Politics trumped experts in battle over French food labels

Documents show Brussels was warned a big gesture to French farmers could undermine the single market but proceeded anyway.

French exceptionalism is alive and well when it comes to EU food policy.

Documents obtained by POLITICO show that the European Commission defied warnings from its own technical and legal experts on a highly contentious aspect of food regulation in a big political gesture to France before this year’s make-or-break French presidential election. Brussels allowed Paris to roll out compulsory origin labels on food last year that require companies to display where milk and meat products come from.

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That political concession to France — and its all-powerful farmers — means Brussels broke one of its oldest taboos. The European Commission traditionally opposes obligatory “made in” labels as a threat to the harmonized single market, arguing they encourage consumers to buy local. Compulsory French labels could destroy farming jobs in neighboring countries.

“The measure manifestly lacks justification from a legal point of view,” the Commission’s internal market department DG GROW said in a June 2016 review, adding that the scheme would damage both the single market and international food businesses.

Yet France announced a month later that it had the green light for mandatory origin labels on dairy and processed meat products for two years.

European Commission President Jean-Claude Juncker had painful political realities to consider in 2016: France was in the grip of a devastating dairy crisis that collapsed milk prices, bankrupted farms and led hundreds of farmers to commit suicide. Most worryingly for the European project, anti-EU National Front leader and presidential candidate Marine Le Pen was building support among the worst hit rural communities.

Through requests for Commission documents, POLITICO accessed several of the internal opinion papers analyzing France’s request. The papers reveal the request was granted despite the opinion of two of the most powerful Commission departments — the directorates for competition and the internal market — that the French labels were illegal and put the single market at risk.

“This Commission is a political commission and therefore is not detached from political realities,” a European Commission spokesperson said when asked why Brussels ultimately allowed the French labels despite the technical objections.

It wasn’t the first time Juncker took a special position to accommodate France. In May 2016, the president conceded he had to offer Paris greater leeway to break EU budgetary rules “because it is France.”

Lust for labeling

Under Europe’s food legislation, countries are allowed to ask the Commission for specific origin labels if they can demonstrate that they protect public health, consumers or prevent fraud. 

Many food companies fiercely oppose the labels in fear of consumers shunning their products. Economists note the danger of protectionism rises when they are required.

Eight countries, including France, have applied for similar mandatory origin labels since March 2016. These governments argue their citizens have a right to know where their food comes from.

The Commission spokesperson did not respond to a question asking whether Brussels allowed the French proposal because of the milk crisis.

However, many in the food industry immediately interpreted the Commission’s clearance of France’s scheme as wholly political. 

“While the Commission is clearly under a lot of political pressure to allow France the opportunity to [introduce the labels],” FoodDrinkEurope, a lobby, said at the time, “allowing this ‘test’ would create a clear precedent and open Pandora’s box.”

Once the Commission granted France’s request, it was hard pressed not to grant the others, which came from Italy, Lithuania and Portugal, among other member countries.

Politics over procedure

The departmental discussion of French origin labels appears to confirm some of the industry’s beliefs about the Commission’s motivations. The Commission’s health and food safety department, DG SANTE — which is ultimately responsible for food labels — had broader political concerns in mind when discussing France’s scheme, particularly Moscow’s embargo on EU food, imposed over the conflict in Ukraine.

“From the wider policy perspective, DG SANTE recognizes that in a difficult situation for various agricultural sectors, in times of constraints by the embargo imposed by the Russian Federation and of increased global competition with food producers from emerging economies, a case can be made for innovative approaches to finding and testing new solutions,” it said in its June 2016 assessment of the French scheme.

Both the agriculture and internal market departments reacted strongly to DG SANTE’s linking of origin labels to a market crisis.

The agriculture department described DG SANTE’s reasoning as “particularly inappropriate as it seems to acknowledge that renationalizing the markets could be a solution to the difficult situation described.”

DG GROW likewise pointed out that the Russian ban “does not invalidate” the threat origin labels pose to the single market. 

POLITICO contacted all of the departments involved to ask them about the how their opinions were factored into the decision to grant France’s labeling request, but they declined to comment. The Commission rejected POLITICO’s request to see its trade department’s opinion on French origin labels on the grounds of protecting international relations.

Shattering the single market

Belgium is the fiercest critic of French gastro-nationalism. It complained to the Commission in July that its dairy and processed meat exports to France fell 17 percent in 2016 compared to 2015 — even before France’s labels took effect January 1, 2017. The Belgian government said fixed retail contracts meant large French supermarkets began to switch to local milk suppliers, adding that its milk exports to France fell even further this year.

Commission experts predicted Belgium’s predicament.

In its June 2016 evaluation, DG GROW cited previous studies that demonstrated mandatory origin labels would radically alter supply chains and France’s scheme would “create a prejudice” against foreign products.

Just like DG GROW, the Commission’s mighty competition arm DG COMP also said in June 2016 that it had “serious doubts” about the French proposal.

“Systematic labeling of the origin of products (in practice France vs. other sources) risks facilitating the naming and shaming of importers of products from other member states so as to ultimately restrict imports,” it said, advising Brussels to block the request.

DG COMP went on to say it was “concerned that the likely effect of the measure proposed by the French state risks being a reduction of imports into France,” and that the temporary nature of the measure did “not justify its adoption.”

Three other departments concluded the labels would be acceptable: The Commission’s secretariat-general, its agriculture department and its health and food safety arm. They said making the labels temporary would allow Brussels to gather information about a policy consumers and many governments want.

They all noted the threat to the single market, however.

The agriculture department, for example, correctly predicted in June 2016 that the French labels could “trigger similar reactions outside France and lead to a renationalization at much wider scale.”