Food fraud update at EU level and Interpol/Europol Opson VII operation preliminary findings

On 25 April 2018, Europol/Interpol published the results of the OPSON VII operation to which the EU Food Fraud Network contributed in particular in order to detect tuna intended for canning being fraudulently sold as fresh.

Justice, police, customs and food experts have been mobilised to investigate and to ensure the success of this operation in which 11 countries (Spain, Italy, France, Germany, Portugal, The Netherlands, the United Kingdom, Hungary, Liechtenstein, Norway and Switzerland) were involved. In some countries investigations took place on fishing vessels and in processing plants when, in other participating countries, extensive sampling plans took place at distribution and retail levels.

The case is about tuna for canning being illegally treated with substances that enhance the colour leading to a misleading impression of its freshness. This can represent a serious risk to public health, taking into account that the modification of the initial colour can mask spoilage allowing the development of biological amines (histamine) responsible for the so called scombroid syndrome in humans. Spain and France are also conducting judicial inquiries into tuna destined for canning and sold as fresh and on the illegal use of additives, the results of which cannot be disclosed at this moment. In total, more than 51 tons of tuna have been seized.

On the same topic, you can download also a Power Point presentation from DG Sante named Illegal treatment of Tuna: from canning grade to Sushi grade.

Coming back to Opson, the scale of this annual operation is growing ever year.

Run over the course of 4 months (December 2017 – March 2018) across 67 countries, OPSON VII resulted in the total seizure of more than 3.620 tonnes and 9.7 million litres of either counterfeit or substandard food and beverages as a results of more than 41.000 checks carried out at shops, markets, airports, seaports and industrial estates. In total some 749 people were arrested or detained with investigations continuing in many countries.

“The results of OPSON demonstrate what can be achieved to protect consumers worldwide when law enforcement agencies join their efforts and perform coordinated actions”, said Jari Liukku, Head of Europol’s European Serious and Organised Crime Centre, “It is a threat which requires such cooperation across borders, taking into account the increased integration and globalisation of supply chains. All countries face this threat and it is the duty of law enforcement agencies to make sure what consumers get in their plate is genuine and safe”.

“The dismantling of nearly 50 criminal networks involved in the production of fake food and drink is an important result in stemming the flow of potentially lethal products into the marketplace,” said Daoming Zhang, Head of INTERPOL’s Illicit Markets unit. “The volume of counterfeit and substandard products seized is a reminder to the public that they need to remain careful about what they buy and from where.”

A particularly disturbing case was discovered in Spain, where four people have been arrested and a factory that packaged counterfeit baby milk mostly destined for China was dismantled. Eight tonnes of the forged product were seized. The powder bought in bulk in Poland for one euro per kilo and delivered to Barcelona was not harmful but it lacked the nutrients needed by infants. It was also made in an environment that did not comply with food health and safety standards.

A final and detailed report on the results of the operation OPSON VII will be published in the upcoming months.

Recently on DG Sante website has been published also the Food Fraud Network (FFN) 2017 Annual Report, that shows an increment of the cases exchanged through the Administrative Assistance and Cooperation System (AAC) from 87 (2016) to the actual number of 597.

Moreover in 2017, the DG Sante launched a coordinated control plan on food sold online.

It was very well received by the Member States. On a voluntary basis, the authorities of 25 EU Member States plus Switzerland and Norway participated. The authorities checked about 1100 websites for certain products which are non-compliant with EU food legislation, namely for non-authorised novel foods and food supplements bearing medicinal claims.

They found 779 offers for such products, mostly from traders based in the country of the respective authority (65%), but also from traders located in other Member States (20%) or third countries, namely US and China (15%). Although this was not mandatory, in about 440 cases measures were taken with the aim to close the offer, including inspection of the traders’ premises, warnings and – in some cases – fines.

For non-compliant cross-border offers, administrative assistance was requested via the Administrative Assistance and Cooperation IT system (154 cases) and in case of health concerns notifications were issued via the Rapid Alert System for Food and Feed (139, of which 51 were notified to US and China).

The objectives of the plan were to encourage Member States to get more engaged in the control of the e-commerce food market, to cooperate more closely on non-compliant cross-border offers and to use for this cooperation the available IT systems.

The main findings of the plan are resumed by DG Sante as follows:

“The high percentage of non-compliant offers is a clear sign that the eCommerce control today needs to be strengthened. In this respect, the Commission has taken a number of actions in order to support Member States’ competent authorities in this new task of eCommerce control, such as:

  • training of staff in online investigations,
  • establishing contact points for cooperation with major trading e-platforms and market places including social media,
  • seeking cooperation with payment service providers and
  • adjusting legislation and electronic reporting systems to the needs of official eCommerce control.

However, further efforts are necessary, in particular to remind the main players of eCommerce such as platforms, payment services and the traders themselves of their responsibilities, to ask for their contributions to increase the safety of online offered foods and to reduce offers which mislead consumers”.

Most probably a second massive coordinate control plan on online offered food will be launched in a near future.

 

Dual quality food products guidance of the EU Commission – Now what?

Consumers from a number of EU countries and several governments (lead by Slovak and Czech representatives) recently complained that the quality of some products is lower in their home country when compared to products sold by the same producer and under the same brand across the border.

