Stimulating Reform: The European Union Approach to the Regulation of Energy Drinks

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Stimulating Reform: The European Union

Approach to the Regulation of Energy Drinks

Introduction

The legal framework of the European common market is set out in Article 26 of the

Treaty on the Functioning of the European Union (TFEU), which states that “the Union

shall adopt measures with the aim of establishing or ensuring the functioning of the

internal market, in accordance with the relevant provisions of the Treaties.” While it is

clear that the notion of a common market comprises the very heart of the European

Union (EU), the current regulatory situation regarding energy drinks is an unfortunate

indicator of the fact that the health and safety of consumers is not always prioritised

as it should be. With the free flow of goods forming the most crucial artery in this

complex system, it is clear that any health worries regarding specific goods must be

definitively substantiated before the tourniquet is applied and circulation is stopped.

As Oliver notes, nowhere in the Treaty is the concept of “goods” defined,1 the

European Court of Justice (ECJ) has stated in Commission v Italy (works of art) that

“by goods, within the meaning of [Article 26 of the Treaty], there must be understood

products which can be valued in money and which are capable, as such, of forming

the subject of commercial transactions.”2 It is clear that energy drinks most definitely

fall under this definition and as such the regulation of energy drinks must adhere to

1 Peter Oliver and Malcolm Jarvis, Free Movement of Goods in the European Community: Under Articles 28 to 30 of the EC Treaty (Sweet & Maxwell 2003), at 16. 2 Case 7/68 Commission v Italy (Works of Art) [1968] ECR 423, at 428.

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the strict legal conventions in the EU which maintain that products may move freely in

the customs union.3

A helpful consideration of how the ECJ should interpret the TFEU provisions relating

to the free movement of goods was provided by Advocate General Maduro in his

opinion prior to the judgment in Alfa Vita Vassilopoulos:

[t]he task of the Court is not to call into question as a matter of course Member

States’ economic policies. It is instead responsible for satisfying itself that those

States do not adopt measures which, in actual fact, lead to cross-border

situations being treated less favourably than purely national situations.4

Yet, by relying on Article 34 TFEU, which prohibits restrictions on the import of goods

from other Member States, energy drink manufacturers have successfully countered

attempts by Member States to alter the arguably lax regulatory framework that burden

their businesses. Member States have had to take action themselves as regulation of

energy drinks as a specific product class is non-existent at EU level.5 6 In spite of the

multitude of political and scientific fears about the potential effects of energy drinks7,

the European Food Safety Agency (EFSA) only last year prioritised energy drinks for

3 It is generally agreed that ‘products’ is a term that can be used interchangeably with ‘goods’. See Oliver, note 1 at 8-9. 4 Joined Cases C-158/04 and C-159/04 Alfa Vita Vassilopoulos AE v Elliniko Dimosio and Nomarchiaki Aftodioikisi Ioanninon; Carrefour Marinopoulos AE v Elliniko Dimosio and Nomarchiaki Aftodioikisi Ioanninon [2006] ECR I-8135, Opinion of Advocate General Maduro, at paras 41-46. 5Matthias Kettemann, “Anmerkungen zur jiingeren EuGH-Judikatur zu erlaubten Einschriinkungen der Warenverkehrsfreiheit am Beispiel des franzdisischen Importverbotes fir Red Bull - Die europarechtliche Zuliissigkeit von Importverboten aus Griinden des Gesundheitsschutzes” 1 Hanse L. Rev. 215 2005, at 224. 6 Although interestingly the Codex Alimentarius Commission does not have any standards for energy drinks whatsoever. See http://www.codexalimentarius.org/standards/list-of-standards/ 7 Which is obviated by at least fourteen written questions tabled in relation to energy drinks in the last five years. See http://www.europarl.europa.eu/plenary/en/parliamentary-questions.html#sidesForm (search terms ‘energy drink’, ‘caffeine’ and ‘Red Bull’).

