Law of the European Union - Chocolate - Case Study Example

Law of the European Union- Chocolate Case Law Analysis Introduction European Union court decision has put a full stop for the three decades old chocolate war that existed between UK, Ireland on one side and Spain and Italy on other side about the marketing of chocolates made from UK in Spain and Italy. This case is famously known as ‘chocolate war’ case. This research essay analyses the various facets of the case and also offers solution to the given problem on the basis of decided case laws in the European Union court. Analysis It is to be noted that EU Directive 73/241/EEC dated 17th April 1996 while defining chocolate and cocoa products, no provision has been made for the use of vegetable fats to substitute cocoa butter in the manufacture of chocolates. During accession of UK, Denmark and Ireland to EU, an exemption was granted to these countries on the basis of the rules applicable in those countries, permitting the use of vegetable fats up to a maximum threshold of 5% in those countries and chocolates marketed in those territories. Further, only six kinds of fats from vegetable can be utilised of all equator origin and labels should contain “comprises fat besides cocoa butter”. However, there is a clause which facilitates European nations to bar the exploitation of fats other than cocoa fats by their country’s chocolate manufacturers only. Moreover, all merchandises must be distinctively marked so that the customer aware if or not the chocolate contains vegetable fats of non-cocoa or not. Further, the term “milk chocolates” has been used in UK and in Ireland and in case of exports of chocolates to other member countries of EU, it is usual practice that these words should be replaced by “family milk chocolates”. In Commissioner v. Kingdom of Spain, Italy and Spain banned the sale of UK chocolates in their territory unless if it is labelled as “chocolate substitutes.” UK argued that by substituting the word ‘chocolate substitutes” it will give wrong connotation as if it has been manufactured out of inferior ingredients. Both Italy and Spain argued that European ruling 73/241/ECC has not provided for the usage of other than cocoa –based ingredients in chocolate products like vegetable fats besides cocoa butter. As such, their country laws are in harmony with European Community law. The European Union Court held that Spanish and Italian authorities had no right to forbid UK and Irish chocolates in this style. The Court also drew the attention that other 13 member nations which have permitted to sell these products as “chocolates” in their provinces. The derogation stipulated for in Directive 73/241/EEC, permitting the United Kingdom and Ireland to allow the use in their territory of the name “milk chocolate” and to name it as “milk chocolate with high milk content” when sold outside their country, will be sustained. However, later, the English terminology “milk chocolate with high milk content” is to be substituted by the terminology “milk chocolates.” Finally, the European Union court1 held that the action of Spanish and Italian authorities in forbidding the sale of UK and Irish chocolates in their territories without some stipulation in the labels is incompatible with EC treaty provisions on free movement of goods. (O’Rourke Raymond 2005:105) Restriction on use of generic name: The European court has held that Member states cannot restrict the use of a generic name for products that are manufactured out of particular raw components or include only a prescribed percentage of raw components. For instance, in case 286 /862 , the European court held that a rule made by French government limiting the name Edam to cheese which should contain a minimum of 40% fat infringed the Article 28 of the European Commission as it had the consequence of secluding German Cheese which had been legitimately manufactured with a fat substance of 34%. In Commission v Italy3 , the European court held that an decision made by Italy restricting the name ‘Chocolate’ to merchandises made without contents of vegetable fats and demanding that chocolates which is manufactured with fat to be christened as “chocolate substitutes’ infringed the provisions of Article 28 EC . Further, EC Commissioner held that there was an infringement of Article 28 EC if one Member state restrict or ban the usage of a generic name which is widely employed elsewhere in other Member states. In Commissioner v Germany4 , the term ‘Clinique’ was refused to be used in Germany for cosmetics which it claimed that it could misguide its consumers. It was claimed by Germany that word ‘clinique’ refers to hospital in Germany. However, Commission was of the view that other Member states employing identical names had no such issues and hence, Cassis is applicable. Restrictions on contents of a product Article 28 EC is said to be contravened when a Member state’s national legislation restricted or imposed limits on the ingredients or contents of any products. A number of cases have been reported under this head. In ‘cassis de Dijon’ 5 a content restriction of alcohol level of 25% for some spirits manufactured by Germany was held to be in infringement of Article 28 EC. In Gillis and Andres 6 it was held that the Italian law demanding that all vinegar to be manufactured from wine alone was in infringement of Article 28 EC. In Drei Glocken 7 the EC court viewed that an Italian rule demanding dried pasta to be made up from durum wheat only and not from any mixture of common wheat and durum wheat or from common wheat alone was in infringement of Article 28 EC. In Bellamy8case, it was held by the European court that the Belgian law demanding that bread that could be sold in Belgium should contain salt only up to 2 percent was infringement of Article 28 EC. In Greenham and Abel 9 case, it was held by European court that a French law restricting that sale of any drink and food that should contain a specific chemical alternative was against the provisions of Article 28EC. In Commission v. Italy case10, famously known as’ Red Bull ‘case where Italian law prohibiting beverages with more than 125mg of caffeine was held to be against