Romania Suspends Unclear Food Waste Law

Today I receive and publish an interesting contribution about the recent “food waste” law recently entered into force in Romania, coming from Oana Constantinescu and Toma Barbărasă (respectively partner and attorney at law at Schoenherr si Asociatii SCA).

After France and Italy to my knowledge that is the most concrete attempt in EU to mitigate the problem by law: the path seems nonetheless paved of difficulties. Compared to the Italian legislation (already covered on this blog) a point of merit is the provision of sanctions; but the negligible amounts of the fines could foster the lack of application of the law.

It will be extremely useful to follow the developments of these bills and try to measure the impact of them in the mid-term, since doubts on their real effectiveness seems to remain.

A new law meant to fight food waste in Romania came into force in late May but is now inapplicable, as its provisions are unclear and application norms have yet to be published.

On 21 May 2017, Law 217/2016 on Food Waste Reduction entered into force (the “Law“). The Law aims to reduce food waste by imposing measures on all operators in the food industry.

The issues

In its current form, the Law has already raised concerns about its scope as well as the practical measures that operators need to take in order to comply with it.

For instance, it is not clear which entities must comply with the Law, as the Law stipulates that it applies to operators in the agri-food sector without defining who these are. This may raise more difficulties, since the Law only refers to enterprises (in terms of applicable sanctions), but does not define them.

In addition, the Law does not provide a definition for products that are close to expiry. This is important, since a clear distinction needs to be made between highly perishable products that can only stay a few days before becoming unsafe and products with a longer validity.

Another cause for concern is the lack of clear procedures, as food operators are given no guidelines or instructions on how to implement the measures in practice. Of course, each operator must assess its activity on a case-by-case basis and proceed depending on the products and its specific activity.

All of these issues are meant to be resolved through the application norms, which were supposed to be drafted by 21 May 2017, but have now been pushed back pending analysis.

In the beginning of June, the Ministry of Agriculture issued a statement saying that the legal mechanisms included in the normative act cannot be applied and that the enforcement of the law is postponed until further notice.

Outline of the measures imposed

Under the Law food operators must take the following effective measures:

  1. Accountability measures for the reduction of food waste in the entire agri-food chain, from the manufacturing stage to the marketing stage, and to the final consumer;
  2. Low-priced sale measures for products close to expiry;
  3. Transfer measures by donation or sponsorship for products close to expiry; such transfers shall be made to entities specifically registered in this respect;
  4. Measures for the direction of by-products not intended for human consumption under Regulation (EC) 1774/2002, under certain conditions, for the disposal of animal by-products;
  5. Measures for the direction of agri-food products unfit for human or animal consumption by transformation into compost;
  6. Measures for the direction of agri-food products unfit for human or animal consumption for their transformation into biogas;
  7. Measures for the direction of by-products left after going through the above stages to an authorised neutralising unit.

The Law gives food operators the opportunity to offer nearly expired products to associations, foundations and social enterprises. It also sets maximum amounts in this respect, namely 3 % + VAT of the purchase price (for food marketers) or of the production price (for food manufacturers or processors). In their turn, associations and foundations may market the offered products at maximum 25 % + VAT of the purchase price (in case they receive the products from food marketers) and at maximum 25 % + VAT of the production price (in case they receive the products from food manufacturers or processors).

Sanctions

Operators who fail to observe the above measures will face fines ranging from RON 1,000 to RON 10,000 (approx. EUR 220 to EUR 2,200). The fines depend on the size of the entity, i.e. big enterprises will face higher fines.

Conclusions

Although the Law officially came into force on 21 May 2017, its provisions are not clear enough to be applicable in practice. Moreover, the Ministry of Agriculture and Rural Development had the legal obligation to enact application norms for the Law before 21 May 2017. Although the norms were initially published on the Ministry’s website for public debate, they are now no longer available.

A serious issue that the Law may trigger is so-called parallel trade caused by the obligations imposed on operators. On the one hand, operators must donate or sell products close to expiry at a low price. On the other hand, associations and foundations that purchase these products at a low price may then market them at maximum 25 % + VAT of the purchase/production price. Since the Law sets a maximum value for the latter, there is a risk that the price may raise competition issues by becoming fixed, thus affecting operators on a free market.

Obviously the Law will have a major impact on all players in the agri-food sector. A deeper analysis of the impacts will be required before the issues (or at least some of them) can be resolved.

Oana Constantinescu and Toma Barbărasă (respectively partner and attorney at law at Schoenherr si Asociatii SCA)

 

Frutarom Health BU Builds Innovation on Four Foundations

Frutarom Switzerland Ltd., Health BU Switzerland, is making a strategic move in the global nutraceutical and functional food market to better address customers’ needs. The strategy is based on four critical foundations: innovation, natural ingredients, research and responsible sustainability.

“We made significant investments in the last year to improve our plants in Switzerland and North Bergen, N.J., to provide high-quality, sustainable natural ingredients,” says Holger Riemensperger, General Manager of Frutarom Health BU. “We also sponsored several clinical research trials on specific nutraceuticals, plus our R&D team developed several innovative ingredients intended for world-wide launch this year. We are attentive to our customers’ needs and seek for smart ingredient solution to address specific health conditions and market trends in functional food and supplements.”

Frutarom will publish during 2014 research results for several clinical studies covering the health benefits of:

* Neuravena® – patented wild green oat extract for cognitive health

* Pelargonium® – a natural root extract for immune health

* LinumLife® – flax lignan ingredient for men health

* Go-Less®- a proprietary blend of extracts to support bladder wellness

Frutarom Health BU will continue developing new studies to carry on the reinforcement of the comprehensive proprietary scientific data, which remain the core driver for Frutarom Health BU. Science is key to prove product efficacy and push new products through future health regulations, which appear to become more and more rigorous.

Research and continuous innovation, led by market knowledge and business understanding are one of the key success factors of Frutarom Health BU. The development and launch of innovative natural-based ingredients will be very important this year with several new ingredients in the pipeline.

“Frutarom intends to launch from five to seven proprietary natural ingredients in 2014, and boost health and sales growth among existing and new customers,” adds Riemensperger. “We also intend to expand the market of our nutraceuticals to pharmaceutical companies and so are in the process of attaining the highest pharmaceutical certifications.”