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further investigation as a “potential emerging risk.”8 By comparison, in New Zealand

caffeinated beverages such as Red Bull were regulated under the Dietary

Supplements Regulations 1985 which placed a cap on caffeine at a level of 200 mg/l.9

But before discussing this further it is important to define what an energy drink actually

is and what dangers they allegedly pose to the consumer.

What are Energy Drinks and Why Regulate Them?

Energy drinks are beverages containing caffeine and B vitamins, along with other

substances such as taurine, carnitine, inositol, ginseng, guarana and

glucuronolactone. Although the formulations vary, all energy drinks are marketed as

sources of both mental and physical stimulation, especially as a means of combating

tiredness and maintaining alertness and concentration. Regulators have identified a

number of reasons why energy drinks pose a risk for consumers, but surprisingly their

caffeine content is not in itself a cause for concern. There have been numerous studies

conducted by the EFSA and its predecessor the SCF on the safety of caffeine10 which

concluded that it is not dangerous.11 This is not surprising given the fact that caffeine

is the “only addictive psychoactive substance that has overcome resistance and

8 Annual Report on the Emerging Risks Exchange Network 2011, EFSA-Q-2011-00399, available at www.efsa.europa.eu/en/search/doc/280e.pdf 9 SR 1985/208 10 Report of the Scientific Committee for Food on Caffeine (expressed on 7 July 1983) available at: http://ec.europa.eu/food/fs/sc/scf/reports/scf_reports_14.pdf ; Opinion of the Scientific Committee on Food on Caffeine, Taurine and D-Glucurono-g-Lactone as constituents of so-called “energy” drinks (expressed on 21 January 1999) available at: http://ec.europa.eu/food/fs/sc/scf/out22_en.html; Opinion of the Scientific Committee on Food on Additional information on “energy” drinks (expressed on 5 March 2003) available at: http://ec.europa.eu/food/fs/sc/scf/out169_en.pdf; Scientific Opinion of the Panel on Food Additives and Nutrient Sources added to Food (ANS) on a request from the Commission on the use of taurine and D-glucurono-γ-lactone as constituents of the so called “energy” drinks. The EFSA Journal (2009) 935, 1-31. 11 The SCF concluded that, for adults, apart from pregnant women, the contribution of energy drinks to the total consumption of caffeine did not appear to be a cause for concern, assuming that energy drinks replace other sources of caffeine. However, for children, an increase in the daily intake of caffeine to a certain level of consumption per day may bring about temporary changes in behaviour, such as increased excitability, irritability, nervousness or anxiety. In addition, for pregnant women, the SCF’s view was that moderation of caffeine intake is advisable.

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disapproval around the world to the extent that it is freely available almost everywhere,

unregulated, sold without license, offered over the counter in tablet and capsule form,

and even added to beverages intended for children.”12

The ease with which adolescents and even children can obtain energy drinks is a

growing concern and is the first reason why energy drink companies are open to

scrutiny from regulatory bodies. Manufacturers do not do themselves any favours in

this regard as they directly target young people, using a carefully crafted combination

of endorsement deals with sports stars and musicians, sponsorships of extreme sports

events, sports teams and daredevil stunts and advertisements appealing to a young

person’s sense of adventure and rebelliousness. The desired effect is compounded

by vivacious brand names, Red Bull, Monster, Rockstar and Relentless being the most

popular. It is clear that these efforts are not in vain, with over one-third of ten to

eighteen year-olds reporting "regular" consumption of energy drinks according to a

very recent study.13

While it has been mentioned that caffeine alone is not considered to be a risk to

consumers by the EFSA or any national food safety body in the EU, health concerns

do exist about the various cocktails of stimulants, vitamins and amino acids added to

energy drinks, with a recent online survey of 3682 Danes between the ages of 10 and

