Question 2 on FMG

This question pertains to the area of Free Movement of Goods (FMG), and
addressing issues concerning Art 34 of TEFU. In this question, we will look at Art 34,
which prohibits MS from implementing measures differentiating import and export
products. In the present case, we examine whether the French requirement that
packaging of herbal teas must be in French can be deemed a measure equivalent to
quantitative restriction. Additionally, we assess whether Spain's authorisation by the
agency about herbal teas can be considered a measure equivalent to quantitative
restriction. Furthermore, we will see whether these measures fall under selling
arrangement or product requirement. We also examine whether there is a dual
burden according to the 'Cassis de Dijon' case test. Whether there is any
justification according to Art 36 that France and Spain can use to justify their actions
as valid under Consumer Protection and Public Health. Lastly, we will discuss the
possibility of the proportionality of the measures.

Before moving further we need to know what is FMG and its aim. FMG is the
fundamental principle of the EU. Its main aim was to establish a single market where
goods could move freely without restriction. Also, there could be economic
integration among MS by eliminating trade barriers. Furthermore, there are two types
of barriers which are; monetary barriers such as restrictions imposed in the form of
duties, taxes and customs tariffs that were outlined in Art 28 of TEFU. On the other
hand, there are non-monetary barriers; which are restrictions on bans and quotas,
impacting movement of goods.

Now coming back to the main question, in order to invoke Art 34 Zenfit has to
provide that herbal tea product falls within the definition of Goods and that France's
measure is discriminatory. According to given fact, Zenfit is producing herbal tea and
it sales has increased in the UK. Therefore, in present case, herbal tea has money
value and is subject to a commercial transaction. Hence it can be said that herbal tea
falls under the definition of goods (Commission v Italy). Further, to apply Art 34
there needs to be state measures that restrict goods from importing as per
Commission v Ireland; Buy Irish. Also, state measure is any act directly or
indirectly connected with the government and it can be an act as well as an
omission. Hence, in our case state measure is that information of packaging must be
in French, according to French legislation. Hence, France measure infringes Art 34
which states any measure that hinders the free movement of goods can be
considered invalid.

Now we will determine whether the state measure is a Quantitative Restriction (QR)
or a Measure Equivalent Quantitative Restriction (MEQR). Here is what by mean QR
and MEQR. CJEU defined QR in case of (Geddo v Ente Nazionale) that it includes
measures affecting a total/partial hindrance on imports and exports. In simple terms
ban or quota. On the other hand, MEQR is anything apart from a ban or quota that
hinders the movement of goods is considered as MEQR. For example restrictions on
the labelling or packaging used for a product. However, classic definition of MEQR
can be found in Directive 70/50 and further, it was elaborated in case of
Dassonville, where it was stated that ‘All trading rules enacted by MS which are
capable of hindering, directly or indirectly intra-community trade then Art 34
can be invoked.' However, according to given scenario, there is no ban or quota
which is directed towards imports only. Instead, this restriction is directed towards
both imports and domestic products and the measure is not a complete ban but a
restriction in transit resulting in MEQR. When we look at the facts, according to
French law any information on packaging must be in French. It seems France's
measure indirectly discriminated goods of Zanfit and stated it to change the
packaging. See case (Volpi v Meroni) as per this case France has violated the
Community Law and Zenfit can enforce its breach under Art 34 of TEFU.

According to Directive MEQR is divided into two groups which are; Distinctly
Applicable Measure (DAM) and Indistinct Applicable Measure IDAM. DAM applies
only to foreign products and causes discrimination as per cases, Promalvin; Geddo.
On the other hand, IDAM applies to both foreigners as well as domestic. The France
Parliament has passed legislation to it applies to both domestic and imports
therefore it falls under IDAM. Hence, in a given scenario, the French measure is
IDAM because France has put restrictions that information on packaging must be in
French. This seems violation of Art 34 because Zenfit is not exporting only in France
there are other EU countries. Then Zenfit has to change the packaging for every
country. Further, according to given fact, the France measure focuses on the
packaging that can be considered a ‘Product Requirement’ as opposed to a
‘Selling Arrangement.’ Thus, it is obvious that France's measure violates Art 34 and
product requirement falls under Art 34.

