International Commercial Law Blog

By authorising the use of the name “pure chocolate” Italy has infringed EU Law

The European Court of Justice (see judgment in Case C-47/09 Commission v Italian Republic) finds that Italy has failed to fulfil its obligations under EU law concerning the labelling of cocoa and chocolate products which harmonises the sales names for such products (see Directive 2000/13/EC of the European Parliament and of the Council of 20 March 2000 on the approximation of the laws of the Member States relating to the labelling, presentation and advertising of foodstuffs Directive 2000/36/EC of the European Parliament and of the Council of 23 June 2000 relating to cocoa and chocolate products intended for human consumption).

The Commission brought infringement proceedings against Italy before the Court of Justice, claiming that Italy has introduced an additional sales name for chocolate products, depending on whether they can be regarded as “pure” or not, which constitutes an infringement of the directive and conflicts with the case-law of the Court. According to the Commission, the consumer must be informed whether or not substitute vegetable fats are present in the chocolate through the labelling and not through the use of a separate sales name.

Where they contain up to 5% of vegetable fats other than cocoa butter (“substitute vegetable fats”), their name remains unchanged but their labelling must display, in bold lettering, the specific statement “contains vegetable fats in addition to cocoa butter”.

In the case of chocolate products containing only cocoa butter, that information may be given on the labelling, provided the information is correct, neutral, objective, and does not mislead the consumer.

Under the Italian legislation, the phrase “pure chocolate” may be added to or incorporated in the sales names, or indicated elsewhere on the labelling of products not containing substitute vegetable fats, and administrative fines are laid down for any infringement of those rules.

The Court notes as a preliminary point that the European Union has introduced full harmonisation of sales names for cocoa and chocolate products in order to guarantee the single nature of the internal market. Those names are both compulsory and reserved for the products listed in the EU legislation. That being so, the Court holds that that legislation makes no provision for the sales name “pure chocolate” and does not permit its introduction by a national legislature. In those circumstances, the Italian legislation runs counter to the system of sales names created by EU law.

The Court notes also that the system of double names introduced by the Italian legislature does not comply either with the requirements of EU law concerning the need for the consumer to have information that is correct, neutral and objective, and that does not mislead him.

The Court has heldthat the addition of substitute vegetable fats to cocoa and chocolate products which satisfy the minimum contents required under EU legislation does not substantially alter their nature to the point where they are transformed into different products and therefore does not justify a difference in their sales names.

The Court holds, however, that, under EU legislation, the inclusion elsewhere in the labelling of a neutral and objective statement informing consumers of the absence from the product of vegetable fats other than cocoa butter would be sufficient to ensure that consumers are given correct information.

Consequently, the Court concludes that, to the extent it enables the coexistence of two categories of sales names essentially designating the same product, the Italian legislation is likely to mislead consumers and thus interfere with their right to obtain correct, neutral and objective information.

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Incoterms 2010

The Incoterms rules have become an essential part of the daily language of trade. They have been incorporated in contracts for the international sale of goods and provide rules and guidance to importers, exporters, lawyers, transporters, insurers and students of international trade.

The purpose of Incoterms is to provide a set of international rules for the interpretation of the most commonly used trade terms in foreign trade. Thus, the uncertainties of different interpretations of such terms in different countries can be avoided or at least reduced to a considerable degree.

Frequently, parties to a contract are unaware of the different trading practices in their respective countries. This can give rise to misunderstandings, disputes and litigation, with all the waste of time and money that this entails.

In order to remedy these problems, the International Chamber of Commerce first published in 1936 a set of international rules for the interpretation of trade terms, first conceived in 1921.

These rules were known as “Incoterms 1936″. Amendments and additions were later made in 1953, 1967, 1976, 1980, 1990, 2000 and presently in 2010 in order to bring the rules in line with current international trade practices.

As of 1 January 2011 the eighth edition, “Incoterms 2010″, shall have effect. Among other changes therein affected all of the five terms in section D are obsoleted and replaced with the following three: DAT (Delivered at Terminal), DAP (Delivered at Place), and DDP (Delivered Duty Paid). Such new terms apply to all modes of transport.

Rules for any mode or modes of transport:

  • EXW   Ex Works
  • FCA    Free Carrier
  • CPT     Carriage Paid To
  • CIP     Carriage And Insurance Paid To
  • DAT    Delivered At Terminal
  • DAP    Delivered At Place
  • DDP    Delivered Duty Paid

Rules for sea and inland waterway transport:

  • FAS     Free Alongside Ship
  • FOB    Free On Board
  • CFR    Cost And Freight
  • CIF     Cost, Insurance and Freight

It should be stressed that the scope of Incoterms is limited to matters relating to the rights and obligations of the parties to the contract of sale with respect to the delivery of goods sold (in the sense of “tangibles”, not including “intangibles” such as computer software) as they help traders avoid costly misunderstandings by clarifying the tasks, costs and risks involved in the delivery of goods from sellers to buyers.

The current Incoterms 2000 rules are endorsed by UNCITRAL.

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