the provisions of Article 28 EC. In Italy v Commission11 it was held that a French government restriction on imported electrical merchandises was held reasonable as it had fostered problems for French electrical industry. If at all, Italy and Spain wants to forbid chocolates from UK and Ireland, they should have demonstrated with substantial reasons that imports of chocolates from UK and Ireland will create issues for the chocolate industries in Italy and Spain. National interest and Article 28 –Free Movement of Goods In certain cases, national interest of Member states will be taking priority over the free movement of goods under Article 28. Thus, in certain cases, restrictions placed by Member states will be observed that it is not infringing the Article 28 EC. However, measures taken under Article 30 EC should be proportionate. It should be most appropriate and it should not tantamount to an arbitrary discrimination measure and it should not place camouflaged restriction on free trade between Member states. However, in later period, some of these restrictions have been justified on the public health deteriorations by the Member states. (Hotspot Margot et al 2006:312). Discussion about the case given in the problem In the given case, Commission Regulation 123/2007 confines the use of the word ‘chocolate’ to products derived from cocoa which do not contain vegetable fat, and which are made in Belgium. These are against the commission directives and Article 28 of the EC which authorises free movement of goods within the member of states. Further, chocolate is a generic name and it cannot be claimed any Member State as its own. If “Yum Yum” files a suit against commission regulation 123/2007, it will definitely succeed as use of vegetable fat is not prohibited in producing chocolates in the above said regulation. It is to be noted that EU Directive 73/241/EEC dated 17th April 1996 while defining chocolate and cocoa products, no provision has been made for the use of vegetable fats to substitute cocoa butter in the manufacture of chocolates. During accession of UK, Denmark and Ireland to EU, an exemption was granted to these countries on the basis of the rules applicable in those countries, permitting the use of vegetable fats up to a maximum threshold of 5% in those countries and chocolates marketed in those territories. Further, only six kinds of fats from vegetable can be employed of all equator origin and labels should contain “includes fat besides cocoa butter”. However, there is a clause which facilitates European countries to bar the usage of fats of non-cocoa origin by their country’s chocolate manufacturers only. Moreover, all merchandises must be distinctively marked so that the consumer aware if or not the chocolate contains vegetable fats of non-cocoa or not. In the given case, the reply from EU commissioner through e-mail will not hold good for the following reasons: EU Directive 73/241/EEC dated 17th April 1996 itself permitting the use of vegetable fats up to a maximum threshold of 5% in those countries and chocolates marketed in those territories. Further, only six kind of vegetable fats can be employed of all equator origin and labels should contain “includes fat besides cocoa butter”. Hence, Commission reply that a recent scientific study concluded that vegetable fat combined with coca is detrimental to the health does not hold good. The contention that Belgium has traditionally been the homeland of chocolates and allowing other countries to claim the term ‘chocolate’ for their products would be discriminatory and the Commission conclusion that the term ‘chocolate’ has to be withdrawn from ‘Yum Yum’ advertising material will not maintainable as chocolate is a generic name and its use by other member states cannot not be restricted. For both the Yum Yum and I Love Chocolate, there are many precedents for their case like cassis de Dijon, Gillis and Andres, Drei Glocken, Bellamy, Greenham and Abe and Red Bull and it will be not difficult for these companies to remove any bar placed by European Commission either on the contents or use of generic name for chocolates. Thus, both Yum Yum and I Love Chocolate have strong case and if they file a case with ECJ, they will win the case as per the arguments listed above. Conclusion According to European Union Commissioner, chocolate legally made in other Member country where employment of fats are permitted, should benefit from open admittance to all country markets. Article 28 of the treaty confers this right and also obliquely from the Directive. In Italy case, European Commission held that right to sell chocolate which includes fats from vegetable besides cocoa butter under the style ‘chocolate substitute’ is an unbalanced step for safeguarding its consumers. Labelling as ‘chocolate substitute’ may make consumers misinformed about the contents of such chocolates by other necessary and less qualified substances like objective and unbiased labelling. (Jukes David 1999) EU decision has put a full stop for the three decades old chocolate war that existed between UK, Ireland on one side and Spain and Italy on other side. The European Court of Justice (ECJ) ruling that Italy and Spain assertion that chocolates that do not include 100% cocoa butter be christened as ‘chocolate substitute’ contravened the EU’s doctrine of the free movement of goods. The verdict in the chocolate case is a land mark verdict as it has reaffirmed the significance of EU’s doctrine of free movement of goods and reaffirmed that impediments and barriers thereto will not be accepted by the ECJ at any cost. List of References Goodburn, Kaarin. (2001) EU Food Law: A Practical Guide. Cambridge: Woodhead Publishing Limited Horspool, Margot et al. (2006) European Union Law .London: Oxford University Press. Jukes, David. (1999) ‘Barriers to trade: infringement proceedings.’ British Food Journal Volume 101 Issue 11 Macmaolain, Caoimhin. (2004) EU Food Law. Bedfordshire: Kluwer Law International. O’Rourke, Raymond. (2005. European Food Law. London: Sweet & Maxwell. Slater Donald (2003) Would Chocolate by any other name taste as sweet? German Law Journal [online] available from [7 January 2009] Read More