Additionally, changing packaging can impose a dual burden on Zenfit as an importer

as per case of Mazzoleni. First Zenfit has to satisfy its own country's product
requirements then another country where it is exporting. Also, Zenfit has been
lawfully producing herbal teas in the UK for some time. Then it can be an injustice to
follow another EU country's requirements as well despite being EU member country.
Furthermore, Zenfit can argue that according to Cassis de Dijon case where it was
stated that if one EU member country has recognised a product as lawful and

qualified for trade then another EU member country should accept it as lawfully. As
France and the UK are part of the EU if Zenfit is selling its product in the UK free
from any restrictions then why does France have put restrictions? Under the doctrine
of Mutual Recognition if one MS is accepted then another must accept that produc,
(Asocision v Administracion de Estado (2018)). Hence in the present case, Zenfit
is selling its product in the UK lawfully then it can sell in other EU MS. Furthermore,
putting a dual burden on importers, as highlighted by Mazzoleni (2001), para 22 can
be an injustice as being EU member. Now, it is the court's discretion to follow mutual
recognition thus if the court allows then France would be in breach of Art 34. Then
France can justify its actions as a defence.

Moving to see whether there is a possible justification under Art 36 that France can
use to justify its measure validly. Here we will see what Art 36 states; Art 36 states
that countries can't use exceptions if their actions unfairly discriminate or indirectly
restrict trade. Additionally, any measures taken by MS to achieve Article 36's goals
must be proportionate. Furthermore, this Art aims to find a fair balance between the
valid concept of MS and interests of producers. Moreover, there are six derogations
on which MSs can rely to justify but in our case, France can rely on Public Health
and Consumer Protection. France can argue on Public health that the measure that
requires the information on herbal tea packaging should be in French so that
consumers must be aware of what is written. France can also argue that the
consumer protection falls under mandatory requirement as per Walter Rau; Mars;
Estee Lauders however, these cases also indicate that this justification is not
allowed by the courts easily. On the other hand, Zenfit can argue that herbal tea is
not a sort of chemical that can affect consumers' health. However, France can
contrast this by stating if information is in French consumers will be aware of what
ingredients herbal tea contains. There is a possibility consumers buy herbal tea
products without being aware of what ingredients are in herbal tea. That can affect
consumers' health. However, if information is in French they understand and also
here most people prefer their language as culturally. Moreover, there are other
herbal tea manufacturers that consumers know very well what ingredients contain
inside. Hence, when any new product comes into market, consumers may buy it
without understanding information on the packaging. Therefore, if the information is
in French consumers can be aware and buy it with trust.
Furthermore, the grounds of public health are also given under the mandatory
requirements that were defined in the case of Cassis de Dijon. For justification court
distinguishes between genuine health concerns and disguised trade restrictions to
ensure fair assessment (Commission v Uk-Poulty Meat). However, if there is no

scientific authority to assess public health risks, France has the flexibility to take
Precautionary Measures, as seen in the case of Sandoz. In addition, under
Rosengren MS are free to determine the level of protection when faced with
uncertain risks, as highlighted (Commission v Denmark). Further, the situation
described in the case of Commission v Italy, France bears the responsibility to
prove its case. However, if France can successfully identify and demonstrate that the
information on packaging should be in French consumers be aware of herbal tea
ingredients. Then it stands a chance of succeeding in its argument. Moreover,
France can use consumer protection as a valid reason under Cassie. The argument
can be that herbal tea would be a new product so people will be attracted to buy it.
The consumption of herbal tea may be good but not understanding information on
packaging may lead consumers concerned. Therefore, France is taking
precautionary measures for the protection of consumers.

