Retail and Consumer Goods09.10.2020 Newsletter
"Vegan" and "vegetarian" foods: Liability risks for manufacturers
For consumers, it is a reliable orientation aid when making their purchase decision; for companies, it is a sign of transparency and product innovation. But caution is required: what are the legal framework conditions for labelling vegetarian and vegan products? What do companies have to take into account when naming products and to what extent may the names of so-called meat substitute products be based on their respective role models?
According to estimates and surveys, about 5% of the German population is vegetarian and 1% vegan. Worldwide, the number of people who are vegan/vegetarian is estimated at one billion, and the trend is one the rise. It therefore comes as no surprise that sales of vegetarian and vegan products at food retailers and drugstores have reached record levels. The growing market offers future-oriented companies an opportunity to establish themselves as manufacturers of these products. That this can be achieved has been demonstrated by the food manufacturer "Rügenwalder Mühle”. Traditionally known for its meat and sausage products, the company now has over 30 vegetarian and vegan alternatives in its range. What began as a gamble has since turned into a success story. In the fiscal year 2019, the company generated sales of 242 million euros, an increase of 14.7% over the previous year. In July 2020, for the first time, more sales were in fact achieved with vegetarian and vegan meat alternatives than with classic meat products.
Legal framework conditions
The motives for a vegan/vegetarian lifestyle are numerous and the economic potential of this "new customer group" enormous. However, most consumers who have discovered the vegetarian and vegan lifestyle for themselves (or who reduce their meat consumption) have no wish to preoccupy themselves with the list of ingredients, which is usually cryptic for laymen, let alone ask the manufacturer whether certain additives and aromas originate from animals. For this reason, they orientate themselves towards labels that clearly identify the product as vegan/vegetarian - through so-called veggie labels or statements such as "purely plant-based", "vegetarian" or "vegan".
No legally binding definition
Vegan and vegetarian foods are also subject to the general food labelling regulations. They are to be labelled in such a way that consumers can make an informed choice when making their purchases and, in particular, that they are not misled about the characteristics of vegan/vegetarian foods.
There is no special legal obligation to label vegan/vegetarian food. Nor are the terms "vegetarian" and "vegan" defined in food law. The German Food Code Committee (Deutsche Lebensmittelbuchkomitee, DLMBK) adopted new guidelines for vegan and vegetarian foods that are similar to foods of animal origin in 2018, which define the terms "vegan" and "vegetarian" in relation to foods. However, these guidelines are neither legally binding for companies in the food business nor can they be viewed as a firm catalogue of criteria.
The labelling of vegetarian and vegan food is a complex field which, from a legal point of view, bears risks that should not be underestimated: for example, can a product be labelled and advertised as 'purely plant-based' or 'vegan' if it contains vitamin D produced from wool fat, i.e. the secretion from the sebaceous glands of sheep? Strictly speaking, no. The product certainly would not be suitable for resolute vegans. Since the advertising of a product as "vegan" constitutes a competitive advantage, such incorrect labelling could attract the attention of competitors as well as the consumer advice centre.
One possible solution could be to offer recognised quality seals, such as the V-label (stylised green V, from which a leaf grows, on a yellow background) of the European Vegetarian Union e.V. (EVU), which clearly identifies vegetarian and vegan products. More stringent requirements are imposed on the use of the V-label in order to ensure clarity for consumers and certainty for companies. This includes a quality assurance inspection of the manufacturers, annual inspection of products at the production site and verification of the ingredients and auxiliary materials used. In addition to the V-label, there are other quality seals with which vegan products can be labelled and which offer protection for both consumers and companies. This includes, for example, the Vegan Trademark [“Veganblume"] of the Vegan Society, or the Vegan-Label of the Vegane Gesellschaft Deutschland e.V.
The question of the labelling of vegan/vegetarian foods also raises the question of the (legally) correct designation of the food.
Because new life concepts lead to new consumer needs, the production of so-called "substitute products" has increased significantly in recent years. The marketing of these products is based primarily on establishing linguistic associations with typical meat and dairy products. From a legal point of view, however, this poses a problem.
According to European law, the designation milk is "reserved exclusively for the product of normal udder secretion obtained by single or multiple milkings, without any addition or withdrawal". Furthermore, a product may also be advertised as 'milk' if natural milk constituents are subsequently removed or added to the product without changing its composition. According to European law, the term milk may also be used together with one or more words describing the changes themselves.
The European Court of Justice (ECJ) had to answer the question whether the name milk could also be used for the marketing of vegan products. This was negated by the ECJ. Descriptive words such as soya or tofu are not clarifying terms within the meaning of the European regulation, as they do not describe a change in the milk. The use of terms such as soya milk or oat milk is therefore not permitted. The ECJ also stated that designations such as whey, cream, butter, buttermilk, cheese, yoghurt or cream are reserved exclusively for the marketing of dairy products and, accordingly, may not be used for purely plant-based products such as tofu or soya. The designation 'tofu cheese' is therefore also prohibited. Under European law, however, an exception to this rule applies to products, where the nature of the product is precisely known on grounds of its traditional use, such as common product names such as coconut milk, peanut butter or meat loaf.
Translator’s Note: The German word for „meatloaf“ is „Leberkäse“, which literally translates as „liver cheese“.
At the European level, there are no decisions or regulations for meat that correspond to the restrictions for dairy products. National law must be applied here.
According to Art. 7 of the Food Information Regulation (FIR) and § 11 of the German Food and Animal Feed Code [Lebensmittel- und Futtermittelgesetzbuch, LFGB], information about food may not be generally misleading. According to Art. 7 (1) lit. a FIR, this is especially the case with regard to the properties of the food. In this connection, the Administrative Court [Verwaltungsgericht, VG] of Gelsenkirchen states in its decision of 19 March 2012 (docket number: 19 L 145/12) that it is now common practice and in line with the public’s perception for vegetarian meat substitutes to be marketed using the designations of typical meat products. To the extent such products are labelled with indications such as "meat-free" or "meatless", there is no infringement of the prohibition of misleading information under Art. 7 FIR or § 11 LFGB.
According to Art. 17 (5) FIR in conjunction with Annex VI Part A No. 4 FIR, however, in the case of foodstuffs in which a customary component or an ingredient expected by the trade has been replaced by another substance, the replacement must be clearly indicated in the immediate vicinity of the product name in addition to its inclusion in the list of ingredients on the label. This requires a further remark in addition to the product name. A component of the product name indicating the substitute is not sufficient. According to the provision, the mere designation as "vegan" or "vegetarian" in the product name with no further explanation does not satisfy the legal requirements, because it does not disclose which natural or customary ingredient has been replaced by what. For this reason, the designation as "vegan salami" is not permitted, whereas the product may be advertised as "salami-style vegan tofu sausage".
This is also confirmed by the DLMBK's guidelines which, in addition to containing definitions for "vegan" and "vegetarian", also provide orientation for the designation of vegan and vegetarian foods. According to this, the front of the product packaging must bear the word 'vegan' or 'vegetarian' and the substitute product used, such as 'tofu', 'soya' or 'seitan', in a clearly visible and legible manner. Although specific sausage or meat designations should be avoided, similarities to sausage or meat products can be indicated by providing additional information such as "...in the style of beer-ham" if there is sufficient sensory correlation with the imitated product.
The current legal situation for manufacturers in this up-and-coming market segment can sometimes still be very opaque. There are non-binding guidelines, which can serve as a guide. But due to the merely fragmentary legal regulation, companies in this sector may face considerable liability consequences if they falsely advertise their products. Good legal advice can significantly reduce companies’ risks here.