Dual Quality food: Are different recipes for different markets legal?
Last year was marked by revelations that multinational food companies allegedly sell products composed of “lower quality” ingredients in central and eastern European markets.
Investigations initiated in several EU member states in central and eastern Europe have shown that some food products marketed in those countries were composed of different ingredients than the ones sold under the same brand in western Europe. For instance, tests and evaluations conducted by the Slovak Republic and Hungary revealed examples of animal fats being substituted with fats of plant origin, the use of materials with lower a proportion of fat, lower meat content, and the use of added sweeteners instead of sugar. Meanwhile, a Croatian survey found dual quality and price affects 85% of the products included in a study of products on sale in Croatia and Germany.
This provoked extensive EU-level discussions on whether selling so-called dual quality products is legal.
The governments of some countries concerned reacted strongly to these findings. Slovak Minister Robert Fico announced in July that Slovakia might instruct public institutions to only purchase Slovak products for their catering services. In Hungary, they even prepared a decree to introduce warnings on foods. This warning would state: “With different ingredients or different ratio of ingredients than in countries outside Hungary, but with the same brand name and appearance”.
Dual quality or local preference?
The European Commission was obliged to react. EC president Jean-Claude Junker went as far as stating that “EU law outlaws such practices” in his State of the Union speech in September.
Indeed, Directive 2005/29/EC on Unfair Commercial Practices (UCPD) protects consumers from misleading commercial practices involving false information, or information that deceives - or is likely to deceive - the average consumer “even if the information is factually correct”.
However, there is also another view that adapting products to different markets is common for businesses which respond to local tastes, variations in national food legislation and use of local ingredients. In this regard, industry association FoodDrinkEurope warned not to confuse food “quality” and “recipe”. Provided the product is properly labelled, variations in its recipes are allowed under the current EU legal framework.
To bring some clarity and “to equip national authorities with stronger powers”, as was suggested by Junker, the European Commission published a notice on the application of EU food and consumer protection law to issues of dual quality of products. The document entirely relies on existing legislation and aims to ensure that the Food Information Regulation, the General Food Law Regulation and the Unfair Commercial Practices Directive are properly enforced.
According to the guidance document, the marketing and sale of goods with different composition or characteristics does not violate single market rules, provided that safety and other legislation is respected. Therefore, it should be assessed on a case-by-case basis whether a commercial practice in question is in breach of the existing laws.
Political pressure mounting
That being said, the Commission sets out in the guidelines that it would wish to ensure full transparency in food composition (beyond the current legal obligations). This could be achieved through a Code of Conduct that is currently being discussed with the industry. Alternatively, if the guidelines would not be effective in tackling the problem of unfair trading practices, it was indicated by the Commissioner Věra Jourová that the Commission would push for further regulation.
What could be of potential concern for the food industry is that the EU institutions have been particularly active on the dual food quality issue, which was again raised at the ministerial summit in Bratislava in October. There the Health and Food Safety Commissioner, Vytenis Andriukaitis, expressed his support for member states in reformulation of food on the market. In addition, the European Parliament is determined to change the current practice of different recipes for different markets and is working on its "own initiative" report on "dual quality" foods.
In conclusion, as long as the food products are safe, properly labelled and not falsely advertised, companies are not prohibited from changing the composition of their branded product. However, it appears that at this stage the objective of the EU institutions is to continue the political pressure on the food industry to abandon using different recipes for the same brand. In this regard, some companies have already opted for products reformulation, others might end up by rebranding certain foods.