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.
In a previous post from January last year I wrote about country of origin labelling (COOL). I mentioned that the Commission was expected to adopt implementing rules on mandatory COOL for unprocessed meat of sheep, goat, pig and poultry, based on the Food Information to Consumers Regulation. A nice infographic about the new EU food labelling rules can be found here.
And now there is ‘COOL’ news: rules on origin labelling for meat apply from 1 April 2015. Which rules? The Commission adopted Regulation 1337/2013 on the indication of the country of origin or place of provenance for fresh chilled and frozen meat of swine, sheep, goats and poultry.
Background and scope
As from 1 April 2015 no packaged unprocessed meat product from abovementioned animals may be lawfully placed on the market in the European Union without a label indicating where the animal was reared and slaughtered. An exception applies to meat that was lawfully placed on the Union market before 1 April 2015. This may be sold until the stocks are exhausted, provided of course that the best before date/use by is not exceeded.
The European COOL rules do not apply to processed meats. In December 2013 the European Commission published a report concerning mandatory country of origin labelling (COOL) for meat as an ingredient. The overall conclusion of the report is that consumer interest in COOL is strong, but this is not reflected in the willingness pay for the extra costs for FBOs and an additional administrative burden. Read this post if you want to recall the discussion on the December 2013 report. Click here for the response (in Dutch) from the Dutch Food Industry Federation (FNLI) on the resolution and here for an article on this topic on the website of EurActiv. Until now, COOL has not been extended to processed meats, however this may change. In this resolution from February 2015, the European Parliament urges the Commission to follow up its report with legislative proposals making the indication of the origin of meat in processed foods mandatory. It is expected that this will ensure greater transparency throughout the food chain and it will rebuild consumer confidence in the wake of the 2013 horsemeat scandal, and other food fraud cases. This seems contrary to the outcome of the report in terms of feasibility as COOL for processed meats means higher costs for the industry and an increased administrative burden.
Now let’s have a look at the new rules. What is meant with ‘country of origin’ and what information should be placed on the label? Continue reading to find out!
The core provision of the new Regulation is Article 5, which lays down the COOL rules for the meats covered by the Regulation. Either the indication (i) ‘origin’, (ii) ‘reared in’ + ‘slaughtered in’, or (iii) a list of different indications should be placed on the label according to Article 5.
What is meant with ‘country of origin’ for meat products?
Recital 3 of Regulation 1337/2013 refers to the concept as set out in Articles 23 to 26 of Council Regulation 2913/92 (Customs Code). For meat products the country of origin means the country in which the animal was born, reared and slaughtered. Only in this situation the following indication may be placed on the label as far as the food business operator is able to prove the correctness of the statement to the competent authority:
- ‘Origin: (name of Member State or third country)’
But what if the meat comes from animals, which were born, reared and slaughtered in different countries? In that case in indication of the country (Member State or third country) where the animal was reared and the country where the animal was slaughtered have to be specified on the label.
Article 5 of the Regulation gives specific criteria to determine the correct indication for the country where the animal is ‘reared in’ related to the rearing period of the animal in a country. If the specified rearing period is not attained in any country the label must show one of the following indications:
- ‘Reared in: several Member States’
- ‘Reared in: several non-EU countries’
- ‘Reared in: several EU and non-EU countries’
- ‘Reared in: (list of Member States or third countries where the animal was reared)’
The last option may only be used if the FBO is able to prove this to the competent authority.
The Member State or third country in which the slaughter of the animal took place has to be indicated as follows:
- ‘Slaughtered in: (name of the Member State or third country)’
If pieces of meat, of the same or different species, are packed together and correspond to different labelling indications, the label has to indicate the list of relevant countries for each species (see Article 5(3)).
Furthermore, the batch code identifying the meat supplied to the consumer or mass caterer should be placed on the label.
If you are a FBO operating both in the EU and the US you might be interested in COOL in the U.S. Like Europe, the U.S. COOL statute defines multiple origins for muscle cuts of meat, depending on where the animal was born, raised and slaughtered. This is pretty much in line with Europe, which defines “born, reared and slaughtered” as the origins that must be placed on the label. Do you want to learn more about COOL in the US and how the new EU rules are perceived in the U.S.? Here is an article.
