This year marked the 20th anniversary of VitaFoods Europe. This is a global nutraceutical event, where the whole industry gathers to meet, talk, listen and do business. Axon Lawyers again participated in this event, which took place from 10 – 12 May in Geneva, by giving four presentations. Below, you will find a short wrap up of each of them as well as the slides belonging thereto.
B2C Communications in the functional food and nutraceutical sector
Each and any food business operator loves to communicate the benefits of its products, especially in the functional food and nutraceutical sector. However, a strict regulatory framework applies to such communication, which has been largely harmonized at EU level.
For instance, when using nutrition and health claims, one should make sure the authorized wording (or any permitted variation) is used, as well as that the conditions for use are met. Furthermore, one should know that regarding food for special medical purposes, the use of health claims is prohibited. It thereby does not make a difference whether the marketing is targeted at health care professionals or at consumers/patients. Finally, one should avoid making medical claims for food products, including functional foods.
The presentation shows that, based on the presentation of functional foods, it is not always easy to tell whether it is a food product or a medicinal product. Guidance is provided how to prevent a food product to qualify as medicinal products in order to prevent fines for unauthorized marketing of medicinal products.
Marketing functional food to children within the EU
The marketing of functional food to children requires intimate knowledge of the applicable legal framework, both at an EU and at a national level. This presentation starts with a bird’s eye view on the topic, based on the recommendations of the WHO on the responsible marketing of foods and non-alcoholic beverages to children.
Subsequently the EU framework embodied in the Regulations on Health & Nutrition Claims, Food Information to Consumers and Food for Special Groups is discussed, where concrete examples of authorised claims for specific products are discussed.
Finally, it is explained that in various Member States, self-regulatory bodies such as the Advertising Code Committee in the Netherlands and the Advertising Standards Agency in the UK, play an important role in the evaluation of marketing campaigns of functional food products targeted at children. Again, concrete examples are provided by way of guidance.
New EU Clinical Trials Regulation
The aim of the new EU Clinical Trials Regulation (‘CTR’), which is applicable from 28 May 2016, is to ensure that Member States base their assessment of an application for authorisation on identical criteria throughout the EU. Furthermore, it aims to create an environment that is favourable for conducting clinical trials in the EU with the highest standards for patient safety.
The CTR applies to all clinical trials conducted in the European Union. It does not apply to non-interventional studies. The CTR covers investigations in relation to humans intended to:
- discover or verify effects of one or more medicinal products;
- identify any adverse reactions to one or more medicinal product;
- study absorption, distribution, metabolism and excretion of one or more medicinal products to ascertain the safety or efficacy.
So, what is the relevance of the CTR for nutraceuticals, as only medicinal products are covered by the CTR? Although there is no legal definition of ‘nutraceutical’, the word was introduced in 1989 as a portmanteau of the words ‘nutrition’ and ‘pharmaceutical’. Thus, nutraceuticals blur the line between food and drugs and it is often difficult — by legal definition — to distinguish between nutrients, food additives, drugs and nutraceuticals. The presentation discusses relevant case law concerning the food/drug borderline and provides the highlights of the new CTR from that perspective.
Alternative sources of protein
Like last year, alternative proteins were all over Vitafoods. Reasons for the development of alternative sources of protein are easy to point out: health, sustainability and animal welfare. In October 2015, the WHO published a scientific report in which the following was concluded: ‘Consumption of processed meat increases colon cancer risk.’ In the Netherlands, the Dutch Health Council promotes a diet containing more plant based than animal derived proteins.
Eating less meat – and animal derived protein – is also better for the environment as the current production methods require too much natural resources. Last but not least, if meat consumption decreases this is positive for animal welfare. Not only because less animals are slaughtered, but the risk to outbreaks of diseases such as swine fever decreases. Therefore, today there are many alternatives to the consumption of meat.
In the presentation some alternative protein products, such as products containing algae, mushrooms or insects are discussed in the light of the new Novel Foods Regulation as food products may be qualified as “novel” and therefore require authorization under the EU Novel Foods Regulation.
