Why is there milk in everything?

It's a common refrain from new vegans. Doing their best to avoid consuming or demanding products made from things that have been taken from animals, they have started to pay much more attention to ingredient lists on packaged, processed foods. Happily, vegans are incredibly helpful and supportive and it doesn't take us long to learn about all the myriad junk food that's accidentally vegan. Still, during that initial period we learn that there is milk, whey, lactose or casein in the strangest of places, in products in which milk as an ingredient doesn't make much sense at all. Why is this? When the decision came out in the TofuTown case (in which the European Court of Justice confirmed that words such as cheese cannot be used to describe products other than those made from mammary secretions) I took a look at that decision, and that led me to look more closely at the European legislation supporting and promoting the dairy industry. The article below explains the position.

Dairy’s Monopoly on Words: the historical context and implications of the TofuTown decision

by Barbara Bolton

Abstract

There has been a lot of commentary on the decision in Verband Sozialer Wettbewerb eV v. TofuTown.com GmbH (“TofuTown”), however most has been superficial and has given the impression that the ECJ banned plant-based food producers from using certain words, such as “milk” and “cheese”. In fact, a political decision to grant dairy a monopoly on the use of those words was taken decades ago. This paper explains the historical context of the TofuTown decision, the background to the regulation applied by the ECJ, and what the regulation and decision together mean for plant-based food manufacturers in the EU, and in particular in the UK.

In light of the exponential growth of the plant-based food market and the number of plant-based consumers in the UK and across the EU, consideration is also given to the prospect of a legal challenge to the regulation, either by a plant-based food producer or by vegan consumers. These same arguments may be advanced by vegan run plant-based businesses in defence of enforcement proceedings against them for use of the restricted words.

Introduction

There has been a lot of commentary on the decision in Verband Sozialer Wettbewerb eV v. TofuTown.com GmbH (“TofuTown”)[1], in which the European Court of Justice (“ECJ”) ruled that German company TofuTown could not call its plant-based products: ‘Soyatoo Tofu butter’, ‘Plant cheese’, ‘Veggie Cheese’, or ‘Cream.’ From the existing coverage you would be forgiven for thinking that the ECJ was asked to consider the objective meaning of the words "milk," “butter,” “cheese” and “cream” and concluded that plant milk does not qualify.[2] In fact, the ECJ was bound to apply an EU regulation which precludes the use of these words to describe and market products that are composed of anything other than “mammary secretions,” i.e. the secretions of the mammary glands of mammals, principally cows. The ECJ did not “ban dairy-style names for soya and tofu,” it was bound to give effect to a prior political decision granting dairy a monopoly on those words.

The regulation applied in TofuTown, Regulation No 1308/2013, is the most recent iteration of a set of rules that have their roots in the Treaty of Rome (1957) and the establishment of the Common Market, with the express purpose of protecting the dairy industry from competition and promoting the consumption of dairy throughout the EU. In order to understand the decision in TofuTown, it is to that regulation and its history that we must look. This paper considers the historical context in which the regulation sits, what the regulation and decision mean for plant-based businesses marketing products in the EU, and in particular the UK, and some of the legal challenges that may be made to the regulation, or in defence of enforcement proceedings, in light of the recent exponential growth of the plant-based food market and veganism.

The Historical Context

The Treaty of Rome provided for a Common Market throughout the European Economic Community (the “EEC”, which developed into the EU) covering agricultural products. It established the Common Agricultural Policy (“CAP”) with a view to ‘stabilising those markets’, ‘increasing agricultural activity’, ‘guaranteeing regular food supplies’, and ‘ensuring reasonable prices for customers’ and ‘a fair standard of living for people engaged in agriculture’.[3] Common pricing, subsidies, quotas, stock-piling, common rules concerning competition, “common action for the development of the consumption of certain products” and guarantees of the sale of those products would be used to stabilise and support agricultural markets.[4]

In that context, in 1968 the EEC introduced Regulation (EEC) No 804/68 on “the common organisation of the market in milk and milk products”.[5] It was noted that “intervention measures” were necessary to “enable the best return to be obtained from milk proteins.” Provision was made for the EEC to purchase milk, butter, cheese, skimmed-milk powder and casein[6] at an “intervention price,” and dispose of it in a way that would not interfere with the ‘balance of the market’, including by storing it and marketing it on special terms. In other words, the production of dairy would be encouraged and supported by the EEC (and later the EU) through guaranteed sales, with the EEC/EU offloading the surplus in ways that would not adversely affect the dairy industry.[7]