The United States Department of Agriculture (USDA) Agricultural Marketing Service has published a practical COOL labelling guide for the industry with specific examples of appropriate COOL language for the U.S. market. You can find it here.
Cool with COOL?
What is the potential impact of the new rules on your business? With an increased complexity of the label this is likely to increase the costs for compliance. Consumers will receive extra information, but will they see this as an improvement? With regards to food safety, the Regulation prescribes the use of an identification and registration system to ensure traceability (Article 3). The system has to particularly record the arrival at and the departure of animals, carcasses or cuts from the establishment of the FBO. Also a correlation between arrivals and departures has to be ensured. Aside the mislabelling issue, the horsemeat scandal clearly showed that the current traceability systems are not adequate in case of incidents. More detailed rules on traceability are aimed to contribute to food safety and protection of food safety is also an important interest for the food industry. Compliance is serious business as non-compliance can lead to administrative sanctions. Furthermore, fraudulent labelling constitutes a criminal offence and an offender can be prosecuted under criminal law. This is what happened to Dutch meat trader Selten. Last week he has been sentenced to 2.5 years in prison. According to the court he is guilty of forgery. He has sold horsemeat as beef. Click here for the newsitem (in Dutch).
Do bugs have a place on your dinner plate other than the fly that lands on it or the caterpillar that accidently ended up in your dish, as it happened to live in the cauliflower you prepared for dinner? If you live in Europe you are likely to answer this question with ‘no’ and you might even have a slightly disgusted look on your face right now…
FAO and European Commission on insects
In other parts of the world certain insects are part of people’s diet and are sometimes even considered as a delicate and exclusive bite. The call to expand the consumption of edible insects worldwide recently became louder. According to the UN Food and Agricultural Organization (FAO), insects can potentially help solving the increasing demand for animal protein. In 2013 FAO published the report ‘Edible insects’ and in May 2014 the first international conference ‘Insects for food and feed‘ was organized in the Netherlands in collaboration between Wageningen University and FAO. This video provides a summary of the conference. Furthermore, Wageningen University announced the launch of the first scientific journal focussing on this topic in 2015. On 27 November 2013 the Director General for Health and Consumers mentioned edible insects as an interesting alternative source of protein in her speech:
‘Looking to the future, feeding a growing world population will inevitably increase pressure on already limited resources – land, oceans, water and energy. The development of alternative sources of protein will no doubt grow in importance and significance to meet the future protein demand. Such sources include cultured meat, seaweed, beans, fungi and, of course, insects. The greater use of insects is an interesting alternative both for human consumption and animal feed, given the prospect of high protein yields with low environmental impacts.’
Are edible insects Novel Foods?
During the abovementioned conference it became clear that there was an urgent need to develop legislation on edible insects to give the food and feed industry clear guidance on the requirements they have to meet. This discussion paper provides a look at the regulatory frameworks influencing insects as food and feed at international, regional and national levels. This paper, however, is not exhaustive. The European Commission has asked EFSA to deliver a scientific opinion on the risks of insect consumption, but this opinion is expected in 2015 at the earliest. Another question is whether insects should be considered Novel Foods covered by EC Regulation 258/97. According to this Regulation, Novel Foods require pre-market approval in the EU (Do you want to read more about Novel Foods? Check this, this and this post). At this moment the European Commission has not explicitly decided on whether insects should be considered Novel Foods or not. Until a clear position and a harmonization of the novel food status of insects at European level have been adopted, some Member States decide to apply their own ‘rules’ for the placing on the market of insects intended for human consumption.
In Belgium the placing on the market of the species included in the table below is tolerated, provided that the requirements of food legislation are met, especially and among others the application of good hygiene practices, traceability, compulsory notification, labelling and organisation of a self-checking system based on the HACCP principles. This tolerance does not apply to food ingredients isolated from insects, such as protein isolates.
Also France and the United Kingdom seem to tolerate the sale of edible insects in their countries. If you have any additional information from your country or region to include in this post, you are cordially invited to share this with us through email@example.com.
On 15 October 2014 the Dutch Office for Risk Assessment & Research (in Dutch ‘Bureau Risicobeoordeling & onderzoeksprogrammering‘, herinafter: ‘BuRO’) published their advisory report to the Inspector-General of the Netherlands Food and Consumer Product Safety Authority (in Dutch: ‘NVWA’) and the Dutch Ministers of Health Welfare and Sport and Agriculture. According to this report the following insects are currently produced and sold in the Netherlands.
