Authors: Kateřina Slavíková, Martina Rievajová, Diana Gregová
In recent years, the issue of dual quality of food has been a frequently discussed topic, capturing the attention of not only consumers and the media but also European institutions. As of 1 July 2024, Slovakia has enforced a strict prohibition of the marketing of dual quality of goods, including food products. In recent months, supervisory authorities have started conducting initial inspections under the new legislation. In contrast, the State Agricultural and Food Inspection Authority (SZPI) (the “Czech food authority”) has been conducting similar inspections for years. Recently, the Czech food authority published updated information on this issue based on previous inspections. What legislative change initiated the control of dual quality of food products in Slovakia? What approaches do the respective countries take towards inspections? And what are the implications for manufacturers and consumers?
PROHIBITION OF DUAL QUALITY DIRECTLY HAS ITS LEGAL DEFINITION
In Slovakia, it has long been problematic to penalise dual quality of goods. In particular, supervisory authorities lacked explicit legal support to effectively monitor and penalise dual quality of goods.
However, as of 1 July 2024, new consumer regulation came into effect (of which we informed HERE), introducing, among other things, a new unfair commercial practice. Under this regulation, the trader engages in a deceptive practice if:
• they present goods as identical to those marketed in another EU member state, while
• these goods have different properties or composition.
The new regulation also specifies that the aforementioned rule is not universally applicable and includes certain exemptions, namely:
• The difference must be substantial. It is not enough for the assessed goods to have a different composition; the difference must be significant. Therefore, the substitution of a marginal ingredient of food should not immediately be considered a prohibited practice;
• Even a substantial difference can be justified. If the goods differ in a significant component or property, the trader can justify this difference with objective and legitimate factors. Such factors include differences arising from local legal requirements (e.g., a specific amount of fruit juice required for a product to be called fruit nectar).
However, the new regulation does not introduce special rules for dual quality of food products. Therefore, their potential dual quality is assessed solely under general consumer regulation.
An interesting aspect of the new Slovak regulation is that it explicitly considers only the marketing of goods with prohibited dual quality characteristics as an unfair practice. This contrasts with the Czech regulation, which prohibits the placement of food products that violate this rule as such. Given the recent implementation of the Slovak regulation, it is uncertain how supervisory authorities will deal with this seemingly unintended narrowing of the prohibited practice.
If the prohibition is violated, the trader will face penalties from the supervisory authority as well as potential claims from consumers.
In such cases, the supervisory authority may impose the trader a fine of up to EUR 200,000.
Additionally, consumers may demand contract withdrawal, the right to remedy, and compensation for damage.
Unlike the Czech food authority’s activities, it is unclear whether regional branches of the State Food Administration Authority (the “Slovak food authority”) have already started inspections. At the time of preparing this article, any potential results from these inspections were not publicly known.
However, it is certain that the Slovak food authority intends to conduct them. This is evidenced by an announcement published on the Slovak food authority’s website, urging consumers to participate in identifying dual quality and to report any suspected differences in quality via a form.
Given that the Slovak food authority has issued only one methodological guideline for inspections (while the Czech food authority already has the 5th version of its methodology guideline available HERE), which primarily refers to general EU recommendations, it is uncertain how the inspections will be conducted.
The guideline suggests that when assessing this unfair commercial practice, the key factors will be:
• whether the differences between identically labelled goods are clearly recognizable to consumers;
• whether consumers have genuine access to essential information about the differences;
• how the trader justifies the differences.
Therefore, it is crucial to be prepared for inspections and to consider the prevention of misleading food labelling when designing packaging, labelling, or marketing food products.
HOW ARE SUSPECT PRODUCTS IDENTIFIED?
Since the prohibition of dual quality of food came into effect in the Czech Republic in 2021 (of which we informed HERE) the Czech food authority conducted extensive monitoring across the country and other EU member states until 2023. The aim of these inspections was to identify products that might violate the dual quality prohibition. The selection included approximately 150 food samples from various categories, ranging from dairy products and confectionery to durable products from both well-known and private brands.
During the monitoring, inspectors evaluated several aspects, such as packaging appearance, differences in composition, sensory properties, and how consumers were informed about any differences.
The results of these analyses served as the basis for subsequent official inspections.
WHAT IS THE STATE OF OFFICIAL INSPECTIONS?
Based on the monitoring results and consumer reports, eight inspections have been initiated since 2022, focusing on significant differences in the composition or properties of food products marketed in the Czech Republic compared to reference products from other EU member states.
As of April 2024, a violation of the dual quality prohibition was confirmed in one case only. This involved differences in the vegetable oils used (the product from Germany and Austria contained sunflower oil, while the Czech sample contained palm oil).
Over the last three years, the issue of dual quality of food has moved forward significantly. The key trends are:
Based on the overview of the situation in both countries, it is clear that the topic of dual quality of food is highly relevant. It is essential to be prepared for potential inspections and, if possible, to adopt preventive measures.
At HAVEL & PARTNERS, we are ready to assist you with assessing appropriate food labelling, proper communication about food quality, and provide swift, targeted assistance in the case of inspections Feel free to contact us!