Report: Made in EU – how country of origin labelling affects the internal market

More and more EU Member States adopt country-of-origin labelling (COOL) for food products. The Swedish National Board of Trade has analysed how such labelling affects the Internal Market.

What is your conclusion?

Our report shows that COOL affects the free movement of goods. When one country after the other introduces national rules on mandatory country-of-origin labelling for food products, there is a risk of creating barriers to trade within the EU.

Origin labelling could mean that consumers, to a greater extent, choose domestic food products over imported goods. It may be because they interpret that the country-of-origin labelling stands for a certain quality, a certain animal welfare or environmental effects. The implications with country-of-origin labelling could be that goods from another member state get an unfavourable position, even though they could be equivalent or even better in terms of quality and environmental impact. As a decision-maker, it may be worth considering how to facilitate for consumers to make well-informed decisions - without creating unnecessary barriers to trade.

What kind of goods is the study about?

It regards food products where it is possible for member states to adopt national rules on origin labelling. For example, it can be milk, milk products, pasta or rice.

What are the rules of country-of-origin labelling in the EU?

There are harmonised rules on the indication of origin for certain food products. It regards prepacked beef, pork, and poultry as well as honey, fruit, and olive oil. Apart from these products, a member state can adopt national rules on mandatory origin labelling on other products. If a member state wants to adopt national rules, they must notify the Commission well in advance. Two procedures serves this purpose, which procedure to use depends on how the COOL measure is drafted.

You have analysed the notification procedures, how do they work?

Today, a member state can notify the Commission about its plans according to two different procedures. The problem is that one of the procedures do not offer the same guarantees when it comes to transparency. It does not open up for dialogue between the Member States and the Commission to the same extent as the other procedure, and enterprises have no means to follow the process. The consequence can be that a proposal from a member state is accepted, even though it could have a negative impact on trade within the EU.

What should the EU do about it?

We recommend the Commission to assess how existing national COOL measures affects the internal market before accepting new national rules on COOL. We would also like to stress the importance of a transparent notification system in which the Commission and other member states can be informed about new proposals on origin labelling. Finally, we suggest that member states in the process of adopting mandatory country-of-origin rules, should be obliged to notify the Commission under both procedures.