This contribution aims to provide you with a brief overview of the EU Organic legislation and recent developments. Being able to market products as ‘organic’ could be a plus for the food business operator (FBO) as the demand for sustainable production and organic food increases. This contribution focuses on the EU-system of organic certification of food products and will specifically look at the position of organic microalgae manufactured in the EU. Under the current legislative framework, these could not be marketed as such in the EU. This has changed since an interpretative note of the Commission of last summer. If you are an FBO interested in marketing organic microalgae, this for sure is of interest to you.
Organics Regulation – scope
First of all, what is ‘organic production’? According to recital 1 of the Organics Regulation organic production is: “(…) an overall system of farm management and food production that combines best environmental practices, a high level of biodiversity, the preservation of natural resources, the application of high animal welfare standards and a production method in line with the preference of certain consumers for products produced using natural substances and processes” (see also the definition in Article 2(a)).
What is covered by the Organics Regulation? Only agricultural plants, seaweed, livestock, aquaculture and animals are regulated under the Organics Regulation. For example, if an FBO wants to produce organic seaweed, all the processes have to be in compliance with the Organics Regulation. This approach is known as the ‘farm to fork approach’, which means every step in the production process throughout the supply chain has to comply with the Organics Regulation.
Organics Regulation – structure
The Organics Regulation has a layered structure. The following three layers of provisions can be found:
- General production rules (articles 1, 7 – 10), which apply to all forms of organic production.
- Production rules for different sectors (articles 11 – 21): general farm production rules and production rules for specific categories of products and production rules for processed feed and food.
- Detailed production rules (article 42).
If there are no production rules for the sector (layer 2), only the general production rules (layer 1) apply.
Compliance with the Organics Regulation has to be demonstrated by obtaining certificates from a certification body. (See the following link for a list of competent certification bodies in different Member States). In the event a certification body audits the FBO marketing organic products and it encounters violations of the Organics Regulation, it can decide to block certain non-compliant batches of products pending an investigation. Depending on the outcome, the certification body can subsequently decide to withdraw the certificate. If the certificate is withdrawn, the FBO is no longer allowed to market the products as ‘organic’. In case of severe violations, the competent authority may impose a recall of the products. In the Netherlands, Skal Biocontrole is the designated Control Authority responsible for the inspection and certification of organic companies in the Netherlands, within the context of Regulations: (EC) Nr. 834/2007 (Organics Regulation), (EC) Nr. 889/2008 and (EC) Nr. 1235/2008 (import of organic products from third countries). Skal monitors the entire Dutch organic chain on behalf of the Dutch Ministry of Economic Affairs.
The EU organic logo
The EU logo is regulated in a separate Commission Regulation. The main objective of the European logo is to make organic products easier identifiable by the consumers. Furthermore it gives a visual identity to the organic farming sector and thus contributes to ensure overall coherence and a proper functioning of the internal market in this field. For practical information regarding the EU logo, see this link and this link.
Prior to July 2015, FBO’s could not obtain an organic certification for microalgae manufactured within the EU for the use in their food products. FBO’s from third countries (non-EU) could market their products in the EU based on either the import procedure as set out in Article 33 (2) (import from recognised third countries) or the import procedure laid down in Article 33 (3) of the Organics Regulation (import of products certified by recognised control bodies). The strange situation was created where ‘organic’ microalgae could only be imported into the EU and not be produced within the EU.
How come? All agricultural products were considered to fall within one of the different production rules for specific categories of products (layer 2) and microalgae for food production were not included. Furthermore, detailed EU production rules for microalgae were absent (layer 3). (Article 42 (2) Organics Regulation).
The Interpretative note of the European Commission (Directorate-General for Agriculture and Rural Development) of July 2015 opened up the possibility for companies in both EU Member States and third countries to produce microalgae, which can be marketed as ‘organic’ and carry the EU organic logo. Both the existing production rules for plants (Article 12 Organics Regulation) and seaweed (Article 13 Organics Regulation) could be suitable for microalgae.
‘Until an implementing act adopted on the basis of Article 38 (of Regulation 834/2007) has clarified the situation, operators producing organic micro algae (except for use as feed for aquaculture) have therefore to comply with the general production rules, which apply to all forms of organic production (“layer 1”) and with the production rules for the sector of plants or seaweed (“layer 2”).’
