Jun 7, 2018

A few days ago, the Los Ríos Regional Ministerial Health Secretariat, following a claim filed by a local association of milk producers against two supermarkets in Valdivia, decided to fine one of them for marketing certain plant-based liquid products as "milk", a term associated with something else entirely. This news revealed that the heated discussion going on elsewhere around the world about the use of animal origin denominations for the commercial distribution of plant-based foodstuffs has now reached Chile.

In France, Bill 627, "for the balance of trade relations in the agricultural and food sector and healthy and sustainable food", is currently under consideration. The objectives of this bill include, among others, access to healthier food and respect for animal welfare. To achieve these goals, the measures envisage a range of measures including extending the ban on certain insecticides—questioned for their adverse effects on the ecosystem, especially with respect to honeybees—, promoting animal protection in abattoirs, and raising awareness of animal welfare in the training of farmers.

The bill also contains measures to prohibit certain commercial practices considered misleading to consumers. In particular, in April of this year, an amendment to modify the Rural and Maritime Fisheries Code was incorporated into the aforementioned bill to prohibit the use of names associated with animal products in the marketing of foods containing a significant portion of plant-based matter. If the current wording of the bill is approved, violations to this obligation will be sanctioned in accordance with the provisions of the Consumer Code governing "misleading commercial practices"; these rules provide for both pecuniary penalties (300,000 euros) and imprisonment (two years' imprisonment). The bill grants the Agriculture Ministry the powers to decree the establishment of the list of designations and the maximum amount of plant-based matter for a product to retain the designation associated with an animal-based foodstuff.

Given how broadly the bill has been drafted, theoretically all foods containing a significant percentage of plant matter would be prevented from being marketed under names associated with animal products. The French press has pointed out that, as a result, names such as "soy meat" or "vegan cheese" would be banned. Similarly, whenever expressions such as (“fillet”), “bacon” or sausage (“saucisse”), are used, they must refer to animal products only. The same would apply to names such as "milk", "cream" or "cheese".

This bill expands on a criterion contained in a ruling of the European Union Court of Justice of 14 June 2017, which, in its interpretation of European Regulation 1308/2013, which created the common market organisation for agricultural products, specified that "the name 'milk' and other names reserved exclusively for dairy products cannot legally be used to name a product that is purely plant-based." According to this ruling, not even explanatory mentions of the vegetable origin of a foodstuff would entitle it to be labelled as something associated with an animal-based product. However, this bill would go even further, as it seeks to extend this reservation of denomination to all animal origin foodstuffs, in addition to preventing its use not only for purely plant-based products, but also for products that contain significant proportions of plant-based matter.

What is the situation in Chile? Section 105 of the Health Code entrusts the regulatory authority with the task of determining which characteristics foodstuffs intended for human consumption must meet. To this end, the Food Sanitary Regulations ("Regulations") define terms such as “milk” (article 198), “meat” (article 268), “cold cut” (article 295), “hamburger” (article 300), “ham” (article 304) or “sausage” (article 306), etc. In all these cases, the definitions refer to products of animal origin. Furthermore, Section 107(a) of the Regulation stipulates that the name of the foodstuff must indicate its "true nature", and that substitute products must declare this condition. This same provision further stipulates that appropriate wording next to the name must be included to avoid misleading consumers or deceiving them as to the physical nature and condition of the foodstuff. Violations of this obligation may give rise to a sanitary summary investigation proceeding, leading to fines, closure of establishments or cancellation of operating authorizations or permits, among other sanctions, “notwithstanding (...) the responsibilities established by other legal bodies with respect to the facts" (final paragraph of Section 174 of the Health Code).

A preliminary analysis of this matter reveals that the domestic sanitary regulation is less strict than the French bill in question. First of all, because although the Regulation requires the name to reflect the specific nature of the foodstuff (so that failure to comply with this obligation may give rise to a "counterfeit food" scenario), it simultaneously allows the inclusion of words that avoid misleading or confusing the consumer. Second, because the sanctions contemplated in the Health Code, including those covered by its reference to "other legal bodies" (in particular, the Consumer Protection Law), are not qualitatively or quantitatively comparable to those contained in the Consumer Code. However, the case in Valdivia could prompt a deeper review of our regulation, as well as the way it is understood and applied by the health authority. This is evidenced by the recent introduction of a bill in the Chamber of Deputies to regulate the labelling of dairy products or milk derivatives.

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