The Competitions and Marketing Authority (“CMA”) has announced it is reviewing the accuracy of environmental claims made in the food and drink sector. Food business operators (“FBOs”) are encouraged to review the green claims policies as a result, or risk being subject to a CMA investigation, which is much more costly and intrusive than an Advertising Standards Agency complaint.
We have previously reported that "the future of food labelling" is moving towards providing consumers with the information they require to make more sustainable purchasing decisions. The challenge is to ensure that the information on the label and on pack is accurate and not misleading. The facts may be more straightforward in terms of mandatory food information, but less so in the evolving area of sustainability, which currently suffers from an absence of shared metrics, meanings and statutory rules to regularise a level playing field. In response, the CMA is now examining the accuracy of green claims made about household essentials, including food and drink.
Classed as 'fast moving consumer goods' (essential items repurchased regularly for daily use), food and drink is being targeted as part of the CMA's most recent review. This analysis will consider environmental claims made both online and in store to determine whether FBOs are complying with UK consumer protection law. In line with the Consumer Protection from Unfair Trading Regulations 2008 and the CMA’s Green Claims Code, environmental claims must:
- Be truthful and accurate: claims must not mislead consumers by giving an inaccurate impression, even if the claims are factually correct. Claims must only give an impression that the product, service, process, brand or business is as green as it really is.
- Be clear and unambiguous: the wording used should be straightforward and transparent, not liable to confuse consumers or give the impression that something is better for the environment than it is.
- Not omit or hide important information: consumers must be provided with the information they need to make informed choices – omitting or hiding information can inappropriately influence consumer decisions.
- Only make fair and meaningful comparisons: linked to the requirement for claims to be truthful and accurate, comparisons should be based on clear, up to date and objective information.
- Consider the full life cycle of the product or service: all aspects of a product or service’s lifecycle may be relevant to the accuracy of a claim including, for example, the manufacture and disposal of the product.
- Be substantiated: claims must be capable of being supported by scientific or other evidence.
The CMA has confirmed that it will consider taking enforcement action against businesses if they uncover evidence suggesting their environmental claims could be unfounded. On 26 January 2023, the CMA confirmed their investigation, launched in 2022, into claims made by three retailers about their fashion products was ongoing. Subsequent penalties, if imposed, can include a criminal record and a fine.
More widely, there is a global movement to ensure that companies are not misleading consumers on environmental claims, yet the standardisation of metrics and terminology would appear to be still some way off. Even methodologies used for measuring sustainability, such as the Higg Index, which is used as a sustainability benchmark for the supply chain of textile products, has been recently criticised. Recent European developments include:
- In Norway, the Norwegian Consumer Authority has stated that the use of this Higg Index methodology for the marketing of environmental benefits can be regarded as misleading.
- Sweden has banned Arla from using the term “net zero” as this is deemed a misleading environmental claim and can give the impression that the milk has no climate footprint at all.
- In France, there is now standardised recyclability labelling, with harmonised symbols being mandatory for household goods packaging (including food and drink, subject to certain exemptions) from 1 September 2022, with a deadline of 9 March 2023 for selling existing stock. Nevertheless, at the end of January 2023, it was reported that the Eco–Score front of pack labelling system (developed along the lines of the Nutri Score label that gives nutritional information) is being challenged in the French courts by several organic associations, who are concerned that the term “eco” is unfair to organic production and deceptive for consumers.
- Italy has also imposed an obligation to display minimum mandatory information on packaging (including food and drink packaging) from 1st January 2023.
The lack of harmonisation across Europe creates problems for FBOs supplying across the various member states, and prompts fears of stock being turned away at the border for being non-compliant. It remains to be seen whether mandatory sustainability labels on food and drink packaging will be imposed in the UK. Some answers may come from the Food Data Transparency Partnership, which had its first meeting this month with a mission to draw up a long-term framework for measuring the key impact the food industry has on the environment and health. In the meantime, FBOs are encouraged to review their practices relating to making environmental claims, including their use of symbols and markings.