The use of microalgae as feed for aquaculture is not covered in the Interpretative note, as microalgae as feed are already subject to the detailed production rules. The rules for the collection and farming of seaweed apply according to Article 6a of Commission Regulation (EC) No 889/2008.
The interpretation opens up the possibility to certify microalgae to be used as food (or as an ingredient in food) as being organic. When an implementing act will be published and enter into force is still unknown. A proposal for a new Regulation repealing the Organics Regulation has been published. On 5 November 2015 a report from the Committee on Agriculture and Rural Development on the proposal was published, introducing 402 amendments. The current status of the proposal is available through this link.
Aside from enforcement by a national control authority in case of non-compliance with the Organics legislation, consumers and other interested parties often also have the possibility to lodge a complaint relating to advertising of organic products. However, advertising of (organic) products is a topic to be covered in another contribution on Food Health Legal. Stay tuned!
On 11 September 2015 new legislation amending the current Commodities Act (in Dutch: Warenwet), partly entered into force. Under the new legislation the maximum administrative fine to be imposed on Food Business Operators (hereinafter: ‘FBO’s’) by the Dutch Food Safety Authority (NVWA) is increased dramatically compared to the prior maximum fine. The Dutch legislator has clearly increased existing fines to make them stronger and more effective to increase compliance with food safety regulations. The NVWA has more teeth, but will it bite?
The rationale behind the increased fines
A reason to increase the maximum fines can also be found in the battle against food fraud in general. Until recently the NVWA could impose a fine on an FBO on the basis of Article 32 of the Commodities Act. The maximum fine was set at € 4.500. According to its latest annual report, the NVWA imposed 2808 fines on FBO’s in 2014. The average amount of a fine was € 1.206,– and the total amount of imposed fines was € 3.413.893,–. Considering the costs of compliance with hygiene and administration standards, these penalties are merely peanuts for the average FBO and do not have the desired effect of contributing to compliant behavior as is confirmed by the statement further down in this post.
Fines linked to system under Dutch Penal Code
Fines in other areas such as data protection law are also subject to revision and they will both increase and expand (meaning an increased number of provisions will be subject to potential fines in case of non-compliance and those fines tend to increase as well). With a political climate both in the EU and in the Netherlands that leans towards stronger enforcement instruments, it was just a matter of time before the fines under the Commodities Act would be increased. The Dutch legislator seems to try to harmonize the several fines in different legal acts by referring to the categories of fines specified in the Dutch Penal Code. These categories are linked to the severity of the violation. The first category is the lowest and the sixth category the highest. The maximum fines are now set at the maximum of the sixth category: € 810.000,– (or 10% of the annual turnover). This means a 180 fold higher maximum fine!
In relation to the increase of administrative fines politician Sjoera Dikkers (Dutch Labour Party – PVDA) stated: “it is clear that a fine of € 4.500,– is cheaper for practically every company, then acting in compliance with hygiene practices in the Netherlands. For a fine of € 81.000,– this can be similar for big companies, depending on the nature of the infringement. That is why we would like to further increase the maximum penalty to the sixth category. This is the only way to scare companies enough to make sure they comply with hygiene requirements.”
The exact amount of the fine will have to be proportionate and therefore depend on factors such as the number of employees, the degree of culpability, the severity of the violation and/or the turnover of an FBO. The NVWA has to assess all individual circumstances in order to establish the amount of the fine.
Although relatively low fines indeed might give rise to profit for FBO’s from non-compliance and fraudulent behavior, drastically increasing the fines could have a downside for both the NVWA and the FBO’s. Imposing higher fines requires more effort and expertise from the NVWA. For fines that exceed the amount of € 340,– additional procedural requirements, similar to criminal law, have to be met by the NVWA. For FBO’s a high fine could indeed have a significant impact and even potentially mean bankruptcy. As we have seen in Dutch cases relating to the horsemeat crisis, the NVWA can impose the execution of a recall that can lead to bankruptcy. We will keep you informed on how this potential powerful enforcement instrument of high fines in the hands of the NVWA is handled in practice and dealt with in court. Hopefully, this will serve FBO’s in establishing what should be done to avoid or annul the decision of the NVWA to impose such fines, which is a part of our active practice.
The author is grateful to Floris Kets, trainee at Axon Lawyers, for his valuable contribution to this post.