The NVWA asked to assess the chemical, microbiological and parasitological risks of consuming heat-treated and non-heat-treated insects. The risk assessment was limited to the three species mentioned in table 1 above. BuRO recommends the Ministers to treat those insects as foods in the meaning of the General Food Law (Regulation 178/2002) that are required to comply with the hygiene regulations (Regulations 852/2004 and 853/2004) and all other food-related legislation. Those insects are not treated as Novel Foods in the Netherlands.
With regards to food safety, BuRO recommends the NVWA to use the following minimum requirements for rearing facilities:
- Products introduced to the market must have been heated to reduce microbiological risks. The hygiene criteria for processing of raw materials in meat preparations should be used.
- Food safety criteria for insect products:
– Salmonella: absent in 10 grams;
– L. monocytogenes: <100 CFU/g;
– B. cereus, C. perfringens, S. aureus and Campylobacter spp: criteria stated in the Decree on Preparation of Foodstuffs.
- Shelf life of 52 weeks must be demonstrated.
In the Netherlands, the Laboratory of Entomology from Wageningen University is involved in research on edible insects. Scientists Arnold van Huis and Marcel Dicke and cooking instructor Henk van Gurp even published a cookbook: the Insect Cookbook. Click here, here and here for video’s from these scientists on eating insects. More and more supermarkets in the Netherlands sell edible insects. Online it is possible to order various kinds of edible insects from around the world, which are not included in the lists above. NVWA does not seem to focus on enforcement in this area as long as food safety is not at stake.
A slaughterhouse for insects?
The question has been raised whether Regulations regarding to slaughtering animals are also applicable to the killing of insects for consumption. Regulation 1099/2009 on the protection of animals at the time of killing covers the killing of animals bred or kept for the production of food, wool, skin, fur or other products as well as the killing of animals for the purpose of depopulation and for related operations. So far, the Regulation seems to apply to the killing of insects. However, the Regulation defines ‘animals’ as ‘any vertebrate animal, excluding reptiles and amphibians’. Insects are invertebrates, which have an exoskeleton and don’t have a spinal column. This means that insects are outside the scope of this Regulation.
Novel Food or not, despite the lack of (legal) guidance and certainty regarding the regulatory status of insects on EU level, it is clear that the attitude towards the use of insects for food and feed is positive. Therefore, some Member States take action to allow the marketing of insects as food in their country until a clear position has been reached at European level. When EFSA publishes their report and the European Commission takes its position regarding the use of insects for food and feed, you will read it here or get informed through Twitter: @FoodHealthLegal.
On 24 September 2014 our firm organizes a seminar addressing the developments in Functional and Medical Foods. Where? Next door to our office in Pakhuis de Zwijger.
The Institute of Medicine has designated functional food as “any food or food ingredient that provides a health benefit beyond its nutritional benefit”. Functional foods comprise food supplements, probiotics and other foods having a beneficial effect on human health, which is often advertised by health or nutrition claims as using those claims in connection with this type of foods is very attractive from a marketing point of view.
Functional foods are just one step away from medical foods, catering for particular nutritional needs that regular foods do not supply. Contrary to functional foods, medical foods are highly regulated. Furthermore, both types of food are subject to specific legislation regarding health and nutrition claims as well as regarding food information to be provided to consumers.
The regulatory requirements for health and nutrition claims offer a chance and a challenge. Also, as of 13 December 2014, all food business operators have to comply with very strict, new information requirements on the basis of the Regulation on Food Information to Consumers. To what extent does this regulation help the final consumer to make healthy choices and how does this impact the entrepeneur? Our seminar will address these issues and provides practical guidance on solutions. Speakers are: Bernd Mussler (Innovation Project Manager at DSM), Ruud Albers (CEO at Nutrileads) and us (Karin Verzijden and Sofie van der Meulen).
A few spots left!
We still have a few spots left! Attendance is free and you are welcome to bring along your colleagues. More info? Check the invitation on our website. For registration, please send an e-mail to firstname.lastname@example.org with your name, the names of colleagues you would like to register and contact information. Questions? Contact our office manager Marjon Kuijs at email@example.com or +31 (0) 88 650 6500.
Looking forward to see you there!
Missed our seminar? Download our slides!