Ruling of the Grand Chamber of the EU Court of Justice in Organic Food Labelling: International Trade-Related Implications

Historical development on international trade cooperation on food products 

Since the early 1960s, countries representing over 99 per cent of the world’s population have agreed upon international technical standards relating to food production, labelling, and safety, called the Codex Alimentarius. The Codex Alimentarius covers almost 200 food commodities and more than 300 food additives to facilitate international trade of food products and animal feeds. 

Legislatures and policymakers have championed transparency in food labelling to empower consumers to make more informed choices about their diet and overall well-being. The provenance of food products is a key consideration for consumers. Consumers may choose organic foods because of their perceived health benefits and environmental sustainability. To this end, EU law governing the production, certification, labelling, and advertising of organic food and animal feed requires the EU’s organic production logo (the ‘EU Organic Logo’) to be applied to most organic products, which gives a coherent visual identity to organic products produced in the EU. 

The EU has maintained organic equivalency agreements with certain of its key trading partners, pursuant to which both jurisdictions recognize each other’s organic production rules as equivalent under their respective rules, in accordance with Article 33(1) of Regulation (EC) No 834/2007. These equivalency agreements are intended to facilitate cross-border trade. 

Specifically, since 2012, the United States–European Union Organic Equivalence Arrangement (the ‘Equivalence Arrangement’) has facilitated trade in organic products between the U.S. and EU. The EU also maintains an equivalence agreement with the UK—the Trade and Cooperation Agreement—which establishes a reciprocal recognition of equivalence of the jurisdictions’ organic legislation and control system; such recognition was confirmed in December 2023 in view of new EU rules for organic products. Additionally, the U.S. has its own organic equivalence arrangements with the UK, Canada, Japan, the Republic of Korea, Switzerland, and Taiwan, and the EU also has similar agreements with Chile and Switzerland. 

In order to remove trade barriers, international trade law develops the concept of ‘equivalence,’ meaning that one country recognises another’s regulatory standards as sufficient, even if not identical, for certain goods and services. Traders will need to comply with only one set of requirements. The interpretation of ‘equivalence’ has been the subject of a decision of the Committee on Sanitary and Phytosanitary Measures, an international specialised body overseeing the implementation of the Trade and Cooperation Agreement concerning food safety and animal and plant health standards.   

Recent EU Court of Justice (CJEU) Grand Chamber Ruling in Case C‑240/23 Herbaria Kräuterparadies GmbH v Freistaat Bayern (the ‘Herbaria Case’)

The Herbaria Case arises from a dispute between a manufacturer, Herbaria Kräuterparadies GmbH, and Freistaat Bayern (the State of Bavaria, Germany). Herbaria produces a beverage consisting of fruit juice and organically-produced herbs ‘Blutquick’. Blutquick is also fortified with non-plant vitamins and iron as food supplements, both of which do not come from organic farming. Blutquick’s packaging contained the EU Organic Logo. The Bavarian Regional Office for Agriculture took the view that Blutquick products did not comply with EU law requirements for Blutquick products to bear the organic logo.

Herbaria contended that its competitor products comparable to Blutquick that are imported from the U.S. (pursuant to the Equivalence Agreement) are not subject to such a prohibition on the use of the EU Organic Logo. Therefore, permitting such U.S.-originating products to use the EU Organic Logo would constitute impermissible unequal treatment between Blutquick and the competitor products manufactured in the U.S. The State of Bavaria disagreed with Herbaria’s interpretation of Regulation 2018/848 and contended that a product originating in the U.S. could bear the EU Organic Logo only if it satisfied the EU organic production rules. 

The case was initially heard by Germany’s Federal Administrative Court, which requested the CJEU to provide a preliminary ruling on, among other questions, whether a product imported from outside the EU satisfying the equivalent requirement, but not meeting every EU law requirement for organic production, could bear the EU Organic Logo.

Given the significance of this matter for international trade, the request for a preliminary ruling from the German Administrative Court was heard by the Grand Chamber of the CJEU, led by the CJEU President.

In its decision, the CJEU held, among other findings, that:

• The concept of ‘equivalence’ of a non-EU country’s production rules presupposes that the non-EU country pursues the same objectives and observes the same principles related to organic production, by applying rules which ensure the same level of conformity required by the EU legislation for organic products manufactured in the EU.
• While imported food products may meet the equivalent production requirements in an exporting country, meeting such non-EU requirements does not necessarily mean that the production method complies fully with the EU law requirements for organic production. Accordingly, the EU Organic Label should not be used for imported food products that do not comply with EU organic production requirements. 
• However, the organic production logo of an exporting third country (for example, the United States’ organic label) may be used in the EU for that product, even where that logo contains terms referring to organic production.

International Trade and Regulatory Implications

The CJEU’s ruling in the Herbaria Case indicates that food products meeting the requirements to use an ‘organic’ logo in a third country, such as the U.S., if such products contain added vitamins and/or minerals from non-plant origin, may not bear the EU Organic Logo, notwithstanding any organic equivalency agreements between the EU and such third country. 

The CJEU’s ruling may have lasting implications for trade in the EU market and in other countries*.Organic equivalence agreements like the Equivalence Arrangement allow for trade between markets without the added burden of redundant national certifications throughout the supply chain. 

Under the Equivalence Arrangement, organic products meeting the U.S. Department of Agriculture (USDA) or EU organic standards may be sold and labelled as organic in both the U.S. and the EU. The Equivalence Agreement has streamlined trade between the world’s two largest organic markets**.

Current U.S. National Organic Program regulations permit products with the USDA ‘organic’ label to be fortified with vitamins and minerals. While the Equivalence Arrangement contemplates certain exceptions called ‘critical variances’ (i.e., an identified variance between two regulations that remains unresolved in an equivalence judgment and therefore constitutes an exception to the equivalence arrangement), organic products that have been fortified with vitamins and/or minerals from non-plant origins have not been deemed a ‘critical variance’ under the Equivalence Arrangement. 

There remains uncertainty as to whether the CJEU’s ruling in the Herbaria Case will apply (i) only to fortified foods sold in the EU, (ii) to all processed foods sold in the EU, or (iii) to all products sold in the EU by a manufacturer that sells any organic products in the EU. Companies based in the U.S. that export food products to the EU rely on the Equivalency Arrangement to trade in a wide range of products. 

The European Commission is expected to present its interpretation of the CJEU’s judgment to EU member states, which we anticipate will provide more clarity on the implications of the Herbaria Case ruling. In the meantime, certain U.S.-based manufacturers have begun exploring product reformulations to comply with EU Organic Logo requirements. 

Ropes & Gray is monitoring developments related to the Herbaria Case, international trade, and regulatory implications for the life sciences industry. Please contact the authors of this alert or your usual Ropes & Gray advisor with any questions related to this matter. 

*Alexis Bramley, Recent EU Ruling on Labeling of Organic Products: Potential Impacts to U.S. – EU Trade and Organic Equivalence, American AG Network (24 January 2025), available here.

**Katarina Von Witzke, Report: EU Organics Market Begins to Recover, U.S. Dep’t of Agric. Foreign Agric. Serv. (7 February 2025), available here.

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