A committee of MPs from the European Parliament has voted to take action on “dual quality”, whereby manufacturers provide different recipes for products in different EU markets.
The Parliament’s Internal Market and Consumer Protection Committee (IMCO) today (22 January) voted for fines to be imposed on offenders.
The issue dates back to the summer of 2017 when EU member countries from the former Communist Bloc in Eastern Europe complained about poorer quality food items being sold in their markets by western companies – often the same brands and products sold in higher quality versions in western Europe.
The leaders of the so-called Visegrad group of countries – Czech Republic, Slovakia, Poland and Hungary – lobbied the European Commission to make such practices illegal.
Members of the European Parliament’s IMCO committee agreed goods could only differ “on account of clear and demonstrable regional consumer preferences, the sourcing of local ingredients or requirements of national law, while this distinction is clear and comprehensively marked so as to be immediately visible to the consumer”.
For cross-border infringements – i.e. those harming consumers in at least three EU countries or two countries other than that of the trader – the maximum amount of fines must be set at EUR10m (US$11.3m) or at least 4% of the trader’s annual turnover in the previous financial year in the member state(s) concerned, “whichever is higher”, the committee said.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
However, the food industry lobby group FoodDrinkEurope said it regretted the outcome of today’s vote.
FoodDrinkEurope said it is “strongly against any deliberate dual quality of food” and “firmly condemns any such practices”.
However, the association argued the text adopted by the IMCO committee did not go far enough in listing legitimate reasons for product differentiation.
In a statement it said: “Most worryingly, inclusion of the concept in Annex I – which bans product differentiation ‘under all circumstances’ does not allow for a case-by-case assessment and may have far-reaching consequences as it is expected to, de facto or de jure, lead to the requirement for brands to have the exact same recipes all over Europe.
“This would in turn limit product innovation and consumer choice, increase consumer prices in certain markets (some of which may no longer be served as a consequence) and negatively affect local agricultural supply in these markets.”
FoodDrinkEurope said that given a European Commission study to determine the scale and scope of the dual quality phenomenon is still pending, it is “asking the co-legislators to better analyse and consider the impacts of the various policy options”.
The next step in the EU’s legislative process is for the text to be put to a vote of the whole Parliament in an upcoming plenary session before negotiations then start with the European Council can start.