Economic analyses of differences in composition of seemingly identical branded food products in the Single Market

Abstract

Differences in composition of seemingly identical, branded food products (DC-SIP) occur when a good is marketed in one country as being identical (labelling, and appearance on packaging) to goods marketed in other countries, while that good has significantly different composition. The DC-SIP issue was brought to policymakers’ attention in 2017 by tests conducted in several Eastern EU Member States, which showed that some brand owners sell products across the EU Single Market, which are of different composition, despite having the same or similar packaging. The European Parliament and the European Council stressed the importance of tackling the issue of dual quality products, and requested that the European Commission investigate these practices, and find a solution at the European level. As a response to this request, the European Commission’s Joint Research Centre (JRC), in collaboration with experts from Member States’ competent authorities and stakeholders in the food chain, developed and applied a harmonised methodology in 2018/2019, with the objective of bringing further evidence on whether the composition of various branded food products differed across Member States. In April 2018, the European Commission tabled a proposal for the amendment of the Unfair Commercial Practices Directive 2005/29/EC, aimed at introducing more specific rules on the DC-SIP issue. The European Parliament and the Council adopted these amendments on 27 November 2019. At the request of the European Parliament, the JRC carried out an economic analysis of DC-SIP in collaboration with DG GROW, to develop a better understanding of the drivers, and of the impact of this phenomenon. This report summarises the main finding of this pilot project. The specific objectives of this project were to: (1) Explain the rationale for brand owners to offer different versions of identically or similarly branded food products in different markets; (2) Analyse the impact of DC-SIP on consumers’ choices and welfare and (3) Identify the main determinants of the occurrence of DC-SIP across Member States.