Undoubtedly, one of the main objectives of the European Union is to ensure the free movement of goods, respectively the creation of a single market that promotes innovation in product markets and the creation of more opportunities for businesses, as well as greater choice for consumers in Europe.
As consumers have the freedom to buy products of their choice, economic operators should also have the freedom to market and sell the goods they produce with different compositions and/or characteristics, provided that they comply with EU law.
It is, however, a worrying situation when seemingly identical goods with differences in their composition and characteristics are offered and consumers are thus being misled into making a purchase decision that they would not otherwise make. By misleading consumers and distorting demand, the proper functioning of effective competition in the relevant markets is jeopardised.
The issue of differences in the quality characteristics of products is directly linked to the nature of the functioning of the single market and to consumer trust. In other words, consumers make an associative link between brands, products and quality and therefore expect a product of the same brand and/or appearance to conform to the same quality standard, regardless of the Member State in which it is sold.
Although the matter concerns supply and demand, it should be acknowledged that there are cases in which the same goods, marketed as identical but having different quality, taste, texture or other characteristics, are sold at prices that vary considerably in the different Member States and that in some cases higher prices are charged for lower-quality products. Concerns have also been voiced that laboratory results have confirmed that lower quality products may contain less healthy combinations of ingredients, which constitutes an infringement of the principle of equal treatment of all consumers and puts their health at risk.
Until recently, EU law did not contain explicit provisions on the marketing of dual-quality goods. The EU relied on the application of existing legislation governing other public relations indirectly related to dual-quality goods to regulate the matter. This was expected to be achieved through the established food safety guarantees, on the one hand, and by improving consumer awareness of the marketing of goods, on the other, as well as through mechanisms to ensure that consumers are not being misled or exposed to aggressive marketing.
Regrettably, the application of such an indirect and unfocused approach by the EU in seeking a solution to the supply of dual-quality goods did not achieve the desired result. This was confirmed by a study conducted by the European Commission in mid-2019 which found differences in the ingredients for about one-third of the tested foods that were not clearly displayed on the product labels. In early 2021, it was established that in more than half of all tested products, there were significant taste differences in the national versions of the same products.
In response to the emerging need for explicit regulation of the supply of goods with different quality characteristics, the European Union, acting through its legislative bodies, adopted Directive (EU) 2019/2161 of the European Parliament and of the Council of 27 November 2019 amending Directive 2005/29/EC of the European Parliament and of the Council concerning unfair business-to-consumer commercial practices. A provision has been added according to which offering identical goods bearing the same brand name in different Member States if there are “significant differences in composition or characteristics” is to be regarded as a misleading commercial practice. Although the wording of the provision leaves room for interpretations in various aspects, it also provides for a legitimate exception where the law or objective factors justify the existence of such a difference. In either, however, neither a definition nor criteria have been elaborated, which makes the strict application of the provision difficult in practice.
It is further unclear how national authorities should assess and approach each case, which is a major stumbling block in the application of Community law.
It would be useful as it is crucial to address the issue of dual quality through the adoption of rules that provide consumers with accurate and easy-to-understand information on the differences in product composition. In order to avoid the risk of consumers being misled, rules could also be envisaged to prohibit (where a company intends to place a product on the market of different Member State that differs in terms of its characteristics from the local ‘original’) such a product from being labelled and branded in an apparently identical way. In this context, manufacturers could introduce a logo on the packaging indicating that the content and quality of products of the same brand are the same in different Member States.
It remains to be seen whether the new explicit, yet concise, legislative approach of the European Union will minimize the marketing of goods as identical despite having different composition and/or characteristics, as the transposition of the amendments by Directive (EU) 2019/2161 should be completed by the Member States by 28 November 2021.
In this regard, a draft law amending and supplementing the Consumer Protection Act has been drawn up which will be tabled to Parliament for consideration once the public consultation has been concluded.
It nevertheless seems that the Bulgarian lawmaker has once again only reproduced the provisions of the Directive verbatim, taking a highly formalistic approach to fulfilling its obligation to transpose the relevant requirement in national law. However, as we have pointed out, this is unlikely to achieve the desired goal of precluding the sale of products with the same brand that differ in terms of their quality characteristics. Moreover, the requirement to point out certain differences in small print on the label cannot be regarded as a solution to the problem. It is necessary for the national Parliament to regulate the matter in a way which effectively ensures that the goods sold are of the same quality. Of course, no effort should be spared for clear regulations from the European Union in this regard, as current rules are clearly incapable of solving the problem.
Vencislav Semkov