To assess justification, the question of proportionality is crucial. The general test, as

seen in the case of (DocMorris NV), involves determining if protection could be
achieved with fewer restriction measures. This means; assessing whether the
measure is suitable and necessary. And if there are alternative ways to achieve the
goal then France must have followed that. Further, see another case, Commission
v France, where it was emphasized that states should choose the least restriction
measure necessary for their purpose. Additionally, in another similar case
Commission v Austria, failure to seek a less restriction measure rendered the
action. Hence, in our present case, the main question is whether France had any
alternative less restritive method to ensure consumer protection and public health?
For example instead of asking Zenfit to change the whole packaging, France could
have asked to provide any disclamare describing the ingredients, or France could
have imposed a one-time test to check if the ingredients comply with the health
standards.

Spain: I have illustrated the issues above in the introduction, and now we will
discuss them in detail. As I discussed above herbal tea has money value and can be
considered as commercial transaction. So it falls under definition of goods. To invoke
Art 34 we have to look what is state measure. Spain's measure is that all sort of
herbal teas as ‘Medicinal Products’ should be subject to specific authorisation by
agency before allowing in market. Further, according to Art 34 any measure that
hinder the goods from market can be violation of Art 34. In our case, Spain measure
is hindering Zenfit goods to reach in market. (Commission v Ireland). Therefore, it
seems violation of Art 34.

Now we will see whether the State measure is QR or MEQR as discussed above.
The present case falls in MEQR because it is applicable on foreigh as well as on
domestic product. Here the Spain measure is that the all herbal teas should be
subject to specific authorisation by agency. So it's obvious not QR it MEQR as there
is an authorisation requirement that hinder goods from market as opposite to ban or
quota.

Further MEQR is divided into two categories which I already discussed above. Here
the restriction is on both domestic and foreign goods as well. So we are concluding
is as IDAM. In given scenario, the Spain measure is IDAM because Spain has put
restriction that all herbal teas should be subject to authorisation by agency.
Furthermore, it falls under product requirement that is clearly a violation of Art 34.
Moreover, this measure puts dual burden on Zenfit because Zenfit is lawfully
producing it's product in the UK. (Mazzoleni). As Spain is also EU country if one
country accepts it as lawful then other EU countries should accept it as lawful. This
can be seen in case of (Cassis de Dijon) this I have discussed above in detail. Here
Zenfit can argue that putting a dual burden would be injustice. Therefore, this
measure is violating Art 34.

Now we will see possible justification under Art 36 that Spain can use to justify its
measure valid. As this Art 36 definition and aim I have discussed above. Here Spain
can argue on public health exception because it exists under the Treaty in
preference to the mandatory requirement as seen (Aragonesa). However,
mandatory requirement was given in the case of (Dijon), but when we look at our
scenario, Spain measure states there should be the authorisation of herbal tea by
specific agency so that agency can test whether this product is healthy for
consumption or not. However, there is not clearly stated in the fact which concern
Spain has but it can be assumed that Spain is taking Precautionary Measure as
seen in case of (Commission V Denmark), here court stated country can take
precise risk to health is a uncertain. Therefore, here Spain can argue that there is a
precise health risk and that is the reason herbal teas is subject to authorisation by
government authority. Furthermore, Spain can argue that the measure is for
consumer protection as seen in case of (Walter Rau). Here it can be said that the
reason for authorisation to clear dough whether tea is good for consumption or not.

On the other hand, to assess the justification, the question of proportionality is

important. According to case of (DocMorris NV), the general test involves assessing
whether the protection can be achieved with less restrictions measures. This simple
means, can Spain has another alternative to follow to achieve the goal of measure
than putting restrictions. Moreover, according to ( Commission v France), where it
was said that country should choose the least restriction. See another case
(Commission v Austria), where failure to seek a less restriction measure rendered
the action. As Spain is also applying the requirement of authorization in light of public
health, this may be proportionate because it is not hindering the trade so is a less
restrictive measure. Here, we are leaving on court discretion to decide.