A Management Committee for Milk and Milk Products was established and a levy was applied to milk producers, which was used to promote the consumption of dairy and expand the market for milk and milk products,[8] with specific reference made to supplying milk products to school children.[9]

The original rules have been modified many times over the years, but the core objectives have remained unchanged: to protect and promote the dairy industry in light of the significance of that market to the EU. As noted on the Commission web site:

“Milk is produced in every single EU Member State without exception. Furthermore, milk is the EU number one single product sector in terms of value at approximately 15% of agricultural output. The EU is a major player in the world dairy market as the leading exporter of many dairy products, most notably cheeses...”[10]

This aim of promoting the consumption of milk and milk products is set out in express terms, for example in Article 2.1 of Regulation 1411/71:

“The common policy applicable to the products specified …. shall be so implemented that the greatest possible quantity of milk is consumed in the form of those products.”[11]

Political Decision - Monopoly on Words

In 1987 the EEC brought in Council Regulation (EEC) No 1898/87 on “the protection of designations used in marketing of milk and milk products.” In the preamble it was noted:

“Whereas the situation of the milk and milk products sector is characterised by structural surpluses and whereas

the disposal of these products should therefore be improved by promoting their consumption;

Whereas the natural composition of milk and milk products should be protected in the interests of Community producers and consumers;

Whereas regulations which ensure appropriate labelling and prevent the consumer from being misled will help this objective to be achieved;

Whereas milk and milk products should, therefore, be defined and the designations needing to be reserved for them should be clarified;

Whereas, apart from the case of products the exact nature of which is known through traditional usage, it is also necessary to avoid any confusion in the mind of the consumer between milk products and other food products, including those consisting partly of milk components;

Whereas this Regulation aims at protecting the consumer and at establishing conditions of competition between milk products and competing products in the field of product designation, labelling and advertising which avoid any distortion;

….

Whereas it is essential for the Commission to follow closely developments in the market for milk products and competing substitute products and to report back to the Council;

Whereas, pending the report from the Commission, Member States having already taken national measures to curb the manufacture and marketing of these products on their territory must maintain their regulations….”

It is quite clear from this preamble that Regulation 1898/87 is expressly aimed at protecting the dairy industry from competition and promoting the consumption of dairy. It also refers to measures to curb the manufacture and marketing of “competing substitute products,” products that share characteristics with dairy products but are not made from dairy, i.e. plant-based products.

Regulation 1898/87 lists in its Annex a number of words that are reserved exclusively for designating “milk products”, whereas:

“Milk products” are “products derived exclusively from milk,”[12]

“Milk” is said to “mean exclusively the normal mammary secretion obtained from one or more milkings”,[13]

“Designation” means “the name used at all stages of marketing” the product,[14] and

“Marketing” means “holding or display with a view to sale, offering for sale, sale, delivery or any other manner of placing on the market.”[15]

The designations listed in the Annex reserved exclusively for milk products are:

Whey

Cream

Butter

Buttermilk

Butteroil

Caseins

Anhydrous milkfat

Cheese, and

Yoghurt.

The impact of Regulation 1898/87 is therefore that words such as cheese, milk, yogurt and cream may only be used to name products that are derived from mammary secretions. If those mammary secretions are not bovine (from a cow), that must be stated on the product, hence goat’s milk, sheep’s cheese etc.[16]

In addition, “no label, commercial document, publicity material or any form of advertising…or any form of presentation, may be used which claims, implies or suggests that the product is a dairy product.”[17]

In 2007 Regulation 1898/87 was repealed and incorporated into Regulation (EC) 1234/2007[18] and later the 2013 version referred to in the TofuTown decision.[19]

Exceptions Based on Usage

There are exceptions. The restricted words can be used to name non-dairy products where that is a use “the exact nature of which is clear from traditional usage”[20] A system was put in place for the creation of a list of exceptions maintained by the Commission based on submissions from member states.[21] The list of exceptions includes products such as: almond milk, coconut milk, nut butters (e.g. peanut butter), and ice-cream.[22] It is also permissible to use the restricted words “to describe a characteristic quality of the product,” for example crème de banana.[23]

Enforcement of Monopoly

The claim against TofuTown was taken by Verband Sozialer Wettbewerb (“VSW”), described in the judgement as “a German association whose responsibilities include combatting unfair competition.” On the contrary, as set out above, the regulation is overtly protectionist and anti-competitive as between dairy and plant-based products, and VSW sought to enforce dairy’s long-standing monopoly on the use of certain words.