35 conducted by the Danish National Food Institute finding that 42% of those who had

consumed energy drinks suffered side effects.14

12 Bennett Alan Weinberg and Bonnie K. Bealer, The World of Caffeine: The Science and Culture of the World’s Most Popular Drug (Routledge 2001), at xi. 13 Shivani R. Khan et al, “Risk Factors for Consumption of Energy Drinks, Alcohol and Both among a Sample of Youth from 10 U.S. Metropolitan Areas” (2015) 146 Drug and Alcohol Dependence e157. 14 Available at http://www.food.dtu.dk/english/~/media/Institutter/Foedevareinstituttet/Publikationer/Pub-2014/Rapport-om-energidrikke-i-Danmark.ashx?la=da

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But it is not just side effects that prompt action and Member States also attempt to

regulate energy drinks in response to cases of fatalities with a possible link to the

consumption of energy drinks. For example, the ANS Opinion of 2009, the SCF

Opinion of 2003 and a 2008 BfR Opinion15 mention a number of anecdotal and case

reports of acute, adverse effects, including fatalities, in individuals consuming “energy”

drinks, containing caffeine, taurine and glucuronolactone. In these cases “energy”

drinks had either been consumed in very high amounts, in combination with physical

exercise, or more frequently together with alcohol. In addition high caffeine

consumption poses health risks for particular people, including pregnant or lactating

women, as well as those with diabetes, peptic ulcer disease, or pre-existing

cardiovascular conductions such as hypertension, congestive heart failure, and

dysrhythmias16

Barriers to Regulation In spite of this, there is a real dearth of firm scientific data suggesting that energy drinks

pose any serious risk to public health. As a result of differing opinions on safety, the

means of regulating energy drinks varies throughout the EU in both form and

stringency. Restrictions are generally crafted in a way open to challenge as being

either physical or technical barriers to trade rather than fiscal measures such as taxes

or duties17 and as a result Articles 34-36 TFEU hold sway.

15 BfR (Federal Institute for Risk Assessment), 2008. New Human Data on the Assessment of Energy Drinks, BfR Information No.016/2008, 13 March 2008. Available at: http://www.bfr.bund.de/cm/245/new_human_data_on_the_assessment_of_energy_drinks.pdf. 16 Kevin A. Clauson et al., “Safety Issues Associated With Commercially Available Energy Drinks” (2008) J Am Pharm Assoc, 48(3), 55–67. 17Although France adopted a new excise tax on energy drinks on 1 January 2014: Loi de financement de la securite sociale pour 2014. Available at: http://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000028372809&dateTexte=&categorieLien=id

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These provisions are something of a marvel of concise drafting and as Nic Suibhne

observes, “the Community web which snares quantitative restrictions, as well as any

measures having an equivalent effect (MEQRs), is spun from a Treaty provision of

incredibly deceptive simplicity; and yet, it forms the basis of a legal regime both

complex and vast.”18 Indeed the brevity of Article 34 TFEU, which curtly declares that

“quantitative restrictions on imports and all measures having equivalent effect shall be

prohibited between Member States,” is at odds with the huge importance it has for the

common market.

Article 34 has been the subject of a wealth of discussion. The Court of Justice defined

a ‘quantitative restriction’ in Geddo v Ente as “measures which amount to a total or

partial restraint of, according to the circumstances, imports, exports or goods in

transit,”19 and the meaning of “equivalent effect” was deemed by the Court of Justice

in Dassonville to mean “all trading rules enacted by Member States which are capable

of hindering, directly or indirectly, actually or potentially, intra-Community trade….”20

Later in Cassis de Dijon21 the Court established that even “indistinctly applicable”

measures (i.e. national rules applying to both national and imported products) could

be contrary to Article [34] where the impact of the rule was likely in fact or in effect to

negatively affect trade between Member States.