The free movement of goods principle, in facts, does not necessarily mean that every product must be identical in every corner of the Single Market. Whilst consumers are free to buy the products of their choice, business operators are also free to market and sell goods with different composition or characteristics, provided that they fully respect EU legislation (whether on the safety of products, labelling or other horizontal or sectoral legislation). Even products under the same brand may have different characteristics, due to legitimate factors such as the place of manufacture, consumer preferences or price variations in the target markets.

However, what can be a source of concern is when different compositions of identically branded goods are marketed in a way that has the potential to mislead the consumer.

The issue of dual quality of food products has been a source of growing concern; as clearly underlined by President Juncker in his State of the Union speech, there cannot be second-class consumers in a Union of equals and it cannot be acceptable that “in some parts of Europe, people are sold food of lower quality than in other countries, despite the packaging and branding being identical“.

The European Commission has taken forward actions on various fronts in order to tackle the issue of dual quality of products, combining dialogue with the parties concerned and practical steps to enable concrete measures by the competent authorities.

To this purpose, the Commission has adopted a Guidance to help national authorities to make better use of existing EU Food and Consumer legislation to identify and address unjustified dual standards.

In facts, several pieces of EU legislation are relevant to tackle the issue of dual quality of products.

The guidance lists and explains the relevant requirements from EU food laws and EU consumer laws to which authorities need to refer when analysing a potential dual quality product issue.

In addition to the ‘General Food Law Regulation’ (Regulation (EC) 178/2002) – which aims at ensuring that only safe food products are placed on the EU market and that consumers are accurately informed and not misled as to the composition and characteristics of the food products offered for sale – the relevant principles are set out by:

  • the ‘Food Information Regulation’ – Reg. (EU) 1169/2011 – which lays down general labelling rules and requirements, including mandatory provision of a complete list of ingredients enabling consumers to be fully informed of the composition of the food products;
  • the ‘Unfair Commercial Practices directive’ – Dir. 2005/29/EC – which prohibits unfair commercial practices, and can be applied to practices such as marketing identically branded products in a way that has the potential to mislead consumers.

Based on this legislation, the guidance establishes a step-by-step approach for the national consumer and food authorities to identify whether the producers are in breach of these laws.

Assessing whether a commercial practice is in breach of the UCPD requires a case-by-case assessment. Marketing goods with the same packaging and branding but with different composition and sensory profile could be contrary to the UCPD if it can be demonstrated, on a case-by-case basis, that:

  • consumers have legitimate specific expectations from a product compared to a “product of reference” and the product significantly deviates from these expectations;
  • the trader omits or fails to convey adequate information to consumers and they cannot understand that a difference with their expectations may exist;
  • this inadequate or insufficient information is likely to distort the economic behaviour of the average consumer, for instance by leading him or her to buy a product he or she would not have bought otherwise.

The following flowchart is provided by the Guidance, in order to assess potentially unfair business practice:

The national consumer and food authorities are responsible for ensuring that companies comply with EU laws. However, as this issue concerns practices of business operators across the Single Market and involves a cross border dimension, competent authorities should seek to conduct the above mentioned investigation, when this is appropriate, in a coordinated manner, under the Consumer Protection Cooperation (CPC) Regulation n. 2004/2006.

The European Commission is committed to helping national authorities – in addition to the adoption of the guidelines – also through other different work strands.

The Commission is working on a methodology to improve food product comparative tests so that Member States can discuss this issue on a sound and shared scientific basis that is the same for all. The Commission has made € 1 million available to its Joint Research Centre (JRC) to develop this methodology.

The Commission is also financing further work on the collection of evidence and enforcement by offering € 1 million to Member States for the financing of studies or enforcement actions.

The Commission has started a dialogue with producers and brand associations, who have committed to developing a “code of conduct” for this autumn.

Moreover, the Commission will organize workshops with consumer protection and food safety.

Some remarks from my side:

  • the legitimate intent of the Commission, in my opinion, will be most likely to be frustrated and to raise concerns due to the different interpretations that will arise in the Member States: we already know that ensuring a consistent enforcement of the EU rules is one of the biggest challenges in the single market, but when it comes to act on the basis of concepts like “legitimate expectations of the consumers”, “adequate information”, “distort consumer behavior” and “average consumer” I foresee troubles. Only the time will tell if this guidance will be a useful tool for the enforcement and the EU/national case law will have to help to define such concepts.

Until then – beside gross misconducts – to proof companies’ unfair commercial practices under this framework, it seems to me what jurists call in Latin “probatio diabolica” (devil’s proof): how to substantiate such requirements? Even to link the concept of “adequate information” to the compliance with FIC Regulation could not be enough to reach such proof…and what about the other concepts (debated from decades), like the “average consumer”?

  • in the Commission guidance not enough importance has been recognised to prices’ issues (even if price has been mentioned as a reason for changes in the recipes). What about countries where citizens have a very low disposable incomes? It would be better to supply them different products or do not supply them at all because the price paid does not cover the costs? To me this second option is even more classist…
  • an industry voluntary guidance/code of conduct will be most welcomed, and if discussed with the Commission, the national competent authorities and the other stakeholders involved (e.g. consumers’ associations at EU level), could prevent a lot of puzzling question marks to all the actors involved…
  • develop an analytical standard validated and adequate to all the food categories it seems quite optimistic, and the funding devoted by the EU Commission for that purpose quite limited.

In the end this document, much then solve problems, could raise serious issues for enforcement authorities and stimulate a strong opposition from the industry.