While the TofuTown decision did not see the ECJ ban plant-based businesses from using certain words to market their products, that ban having been put in place decades ago, it did confirm that the use of a plant-based descriptor alongside the restricted words is not enough to get around the prohibition; for example “plant cheese” or “veggie cheese”. Presumably the German authorities will now ensure that TofuTown changes its product names to comply with the ECJ ruling.

Implementation in the UK

Regulations have direct effect, meaning they are binding on member states without the need for implementing legislation. However, reports indicate that the UK was not in full agreement with the restrictions when they were introduced, at least with respect to the marketing of soya milk.[24] It is reported that the UK Government consistently took the position that "soya milk" fell within the terms of the exception, as its nature was clear from traditional usage. By 1995 the Commission had decided to take the UK to the ECJ for failure to regard the marketing of soya milk as an infringement of Regulation 1898/87.[25]

A report indicates that in 1995 Mark Watts, then MEP for East Kent, led a challenge to the Commission in support of a UK soya milk manufacturer, Plamil, which was reported to have then been marketing its product as "soya milk" in the UK for over thirty years. Mark Watts reportedly presented a petition signed by over 70 UK MEPs calling on the Commission's Agricultural Commissioner to withdraw the threat of taking the UK Government to Court.[26]

It appears from the report that the UK dairy industry was also at that time fairly sanguine about the idea that plant products could constitute a threat to the dairy market, with a representative of the National Dairy Council reported to have questioned the argument that consumers could be confused between soya and cow's milk, commenting: "We think the consumer is a bit brighter than that", while Stephen Crompton of the 'Consumers in Europe' Group is reported to have stated: "We are unaware of any evidence that UK consumers have been misled into believing that soya milk is a dairy product. We believe that the name 'soya milk' is well established and that calling it something else will cause confusion".

The UK Agriculture Minister Angela Browning is also reported to have stated: "If they succeed where we have failed then nobody will be more pleased then me," indicating that the UK government supported the efforts to have soya milk included on the list of exceptions.[27]

However, a further report refers to then UK farm minister Douglas Hogg meeting EU Farm Commissioner Franz Fischler in 1995, during which meeting the Commissioner made it clear that the Commission remained of the view that soya milk would have to be referred to as “soya drink,” as it was not dairy, and it appears that the UK capitulated as national rules implementing Regulation 1898/87 were then adopted.[28]

The UK implementing regulations make it clear that in the UK the exception for non-dairy products which are well understood through traditional usage is only available for products which do not compete with dairy and it is specifically noted that “the terms ‘soya / rice / oat milk’ are not permitted.”[29]

Impact of TofuTown on Plant-Based Companies in the UK

The approach currently adopted by plant-based businesses marketing products in the UK is very mixed. Soya milk has been marketed as “soya drink” in the UK for many years, since the UK implemented the regulation at the end of the 1990’s, and most businesses have adopted the same approach for other plant milks as they have come onto the market, for example “oat drink.” Interestingly, although almond milk and coconut milk are on the list of exceptions they also tend to be marketed as “almond drink” and “coconut drink.”[30] More recently, however, we have seen some plant milk producers use the word “milk” in their product name or description, with their marketing campaign openly setting up their product as a competitor to dairy equivalents.

For plant cheeses there is a mixed picture. Some high-profile brands such as Violife, the Greek plant-based cheese manufacturer, avoid the word “cheese” as well as any words associated with dairy cheese, whereas others avoid “cheese” but do use words commonly used to describe different styles of cheese, and some smaller businesses do use “cheese”. A number of other plant-based products are on the UK market openly called “cream” and “yoghurt”. Without exception the plant-based nature of the product is specified alongside the restricted word, for example “coconut yoghurt,” but the decision in TofuTown made it clear that doing so does not effectively avoid the EU prohibition on use of the restricted words.