18 Niamh Nic Shuibhne, “The Free Movement of Goods and Article 28 EC: an Evolving Framework” (2002) E.L. Rev, 27(4), 408-425, at 409. 19Case 2/73 Riseria Luigi Geddo v Ente Nazionale Risi [1973] ECR 865, at para 7. 20Case 8/74 Procureur Du Roi v Dassonville [1974] ECR 837, at para 5. 21 Case 120/78 Rewe-Zentrale AG v. Bundesmonopolverwaltung für Branntwein (Cassis de Dijon) [1979] E.C.R. 649; [1979] 3 C.M.L.R. 494.

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However, as Lasok notes, “the Treaty has not removed from the Member States all

authority to regulate intra-Community trade.”22 Article 36 allows prohibitions or

restrictions on imports, exports or goods in transit so long as they can be justified on

the grounds of public morality, public policy, or public security, the protection of health

of humans, animals or plants, the protection of national treasures possessing artistic,

historic or archaeological value, or the protection of industrial or commercial property.

This Article must be interpreted restrictively.23

The protection of health is deemed to be the most important of these derogations and

the Court ruled in De Peijper that the “health and the life of humans rank first among

the property or interests protected by Article [36] and it is for the Member States, within

the limits imposed by the Treaty, to decide what degree of protection they intend to

assure, and in particular how strict the checks to be carried out are to be.”24 However,

national rules or practises do not fall within the exception if the health and life of

humans can as effectively be protected by measures which do not restrict intra-

Community trade so much. This is known as the principle of proportionality and as

illustrated by Garde25 and MacMaolain,26 the ECJ has been hesitant to accept the

proportionality of national rules aimed at regulating the contents of food, arguing that

lesser nutritional characteristics27 or controversial ingredients do not pose a real threat

to human health. Finally, a measure will only be deemed appropriate if it genuinely

22Dominik Lasok, The Trade and Customs Law of the European Union (3rd edn, Kluwer Law International 1998), at 93. 23 Oznur Inanilhr “Derogation from the Free Movement of Goods in the EU: Article 30 and Cassis' Mandatory Requirements Doctrine” (2008) 1 Ankara B. Rev. 106, at 106. 24 Case 104/75 Officier van Justitie v De Peijper [1976] ECR 613, at 635. 25 Amandine Garde, EU Law and Obesity Prevention (The Netherlands: Kluwer Law International 2010), at 254-255. 26 Caoimhín MacMaolain, EU Food Law. Protecting Consumers and Health in a Common Market. (Oxford: Hart Publishing 2007), at pp. 49, 239. 27 Case 216/84, Commission v France [1988] ECR 793

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reflects a concern to attain the stated objective in a consistent and systematic

manner.28

With regard to the regulation of energy drinks, Member States have sought to justify

their trade restrictive measures by arguing that the measures in question are

necessary to protect consumers and also to protect the health of their citizens. This

justification has been argued in relation to prohibitions on the marketing of energy

drinks, prior authorisation procedures and labelling requirements for energy drinks.

Marketing

In Commission v Italy,29 the ECJ found that an Italian law forbidding the marketing of

energy drinks with a caffeine content exceeding 125mg/l was, in the absence of

scientific evidence demonstrating a public health risk, an MEQR. The infringement

action was brought by the Commission at the instance of various energy drink

manufacturers which were lawfully produced and marketed in other Member States.

The Italian Government argued that an upper limit for caffeine was justified on the

basis of the evaluations undertaken by Italian health authorities. It was their contention

that if the matter was not resolved upon the basis that the scientific position adopted

by those authorities was lawful, then the Court would “deprive Article 30 EC of its

content by replacing the non-arbitrary discretion of the Member State with the

subjective opinion of the health authorities of another Member State, which although

legitimate is certainly not such as to be inherently indisputable.”30

28 Case C-169/07 Hartlauer Handelsgesellschaft mbH v Wiener Landesregierung and Oberösterreichische Landesregierung [2009] ECR I-1721, at para 55. 29 Case C-420/01, Commission v Italy (Caffeine Drinks) ECR I-6445 30 Ibid, at para 21.

