditional on those operations taking place in the region of production, where the corresponding conditions are laid down in the specification," the Court said.
The ECJ agreed that such conditions could restrict exports - since only ham produced and sliced in Parma could carry the PDO name - and as such could be said to be contrary to EU rules. But it also said that EU rules allowed for certain exceptions to the free movement of goods on grounds such as the protection of industrial and commercial property, and that the regulations governing PDOs were in line with that.
"The slicing of ham and its packaging constitute important operations which may damage the quality and authenticity and, consequently, the reputation of the PDO if those requirements are not complied with. The specifications for Parma ham define checks and detailed strict operations in order to preserve the reputation of the product," the ECJ said.
The ECJ also said that PDO would not be protected in the same way by an obligation imposed on operators outside the region of production to inform consumers by appropriate labelling that slicing and packaging have taken place outside that region. "There are therefore no alternative, less restrictive, measures to attain the objective pursued," it said.
But the loophole was not closed entirely. "The Court finds that the protection conferred by a PDO does not normally extend to operations such as grating, slicing and packaging the product. The Court states that those operations are prohibited to third parties outside the region of production only if that is expressly laid down in the specification [as it was in the case of Parma ham]." It added that such restrictions had to be adequately publicised to third parties to ensure that the PDO be adequately protected.
The Consorzio del Prosciutto di Parma welcomed the Court's decision, and the end of its six-year battle with Asda.
Stefano Fanti, managing director of the Consorzio, commented: "This is an important day for the 200 producers of Parma ham and all the owners of PDO products in Europe and their customers. It recognises that PDO owners can take measures to offer their customers the best guarantee of product quality and origin."
He continued: "Control over the whole process, including slicing and packaging, guarantees quality and authenticity. Last year we exported more than 6 million packets of pre-sliced Parma Ham to the UK, each one supervised by independent inspectors and marked with the Consorzio's brand, the Parma Ducal Crown. The quality and consistency of the approved product is recognised by the British consumer with a 65 per cent increase in sales in three years."
Fanti acknowledged that Asda has now reverted to producing pre-sliced packets in the Parma region, and that the case - now more a question of principle than a direct action against Asda itself - only referred to pre-sliced packets of Parma ham. "The Consorzio has never sought to prevent Asda or any other retailer from slicing Parma ham on the delicatessen counter where customers can check that the ham that they buy is authentic."