On April 5, 2005, European Court of Justice (ECJ) Advocate General (AG), Leendert Geelhoed, issued an opinion on the Food supplements directive, noting that European Community (EC) laws restricting access to food supplements are “seriously deficient” and establish a procedure with the transparency “of a black box.”
The ECJ heard two parallel cases, one brought by the Alliance for Natural Health (ANH) and Nutri-Link Ltd., and the other brought by the National Association of Health Stores (NAHS) and the Health Food Manufacturers Association (HFMA), both actions in challenge to the European Food Supplements Directive (EFSD) exclusion of non-positive list nutrients.
The industry and consumer coalition was, according to the ANH, “not seeking to overturn the FSD as a whole but only the prohibition against the sale of any non-positive list goods (‘the ban’) in Member States which might otherwise allow their sale.”
As we know, the 2002 EFSD would limit vitamin and mineral supplements to either Annex I or Annex II of the approved list as of August 1, 2005. According to the Council for Responsible Nutrition (CRN), “the law could, based on virtually no scientific evidence, ban more than 5,000 products including natural forms of vitamin E and several forms of vitamin C.”
Opening the black box: the Advocate General’s findings
The Advocate General wrote that “the Directive infringes the principle of proportionality, because basic principles of Community law, such as the requirements of legal protection, of legal certainty and of sound administration have not been properly taken into account.”
“I must conclude the (European Parliament) has seriously failed in its duty to design such a far-reaching measure with all due care,” noted Geelhoed.
Geelhoed remarked that the EFSD is “seriously deficient” because it did not offer a clear standard for supplements to be added to the approved list; did not make it clear if manufacturers could submit ingredients for approval; and gave no clear procedure for those submissions. The AG also said that the Directive failed to “explain how interested parties could be heard, set any deadlines for decision making or even guarantee decisions on proposed substances would be taken.”
He concluded that the “Directive is, therefore, invalid.”
In an April 5, 2005 memo to members, CRN wrote that, “Although the Court is not obliged to follow AG opinions, in practice it does so in most cases, usually several months later. In this matter, a full Court opinion is expected in July.” It should also be noted that, according to http://www.eupolitix.com/, “the Advocate General said the directive could be valid if the commission were to amend these deficiencies.”
Some industry analysts feel that this ruling is an affirmation of the Draft Standard for Vitamin and Mineral Supplements approved by the Codex Committee on Nutrition and Foods for Special Dietary Uses (CCNFSDU) in Bonn, Germany, last year. Mark Mansour, a partner at Washington, DC-based Morgan Lewis and counsel to CRN, wrote that, “This decision is a striking refutation of the contention often repeated in many quarters in Brussels that regulation lacking proportion, fairness and appropriate empirical underpinnings not only can be fed on a silver platter to EU consumers, but exported to every other corner of the world. As it turns out, precautionary principle-based regulation has, yet again, given European courts indigestion at first bite.”
Where it gets tricky
One area that has not been discussed is what will be the status of derogation requests that have been granted to specific ingredients and referred to the European Food Safety Authority (EFSA) for EU-wide approval? (especially since many companies have, in good faith, supported these safety dossier submissions with a commitment of tens or hundreds of thousands of U.S. dollars in developing and submitting EU dossiers through the existing EFSD process with the existing approved list). Nobody really knows the answer to this question.
Another issue is the potential affect of otherEuropean Court decisions on the Directive. One case that has been cited by certain observers is the February 2004 EC judgment on the Greenham and Abel case (Case C-95/01, 6 th Chamber).
In this case, there were fortified nutritional products distributed by a U.K.-based company that were sold in France in 1998, well before the EFSD was established. Now although the “free movement of goods between Member States is a fundamental principle of the EC Treaty,” the 2004 decision found that national restrictions “may be authorized.” The European Court interpreted Articles 28 EC and 30 EC as not preventing one European country from “prohibiting the marketing without prior authorization of foodstuffs lawfully manufactured and marketed in another Member State, where nutrients such as vitamins and minerals have been added thereto other than those whose use has been declared lawful in the first Member State.”
The only partially redeeming aspect of the decision held that “refusal to authorize marketing” musts be based on a detailed assessment of the risk to public health based on the most reliable scientific data.” Now while some will say that the matter on which this case is based was pre-Directive and, therefore, not relevant, the actual decision was rendered in 2004, two years after the Directive was established.
Some European observers feel that the scenario that could potentially arise here is that of the (soon-to-be) amended Directive being blocked on passage through European Parliament and then, rather than losing the safe harbor for food supplements as a category of food, the European Parliament could instead allow the case law laid down by Greenham & Abel to become the “baseline” for food supplement/medicine classification EU-wide. How this would play out via-a-vis EU-wide approvals on ingredients from EFSA remains to be seen.
According to Mark A. LeDoux, chairman and CEO of San Marcos, Calif.-based Natural Alternatives International, and also chair of CRN’s International Trade and Market Development Committee, “I think that some consideration should be given to the ECJ's activities in promoting the freedom of trade within the community by bringing several member states to court and in each case chastising the member state for coming up with barriers to product trade that use hollow reasoning often reflecting domestic market protectionism to restrain trade.”
“The Greenham case […] has certain significance since it was rendered in response to French government action,” said LeDoux. “There are other cases involving other member states where the consistent message of theEuropean Court to each member state is to stop erecting or maintaining barriers to the free trade of supplements produced for consumption within the European Community. The jurists keep making the point that the reason for harmonization of trade within the community is to remove the 'parochialism' of the individual member states regulatory schemes. These systems were set up ostensibly to 'protect the consumer' but, in practice, they often protect the chain of distribution participants, which generally yields a more costly product than in open markets where consumers enjoy considerable choice.”
EU structural and trading integrity at risk
Mansour agrees, and warns that, “The European Union's structural integrity, as well as a global trading bloc, are at stake in these and the myriad other issues like them across all sectors of the economy.”
”If it proves to be the case that [EU] member states can flout decisions made at the Commission level for purposes of maintaining parochial and inconsistent, not to mention violative, trade-protection regimes, then the entire global trading system will be rendered impotent and industry, economic growth and jobs all will suffer,” added Mansour.
Mansour further noted that, ”We have a commerce clause in our [U.S.] Constitution that for the most part (I hedge here, because California regularly violates it with impunity) keeps our states from doing just what EU member states are doing. California's flights of fancy are damaging enough to the overall economy. Can one imagine what it would be like for the global economy if every state did as it pleased? If the federal government sued California on pre-motion grounds over Proposition 65 and won, there is no doubt California would accede. We have no such assurances that any EU member state would go down without a protracted fight, if at all, in the face of a negative ECJ ruling.”
”Until that state of affairs is rectified,” Mansour concluded, “we will continue to have these festering issues, and they will be exacerbated with the addition of each new MemberState.”
The bottom line
The important role of European case law aside, there are three main scenarios as to how the final ruling will come down:
(1) the AG’s opinion is completely rejected and everything stays status quo;
(2) the Directive is “blue-penciled,” or edited, in the areas found deficient; or
(3) the Directive is completely overturned, which would revert ingredient approval back to national standards while a new Directive is drafted and put in place.
The second option is where the ECJ will most likely go, a scenario in which the Directive is edited, perhaps made less restrictive and over-reaching in its approach, perhaps involving a broadening of the approved list and possibly providing for a more clear and transparent process overall.
We must all wait and see, as this is a new Directive and an unfamiliar process for all involved. We can be encouraged, meanwhile, by these words, circa 218 B.C., from Hannibal Barca, “We will either find a way, or make one.”