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However, the scientific evidence that Italy based their claims on did not itself consider

that the prohibition was necessary and as a result, the ECJ stated that "applying to

drinks produced and marketed in other Member States a rule prohibiting the marketing

in Italy of energy drinks containing caffeine in excess of a certain limit, without showing

that that limit is necessary and proportionate for the protection of public health"31 was

inconsistent with Article [34].

Prior Authorisation Procedures

Outright bans were not the only type of measure challenged. Other, more creative

restrictions were levied to regulate the surge in caffeinated energy drinks flooding

European markets. But with no clear cut EU strategy addressing the concerns of

Member States, the legality of these measures was dubious at best.

French prior authorisation procedures affecting the sale of energy drinks were an

attempt to plug the regulatory gap and were famously challenged in Commission v

France.32 In this case, France invoked the Article 36 public health safeguard to justify

its ban on any fortified foodstuffs it had not declared to be lawful by prior examination,

which as it happened included a number of energy drinks.

While the judgment specifically refers to the authorisation request of Red Bull which

“waited seven months for acknowledgment of receipt of its application and more than

two years to be informed of the decision to refuse it,”33 the Court still upheld the French

ban on energy drinks as it was in line with an assessment by the French Public Health

31 Ibid, at para 36. 32 Case C- 24/2000, Commission v France (fortified foods – ‘Red Bull’) [2004] ECR I-1277 33 Ibid, at para 41.

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Authority. In this vein, the Court argued that the Commission did not supply any

opposing evidence challenging the French authorities' analysis as regards the dangers

energy drinks pose to the health of the French public.

MacMaolain notes that, “France could of course, in the absence of harmonisation,

decide how best to protect its population.”34 However, although the ECJ accepted that

prior authorisation is not, in principle, contrary to Community law, it held that national

authorities must confine themselves to means which are actually necessary to

safeguard public health in exercising their discretion, even in light of the absence of

harmonisation and uncertainty of scientific research. It follows then that if the public

health safeguard is invoked, the Member State must ensure that any risk is sufficiently

established using the latest scientific data.35

In order to side step the ruling, the first energy drinks in France were marketed in a

new “light” formula without taurine until 2008, when the French Ministry of Economy

at last authorised the marketing of energy drinks after caving under the financial

pressure of a claim for damages in the region of 300 million euros. Despite this, as

Amat and Rihouey-Robini point out

The market authorisation was granted in exchange for several demands. All

“light” versions of energy drinks were to be withdrawn from the market (public

authorities feared they created confusion for the consumer regarding the

content of energy drinks). Additionally, energy drinks were to be labelled with

34 Caoimhín MacMaolain, Food Law: European, Domestic and International Perspectives (Hart Publishing 2014), at 54. 35 Gijs Berends and Ignacio Carreno, “Safeguards in Food Law - Ensuring Food Scares are Scarce” (2005) E.L. Rev., 30(3), 386-405, at 390.

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indications advising moderate consumption and with warnings about

consumption by pregnant women and children.36

Labelling Requirements

Case law indicates that labelling is the solution to most problems, at least in the eyes

of the Commission.37 This also extends to energy drinks and in both Commission v

Italy and Commission v France, the Court held that a mere obligation for the producer

of the drinks in question to provide the consumer with accurate information as to their

caffeine content is an effective way to protect persons at risk. Indeed, many Member

States now require clear indications and warnings on the labels of energy drinks, in

line with the stricter indication obligations concerning the caffeine content of energy

drinks under Regulation (EU) No. 116938 (hereinafter, FIR).

