Labelling of food and agri products falls outside the scope of Croatian Competition Agency

Following a number of recent media reactions and allegations calling out the Croatian Competition Agency (CCA) to take necessary steps and measures regarding the alleged improper marking and labelling of certain food and agri products offered and sold in stores and big retail chains, that have been suspected to carry the Croatian certification of origin despite the fact that they allegedly do not come from Croatia, the CCA finds it necessary to provide the following explanations of the matter concerned:

Under the law the CCA is not empowered for the monitoring of proper marking and labelling of food and agricultural products.

The CCA is a legal person with public authority that independently and autonomously performs the activities within its scope and powers regulated under the Competition Act, Official Gazette 79/09 and 80/13, and the Act on prohibition of unfair trading practices in the business-to-business food supply chain, Official Gazette 117/17 (UTPs Act) and ancillary implementing provisions.

Regarding the enforcement of the UTPs Act, its objective and purpose is to establish, ensure and protect fair trading practices that safeguard participants in the food supply chain. Under the UTPs Act the CCA is empowered to carry out administrative procedures and the procedure provided by the UTPs Act where it establishes facts and circumstances related to defining of the total annual turnover of the re-seller, buyer and/or processor. It also conducts the administrative procedure for establishing whether strong bargaining power has been used by imposition of unfair trading practices. It is also empowered to carry out the procedure for establishing whether in individual cases there is a standing to act for the imposition of fines.  Once it has established all the relevant facts and circumstances relating to a particular busines contract and investigated into the content of this contract the CCA decides on the merit of each individual case.

In addition, it must be noted here that the UTPs Act provides for an exhaustive list of precisely defined unfair trading practices as defined under Article 4 to Article 12 of the UTPs Act, which concretely means that where it investigates whether a re-seller, buyer and/or processor used its strong bargaining power by imposing an unfair trading practice, the scope of action of the CCA is limited to the above mentioned black listed practices specifically identified under the UTPs Act.

It must also be noted that the CCA is not empowered to perform the inspection duties of the State Inspectorate, nor does it dispose of the tools available to the State Inspectorate and its inspectors.

Labelling of products is defined under the Consumer Protection Act, Official Gazette 41/14, 110/15 and 14/19 where under Article 5 item 11 “marking and labelling” means any words, particulars, trademarks, brand name, pictorial matter or symbol relating to a product and placed on any packaging, document, notice, label, ring or collar accompanying or referring to such product.

Relating to food labelling, i.e., labelling of food and agri products, and other specific, sensitive products in relation to manufacturing and placing on the market, the following provisions apply: the Act on the provision of food information to consumers, Official Gazette 56/13, 14/14, 56/16  and 32/19; the Regulation (EU) 2015/2283 of the European Parliament and of the Council of 25 November 2015 on novel foods, amending Regulation (EU) No 1169/2011 of the European Parliament and of the Council and repealing Regulation (EC) No 258/97 of the European Parliament and of the Council and Commission Regulation (EC) No 1852/2001, OJ L 327/1 11.12.2015 (hereinafter: Regulation (EU) 2015/2283) and the Act on the implementation of the Regulation (EU) 2015/2283 of the European Parliament and of the Council of 25 November 2015 on novel foods, Official Gazette 15/18 and 114/18 (hereinafter: Act on the implementation of the Regulation (EU) 2015/2283).

Administrative supervision and monitoring of the implementation of the Act on the provision of food information to consumers is carried out by the central state administration authority in charge of agriculture – the Ministry of Agriculture, whereas the State Inspectorate carries out official inspections within the meaning of Article 5 of the Act on the provision of food information to consumers.

With respect to the provisions of the Regulation (EU) 2015/2283 and the Act on the implementation of the Regulation (EU) 2015/2283 it is the ministry of health that is the competent authority in the area of the implementation of the novel foods policy and the conduct of administrative and expert duties, whereas it is the State Inspectorate that is empowered for carrying out of formal inspections in the area of novel foods, in line with Article 5 linked with Article 10 of the Act on the implementation of the Regulation (EU) 2015/2283.

The awareness of the clear distinction in relation to the split powers of the public administration authorities and the CCA and the awareness of the addressed actors about the powers of the inspection services of the State Inspectorate on one hand, and the powers of the CCA, on the other hand, is crucial for the understanding of the matter concerned and particularly for timely reactions of the public administration authorities and the CCA in case of infringements of statutory provisions or violation of good commercial practices, all with the view to eliminating any misconduct and creating favourable conditions in commercial transactions.

In conclusion, taking everything above said into account, particularly the precisely defined powers of the CCA in the implementation of the UTPs Act, the CCA is not empowered to carry out any investigation into the matter concerned or to sanction the alleged practices where any food or agri product is suspected to be and/or is found to be mislabelled and allegedly marketed and sold. In this sense, the CCA is in no way whatsoever empowered to monitor the authenticity or accuracy of the food label.