A few more helpful hints from the Court of Justice of the EU on the indication of country of origin

By Nicolas Carbonnelle, Raoul Grifoni Waterman

09-2019

The Court of Justice held in a judgement of 4 September 2019 in case C-686/17 that where customs regulations require a specific indication of the country of origin to be provided for placing a product on the market, that indication as such cannot be regarded as misleading consumers. In such cases, no obligations may be imposed on the producers to provide additional information regarding the indication of the country of origin in order to prevent any alleged risk of misleading of consumers per the rules on the provision of food information to consumers.

Facts and background of the case

The facts that gave rise to case C-686/17, Zentrale zur Bekämpfung unlauteren Wettbewerbs Frankfurt am Main eV (hereafter, "the Zentrale") v Prime Champ Deutschland Pilzkulturen GmbH (hereafter, "Prime Champ") concern a dispute in which concerns were raised regarding the relationship between various instruments of European Union Law that define rules regarding the indication of the country of origin of fresh fruits and vegetables sold to consumers.

Prime Champ produces and places cultivated mushrooms on the market. The growing process of the cultivated mushrooms starts in the Netherlands and Belgium, where the raw materials for compost are cut and mixed for seven to eleven days. In a second production phase, the mix is pasteurized for five to six days and the compost is prepared in the Netherlands. In the third production phase, the mould spores (mycelium) are injected into the compost for fifteen days. In the fourth phase, a start is made with the breeding of the mushrooms in cultivation boxes in the Netherlands, in which the mushrooms grow to about 3mm after ten to eleven days. The cultivation boxes are finally transported to Germany after about 15 days, where the first harvest takes place at Prime Champ's farm. Prime Champ markets the cultivated mushrooms with the indication „Origin: Germany”.

The Zentrale argued before a first instance court in Germany that Prime Champ should not be allowed to offer and/or put cultivated mushrooms on the market with the indication „Origin: Germany” anymore, because the essential phases of the production and cultivation phase did not take place in Germany. The lower court rejected that claim, and the appeal was also dismissed. Finally, the Zentrale appealed to the Bundesgerichtshof (Federal Court of Justice).

The Zentrale claimed that the indication „Origin: Germany”, as made by Prime Champ, was misleading and the Zentrale submitted that additional information should be provided on the label in order to make it non misleading. The Zentrale argued that Prime Champ should cease selling cultivated mushrooms with the indication „Origin: Germany”, without other informational additions.

The Zentrale's reasoning notably stated that the term 'country of origin' used in Article 113a (1) of Regulation (EU) No 1234/2007 (the now repealed Single CMO Regulation) and Article 76 (1) of Regulation (EU) No 1308/2013 (establishing a common organisation of the markets in agricultural products) must be interpreted in the light of the scope and the purpose of these provisions. Consumers must, after all, be protected and given the opportunity to make an informed purchasing decision. The Zentrale gave the example of animal products, for which Implementing Regulation (EU) No 1337/2013 (on the indication of the country of origin or place of provenance) stipulates that different labelling entries must be made in order to adequately inform consumers about the origin of the meat in question.

The Zentrale argued that Article 60(1) of the Union Customs Code (Regulation (EU) No 952/2013) applies only if the goods in question have been entirely obtained in a specific country. The Zentrale also argued that Article 60(2) of that Union Customs Code relates to the case where several countries have been involved in the production of that good, and was of the opinion that the legislator has based these provisions on the principle that a plant can only be 'harvested' in the country in which it is planted and from the ground with which it is connected. The cultivated mushrooms in this case were, however, planted in a particular country in a movable container filled with soil, and taken from that soil in another country.

The Bundesgerichtshof referred a request for preliminary ruling to the Court of Justice of the European Union to the purpose of clarifying the interplay between the rules defined respectively in the fields of customs, agriculture and consumer protection, and submitted the following four questions to the Court of Justice:

  • For the purposes of the definition of the term ‘country of origin’ in Article 113a(1) of Regulation (EC) No 1234/2007 1 and Article 76(1) of Regulation (EU) No 1308/2013, 2 are the definitions in Article 23 et seq. of the Community Customs Code 3 and Article 60 of the Union Customs Code 4 decisive?
  • Do cultivated mushrooms which are harvested in a national territory have their origin in that territory pursuant to Article 23 of Regulation (EEC) No 2913/92 and Article 60(1) of Regulation (EU) No 952/2013 if substantial production steps [take] place in other Member States of the European Union and the cultivated mushrooms have been transported to the relevant national territory only three days or fewer prior to the first harvest?
  • Is the prohibition on the making of misleading statements under Article 2(1)(a)(i) of Directive 2000/13/EC 5 and Article 7(1)(a) of Regulation (EU) No 1169/2011 6 to be applied to the indication of origin that is required under Article 113a(1) of Regulation (EC) No 1234/2007 and Article 76(1) of Regulation (EU) No 1308/2013?
  • Is it permitted to append additional, explanatory elements to the indication of origin prescribed under Article 113a(1) of Regulation (EC) No 1234/2007 and Article 76(1) of Regulation (EU) No 1308/2013 in order to counteract a misleading statement prohibited under Article 2(1)(a)(i) of Directive 2000/13/EC and Article 7(1)(a) of Regulation (EC) No 1169/2011?
 
Findings of the Court

The CJEU held, on the first and second questions, that the meaning of the term 'country of origin', used in the Regulations on agriculture, must be based on the customs regulations for determining the non-preferential origin of goods, namely Article 60 of the Union Customs Code. The CJEU considered that Article 60(1) of the Union Customs Code, read in conjunction with Article 31 (b) of Delegated Regulation 2015/2446, should be interpreted in such a way that the country of origin of cultivated mushrooms is the country where they are harvested, even though essential phases of production take place in other Member States of the Union and those mushrooms were transferred to the territory where they were harvested only three days or less before the first harvest.

On the third and fourth questions, the Court noted that the fact that Directive (EC) No 2000/13 (now replaced by Regulation (EU) No 1169/2011 ("the FIC Regulation")) did not refer to the customs procedure for determining the origin of foodstuffs does not alter the fact that, on the basis of the rules which are otherwise applicable to fruit and vegetables, those products may only be placed on the market if the country of origin is specified, whereby that country is determined on the basis of the customs procedure. It is notable that under the FIC Regulation the notion of 'country of origin' of a food is defined by reference to the customs rules.

The Court recalled that the FIC Regulation notably imposes the indication of the country of origin or place of provenance of a food where failure to indicate this might mislead the consumer as to the true country of origin or place of provenance of the food, but that the FIC Regulation applies without prejudice to other specific EU rules on labelling. In this regard, the CJEU specified that the general prohibition of misleading consumers as to the country of origin of foodstuffs, laid down in Article 2 (1) (a) (i) of Directive 2000/13 (now Article 7(1)(a)) of the FIC Regulation), as regards fresh fruit and vegetables, does not apply to the measures provided for in Article 113a (1) of Regulation No 1234/2007 (now Article 76 (1) of Regulation No 1308/2013).

The CJEU emphasized that in case the indication of the country of origin, determined by virtue of the customs procedure, is required for the product concerned to be placed on the market, that indication as such cannot be regarded at the same time as being liable to mislead consumers.

In view of the foregoing, the CJEU held that Union Law must be interpreted as meaning that where an indication of origin is required by Customs law, this indication cannot be held to mislead consumers and therefore, in such circumstances, no obligation may be imposed on food business operators to supplement the country of origin information with additional information, and there is no risk to be prevented of potentially misleading consumers.

The full text of the judgment of the Court of Justice is not available in English yet, and can be found here (in Dutch) and here (in French).