The FIR repealed Commission Directive 2002/67/EC,39 which had been introduced as

the general labelling Directive 2000/13/EC40 did not provide for compulsory and

specific mention of caffeine in the list of ingredients. Under the 2002 Directive energy

drink manufacturers were required to provide the warning message “high caffeine

content” on the label in the same field of vision as the product name, followed by the

36 Emily Amat and Lise Rihouey-Robini, “A Scientific Report Rekindles the Controversy over Energy Drinks in France” (2013) 8(6) EFFL 414-415, at 415. 37 Case C-77/1997, Österreichische Unilever GmbH v Smithkline Beecham Markenartikel GmbH [1999] ECR I-431, at para 35; Case C-221/2000, Commission v Austria (health claims) [2003] ECR I-1007, paras 49 and 52. 38 Regulation (EU) No 1169/2011 of the European Parliament and of the Council of 25 October 2011, O.J. 2011, L 304/18 39 Commission Directive 2002/67/EC on the labelling of foodstuffs containing quinine, and of foodstuffs containing caffeine, O.J. 2002, L 191/20. 40Directive 2000/13/EC of the European Parliament and of the Council of 20 March 2000 on the approximation of the laws of the Member States relating to the labelling, presentation and advertising of foodstuffs, O.J. 2000, L 109/29.

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caffeine content expressed in mg/100 ml it if the amount was in excess of 150 mg/l

(=15mg/100 ml).41

However, the FIR has done little if anything to alter the status quo, merely adding the

requirement of the warning message “Not recommended for children or pregnant or

breast-feeding women” in the same field of vision as the product name on energy

drinks’ labels.42 There are no warnings about the health hazards of the drinks, there is

no mention of the place of energy drinks within the total diet and there is no suggested

limited on the quantity to consume. This is very unsatisfactory and the use of labelling

as a regulatory tool in this way is “as likely to limit consumer information as it is to

promote it.”43

But there have been some positives and it is a welcome development that since

December 2012 only so-called “bodily function" claims, which have been scientifically

substantiated and approved by the European Commission and either appear on an

EU positive list or have been individually authorised, may be used on energy drinks.

Significantly, no claims regarding caffeine or amino acids are currently on the positive

list.

Conclusion

It is time to grab the Red Bull by the horns and stimulate some real regulatory reform

in the EU. It is not overly paternalistic44 for a Member State to regulate energy drinks

41 Common energy drinks contain about 32 mg/100 ml 42 Furthermore this is only as of 13 December 2014. 43 Rocque Reynolds, “‘Red Bull Gives You Wiings’ Patrolling the Boundaries of Drug Foods” (2011) 39 Fed. L. Rev. 281 44 Steven Steinborn and Kyra Todd, “The End of Paternalism: A New Approach to Food Labelling” (1999) 54 Food Drug Law J 401.

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when the Commission is evading the issue with the skill of a matador. While it seems

that the Commission has yielded slightly in light of public and political pressure by

introducing additional labelling requirements, this is not enough.

The introduction of harmonised legislation to regulate the sale and composition of

energy drinks as a product class is vital for consumer safety. It is unsatisfactory that

appears more likely to focus on the typical key ingredients of energy drinks as an

existing legal basis for further restrictions or requirements already exists in the form of

the EU Regulation on the addition of vitamins and minerals and other substances to

food.45

In the absence of any harmonisation it is regrettable that industry self-regulation in the

form voluntary codes of practice is deemed sufficient to protect consumer health.46 the

onus should be placed on the manufacturers of energy drinks to demonstrate the

safety of their products when challenging the actions of regulatory bodies. Stricter

controls are needed but it remains to be seen if the Commission has the energy to do

introduce them.

45 Regulation (EC) No 1925/2006 of 20 December 2006 of the European Parliament and of the Council on the addition of vitamins and minerals and of certain other substances to foods [2006] OJ L4/04 (as amended) 46For example, a code developed by the Union of European Soft Drinks Associations prohibits product claims that energy drinks have a rehydration effect similar to isotonic sport drinks as well as the targeted marketing of energy drinks to children or near to schools. While the International Council of Beverages Associations adopted guidelines for the composition, labelling and responsible marketing of energy drinks on the 16th December 2013. Available at www.unesda.eu/wp-content/uploads/2014/11/UNESDA-Energy-Drinks-Code_May2012.pdf and www.icba-net.org/files/resources/energy-drink-guidelines.pdf respectively.