The European Court of Justice (the ECJ) handed down its judgment in the Syngenta/Agro Trade case on 7 December 2023. That case centres on the question whose information must appear on the label of a plant protection product imported via parallel trade. The key question here is whether that should be the producer’s or the importer’s information. According to the ECJ, a parallel importer of plant protection products may replace the original label with its own. In that case, however, the original batch number must be visible on the label. The Syngenta/Agro Trade judgment highlights the importance of proper labelling for the traceability of plant protection products.
Background: regulation of plant protection products
Under Union law, plant protection products may be placed on the market only if that is permitted in the Member State in question under Regulation 1107/2009. If so, the producers are issued an authorisation licence. Importers may also place a plant protection product on the market, provided that they have obtained a parallel trade permit from the EU Member State in question.
Regulation 547/2011 requires the label of the packaging of plant protection products to include the name and address of the authorisation holder. If that is another party, they must be the name and address of the person responsible for the final labelling of the plant protection product on the market, according to point 1 of Annex 1 to this regulation.
German case
The case in question concerns a dispute between Syngenta and Agro Trade. Syngenta is a producer and distributor of plant protection products and the holder of an authorisation licence. Agro Trade imports and distributes Syngenta's plant protection products in Germany. The importer holds a parallel trade licence for that purpose. The plant protection products are distributed by Agro Trade in the unopened original jerrycans. However, Agro Trade thereby replaces Syngenta’s original label with its own Agro Trade label, including its own name and address. Syngenta wanted Agro Trade to leave the original label, or in any event the name, address and batch number of Syngenta’s formulation, on the packaging. Agro Trade refused to do so, after which Syngenta applied to the German court.
In the appeal pending before the Hanseatische Oberlandesgericht Hamburg, the German court questioned the correct interpretation of Regulation 547/2011. It wanted to know whether that regulation allows an importer importing a plant protection product into an EU Member State on the basis of a parallel trade permit to replace the name and address of the authorisation holder in the EU Member State of origin on the product with its own name and address. The German court presented that question to the ECJ.
ECJ Judgment in Syngenta/Agro Trade
The ECJ provided clarity in its judgment.
- First, the ECJ found that an importer, such as Agro Trade, that imports a plant protection product into an EU Member State on the basis of a parallel trade licence is responsible for placing that product on the market in a Member State. In light of the wording and context of Regulation 547/2011, such an importer may therefore replace the name and address of the authorisation holder in the EU Member State of origin on the packaging of that product with its own name and address.
- Second, the ECJ found that such an importer does have to ensure that the plant protection product can be traced and effectively controlled, because the objective of the plant protection product legislation is to ensure a high level of protection of human and animal health and the environment. The original batch number, affixed to the packaging by the authorisation holder, therefore may not be replaced, since only that number allows the competent authorities immediately to withdraw the product from the market in a targeted manner, if necessary.
In sum:
- An importer that introduces a plant protection product in an EU Member State on the basis of a parallel trade permit may replace the producer’s original label with its own label (bearing its own name and address); provided that
- the importer always states on the packaging the batch number originally assigned by the producer.
The Syngenta/Agro Trade judgment clarifies the interpretation of the labelling rules for plant protection products. This is important in practice because correct labelling of plant protection products is strictly controlled. The conclusion is that the label must always make it clear who is ultimately responsible for the product, and that the product must be easily traceable to its origin at all times, to ensure a high level of protection of human and animal health and the environment, within the European Union.
(Online) parallel imports and the cartel prohibition
It is clear from the above that the producer of a plant protection product cannot obligate an importer that imports the plant protection product under a parallel trade licence to keep the original label. But what about pricing and online sales?
Restrictions by the producer of the importer’s freedom to set its own (online) sale/resale price may amount to unlawful resale price maintenance. The cartel prohibition, set out in Article 6 of the Mededingingswet (Competition Act) and in Article 101 TFEU, bans vertical price maintenance or resale price maintenance (RPM). The producer of a plant protection product therefore may not force independent resellers (importers) to sell/resell their products at a fixed price, or only above a certain price.
The cartel prohibition provides that a producer may not deny independent resellers of a plant protection product the possibility of parallel trade as such. The same applies in the online environment: an outright ban on online sales may not be imposed on a reseller, for instance. It is possible, however, in the case of a purely selective distribution system, for a supplier to restrict the sales circle of a selective distributor and to call it to account for supplying an unauthorised selective distributor.
The European Commission and the Netherlands Authority for Consumers & Markets (ACM) may impose high fines for violations of the cartel prohibition. More information on the permissibility of agreements between suppliers and distributors can be found here.
Supervision of plant protection products in the Netherlands
In the Netherlands, the College voor de toelating van gewasbeschermingsmiddelen en biociden (Board for the Authorisation of Plant Protection Products and Biocides; Ctgb) assesses whether plant protection products and biocides are safe for humans, animals and the environment, and can therefore be sold and used. The Nederlandse Voedsel- en Warenautoriteit (Netherlands Food and Consumer Product Safety Authority; NVWA) checks whether companies use only authorised plant protection products and whether they do so correctly. The NVWA also checks that the labels are correct.
The NVWA is concerned about compliance with plant protection product legislation in the Netherlands. According to the NVWA, it is apparent from 500 inspections it has carried out in the Netherlands that about a third of the growers inspected insufficiently comply with the applicable laws and regulations for plant protection product.
The NVWA is negotiating with trade associations to improve that compliance. It is also considering higher penalties and active disclosure of violations, among other things. The NVWA furthermore recently announced it would carry out more inspections of illegal trade in plant crop protection products in the coming years.
A practical overview with key points of interest in enforcement and recalls by the NVWA can be found here.
For more information on dawn raids by the NVWA go to invalnvwa.nl or watch this video briefing with practical tips. Tips in the event of a raid by the ACM or the European Commission can be found in this video.
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