Who: Verband Sozialer Wettbewerb eV v Tofu Town.com GmbH
Where: European Court of Justice – Request for a preliminary ruling from the Regional Court, Trier, Germany
When: 14 June 2017
Law stated as at: 27 June 2017
TofuTown is a vegetarian/vegan food manufacturer that produces plant-based alternatives to dairy products including “plant cheese”, “soyatoo tofu butter”, “veggie cheese” and “rice spray cream”. VSW is a German association that brought an action against TofuTown on the grounds of unfair competition.
VSW claimed that the product designation “milk” and other dairy products like “cheese”, “cream”, “butter” and “yoghurt” must be derived from the mammary secretion of a cow or other specified animal species. Tofu Town argued that consumers understand the plant-based dairy-alternative market and where a dairy designation was used it was never in isolation, but always linked to the plant-based material the product derived from.
The ECJ distilled the three questions from the referring court to essentially whether Regulation 1308/2013 should be interpreted as meaning that a dairy description could only be used exclusively for “milk” products in labelling, marketing and advertising and could not be used for a plant-based product even if there were additional clarifying terms.
Regulation 1308/2013 does permit certain exceptions but these have been submitted by member states based on common usage and understanding in that country. Included within the exceptions is “crème de riz”, but the ECJ did not agree that this exception could apply to “rice spray cream”; the former being a product described and understood by its French term and not by an English translation.
The Court applied a strict interpretation of the Regulation and confirmed that the terms “milk” and milk product descriptions (eg. “cheese”, “cream” and “butter”) cannot be applied to a purely plant-based product and that none of the Tofu Town products fell within the permitted exceptions.
Why it matters:
There has been huge growth in alternative-dairy products in the last few years, fuelled by consumer demand. This ruling is a very strict interpretation by the ECJ on when the term ‘milk’ and other milk product descriptions can be used in labelling, marketing and advertising. For manufacturers of alternative-dairy products the law is now clear that, unless it falls within one of the exceptions, the designated terms cannot be used to describe the product.
The Court noted that the purpose behind the Regulation is to protect consumers and provide the right conditions to maintain competition. If these designations did not exist, the Court felt there was a risk of consumers being confused and the objective of improving the economic conditions for the production and marketing of milk and milk-based products would not be met.
However, this case does not comment upon alternative names that do not use one of the designated descriptions. Therefore we are likely to see some products changing their names or marketeers becoming more creative with the names of alternative-dairy products. What is deemed acceptable will need to be determined on a case by case basis. The important thing is to ensure that consumers are not misled and they have clarity about what the product actually is.