The decision in TofuTown has drawn attention to the regulation and the requirement on member states to enforce the restrictions. There may, therefore, be increased pressure put on plant-based businesses in the near future with respect to how they market their products. There are, however, a number of possible ways in which the rules may be changed or challenged.

Possible Solutions for Plant-Based Companies

UK Solutions

Permissible Approach

In the UK there is a permissible middle ground. The UK guidelines state that:

“Use of dairy terms to clearly and unambiguously describe a ‘non-dairy’ product as ‘non-dairy’ is acceptable. Example: Describing a soya product as a “non-dairy alternative to cheese.”[31]

While perhaps not attractive to plant-based businesses who have decided to openly challenge the restrictions, this does offer an alternative approach which could be a solution for some, enabling them to make the connection with the commonly understood term, so that the consumer knows what to expect, but without breaching the rules.

However, there is no express provision for this approach in the regulation itself, which reads as a complete prohibition on the use of the restricted words. On one interpretation the regulation could preclude the use of the restricted words in the description of plant-based products even if used to expressly advise the consumer that the product does not contain mammary secretions. Such a strict interpretation of the regulation does not seem in keeping with its purported aim of avoiding consumer confusion; however, as we have seen, the regulation is openly protectionist and part of an overall system designed to promote dairy, and an absolute prohibition on the use of the restricted words for plant-based products would be in line with that objective. Other member states interpret the regulation differently to the UK and unless and until we have a decision from the ECJ it will not be clear whether or not the UK approach is permissible.

Brexit

Brexit raises the possibility of the UK withdrawing completely from the single market and the CAP related regulations. In the absence of an agreement the UK’s withdrawal from the EU would mean just that, opening up the possibility that the UK dairy industry could lose its monopoly on words and plant-based businesses could be free to use these terms to describe their products in the UK. However, the UK is in negotiations with the EU and we do not yet know if it will leave the single market and, if it does, what replacement rules will be brought in. Indeed, it seems there is significant pressure on the UK government to continue the dairy promoting measures, whatever the outcome of the Brexit negotiations.[32]

List of Exceptions

It is possible that this matter could be resolved politically. The list of exceptions can be added to, and therefore one option would be for plant-based businesses and consumers to lobby governments and MEPs to add common plant-based products to the list. However, there was an attempt to do just this in the UK in the 1990s in relation to soya milk, which failed. Things have changed quite dramatically since then, in terms of the development of the plant-based food market and consumer awareness of plant-based products, however the attitude of the dairy industry has also changed rather dramatically; as more people switch to plant milks, cheeses and other products the dairy industry now does feel threated and does claim that there is a genuine risk of consumers inadvertently purchasing plant-based alternatives to dairy due to confusion, as opposed to a purposeful decision to avoid dairy products in order to avoid participating in animal exploitation and killing, or due to environmental or health concerns. It may therefore be unlikely that we will see the addition of plant-based products on the list of exceptions without a direct challenge to the regulation.[33]

Rights-Based Challenges

From the perspective of plant-based businesses, the rules may seem very unfair. If the only aim were to ensure that consumers knew what they were purchasing, all cheeses, milks and yoghurts could be named so as to indicate what they were composed of, with the full ingredients also listed on the label. Milk made from mammary secretions could be named as such: “cow’s milk,” “goat’s milk.” Cheese made from mammary secretions could be named likewise: “cow’s milk cheese”, “brie from cow’s milk” etc. Plant-based products could similarly refer to their composition in their name: “plant cheese”, “soya cheese,” “nut cheese” etc., with full ingredients listed on the label. From the perspective of plant-based businesses and consumers interested in plant-based products, this would be much fairer, while the risk of confusion between plant-based products and products made from mammary secretions would be very low and arguably less likely than under the current rules.

However, the real justification for the rules is to afford the dairy industry protection; as the plant-based industry grows the validity of that objective may also come under pressure. With the huge increase in the plant-based food market over recent years, the business interest in challenging the protectionist regulations is now significant and we may see such a challenge mounted if the situation is not resolved politically.