A recent decision of the Court of Justice of the European Union has considered whether a non-alcoholic beverage can be marketed under the name ‘gin’, even when clearly labelled as being alcohol-free.
We outline the ruling and consider the implications of this decision for stakeholders in the Food, Agriculture & Beverage industry.
Background
Regulation (EU) 2019/787[1] (the SDR) governs the sale of spirit beverages, and in particular, how these products are to be defined, described, presented and labelled.
Article 10(7) of the SDR provides that the use of a legal name in the description, presentation or labelling of any beverage that does not comply with the requirements of the relevant category set out in Annex I is prohibited.
Annex I to the SDR is entitled ‘Categories of spirit drinks’. Point 20 of the Annex concerns gin, and states:
‘(a) Gin is a juniper-flavoured spirit drink produced by flavouring ethyl alcohol of agricultural origin with juniper berries (Juniperus communis L.).
(b) The minimum alcoholic strength by volume of gin shall be [37.5]%.
(c) Only flavouring substances or flavouring preparations or both shall be used for the production of gin so that the taste is predominantly that of juniper.
(d) The term “gin” may be supplemented by the term “dry” if it does not contain added sweetening exceeding [0.1] grams of sweetening products per litre of the final product, expressed as invert sugar.’
The beverage at issue in this case[2], Virgin Gin Alkoholfrei, was marketed and sold by PB Vi Goods as a non-alcoholic gin. VSW, the German Association for Security in Industry and Commerce, a fair-competition body, issued proceedings against PB seeking an order that the defendant cease the sale of the beverage. VSW submitted that the defendant’s beverage failed to meet the requirements set out in Annex I to the SDR, and therefore could not be sold under the name ‘gin’. In response, PB argued that the SDR had not been infringed as it is obvious to the consumer that their product did not contain alcohol.
Questions referred to the Court
Two questions were referred to the Court of Justice of the European Union (CJEU) for a preliminary ruling:
- Should the SDR be interpreted as prohibiting the use of the term ‘non-alcoholic gin’ in the presentation and labelling of a non-alcoholic beverage where it does not comply with the requirements laid down in Annex I for the category of spirit drinks corresponding to the name ‘gin’?
- Is the SDR valid in light of the freedom to conduct a business guaranteed under the Charter of Fundamental Rights of the EU?
Consideration of the questions referred
The CJEU held that it is apparent that Article 10(7) of the SDR prohibits the presentation or labelling of any beverage that fails to comply with the relevant category of Annex I. As non-alcoholic gin is not produced by flavouring ethyl alcohol of agricultural origin, these beverages cannot satisfy the requirements of Annex I. They therefore cannot qualify as ‘gin’. Although the beverage was described as ‘non-alcoholic’ in its labelling, the Court held that the prohibition also applies where a term is used for the purpose of indicating that a beverage is not to be confused with the drink covered by that name.
Turning to the second issue, the Court reiterated that the freedom to pursue a trade is not an absolute right. Instead, the freedom to conduct a business may be restricted provided that the limitation on that right corresponds to objectives of general interest pursued by the EU, and does not constitute a disproportionate and intolerable interference impairing the actual substance of that right. Moreover, any limitation on a right or freedom guaranteed by the Charter is permitted only where this is considered necessary and genuinely meets objectives of general interest recognised by the EU, or the need to protect the rights and freedoms of others.
It was found that the restriction imposed by the SDR does not impair the very substance of the freedom to conduct a business. This conclusion was reached on the basis that the prohibition concerns the use of a specific legal name, but does not hinder the production or distribution of beverages that fail to comply with the requirements of the Regulation. In this way, producers are not deprived of their right to market their products once they comply with the relevant legislation.
Comment
The CJEU’s findings align with an increasing body of case law imposing stricter food labelling rules, including the TofuTown.com judgment. In that decision, it was confirmed that EU food law prohibited plant-based products from using dairy-specific terms in its labelling such as ‘milk’, ‘butter’, or ‘cream’.
This decision offers a greater degree of clarity for the sector by confirming that EU food law views alcohol-free spirits as a distinct standalone product as opposed to a substitute for the traditional spirits they bear a resemblance to.
This judgment may provide distillers of gin brands with a slight advantage over companies who only produce such non-alcoholic drinks. Gin brands could still use their trade mark for a non-alcoholic drink, without the need to refer to it as “non-alcoholic gin”.
The CJEU’s judgment also has key implications for producers of non-alcoholic alternatives to other spirit drinks and perhaps substitutes for other alcoholic drinks. Producers of these products need to review their trade marks and labelling to ensure that they do not specifically refer to “non-alcoholic gin” or similar terms on bottles, websites, social media or other packaging or promotional materials. They also cannot use terms such as “gin-like”, “style”, “flavour” or similar terms. They could however use terms such as “juniper flavoured drink” or “botanical drink” for their products.
This decision does not prevent producers from applying for EU trade marks covering goods such as “alcohol free gin” or “alcohol free spirits” in their specifications of goods and services. They cannot use the term as part of the trade mark itself. If producers of alcohol free spirit substitutes own registered EU trade marks containing terms such as “no-alcohol”, “alcohol-free” or similar, then they should cease using them and seek to register versions of the marks that do not contain these terms.
For further information and tailored expert guidance, please reach out to a member of our Food, Agriculture & Beverage team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.
[1] REGULATION (EU) 2019/787 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 17 April 2019 on the definition, description, presentation and labelling of spirit drinks, the use of the names of spirit drinks in the presentation and labelling of other foodstuffs, the protection of geographical indications for spirit drinks, the use of ethyl alcohol and distillates of agricultural origin in alcoholic beverages, and repealing Regulation (EC) No 110/2008
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