Canada: Proposed amendments to Food and Drug Regulations

Introduction

On 30 March 2019 Health Canada released its proposed Regulations Amending the Food and Drug Regulations (Improving Access to Generics). Comments may be submitted until 8 June 2019.

The proposed regulations clarify and codify Health Canada's expectations and policies regarding differences in the form of medicinal ingredients in generic drug products that are eligible for submission under the abbreviated new drug submission (ANDS) pathway by introducing a regulatory definition for 'therapeutically active component'. Most significantly, generic drugs which have a different salt form from the medicinal ingredient in the Canadian reference product are eligible for submission as an ANDS under the proposed regulations. Further, the proposed regulations streamline identifying and labelling practices relating to the medicinal ingredient content in drug products and amend the definition of 'innovative drug' in the data protection provisions of the Food and Drug Regulations.

The proposed regulations follow Health Canada's 2017 consultations regarding generic equivalence. In 2017 Health Canada separately issued an Updated Notice: Interim Policy on Health Canada's Interpretation of Medicinal Ingredient and Assessment of Identical Medicinal Ingredient (for further details please see "Updates from Health Canada").(1)

ANDS submission pathway

Under the current Food and Drugs Regulations, to be eligible for assessment under the ANDS pathway, a generic drug product must be the pharmaceutical equivalent of the Canadian reference product (CRP). 'Pharmaceutical equivalent' is defined as follows:

a new drug that, in comparison with another drug, contains identical amounts of the identical medicinal ingredients, in comparable dosage forms, but that does not necessarily contain the same non-medicinal ingredients.

Non-biologics Under the proposed regulations, generic drug products, excluding radiopharmaceuticals and biologics, may be the subject of an ANDS if the new drug has identical amounts of identical therapeutically active components instead of identical medicinal ingredients like the CRP.

'Therapeutically active component' is defined as "a medicinal ingredient, excluding those appended portions, if any, that cause the medicinal ingredient to be a salt, hydrate or solvate".

Generic drug products with the following differences in the medicinal ingredient can be filed through the ANDS pathway:

• different hydrated or solvated forms;
• different polymorphic forms; and
• different salt forms.

Generic drug products with the following differences in the medicinal ingredient cannot be filed through the ANDS pathway:

• different complexes;
• different clathrates;
• different esters; and
• different isomers or mixtures with different proportions of isomers.

According to the Regulatory Impact Analysis Statement accompanying the proposed regulations, complexes, clathrates and esters were excluded from the definition because they do not dissociate to yield identical therapeutically active components in solution. Isomers were also excluded as they can have different pharmacological activities.

The proposed regulations specify that a reference to a new drug's 'medicinal ingredient' is a reference to the form of the medicinal ingredient in the dosage form of the new drug as determined by the minister, considering the manufacturing method and the controls used in the manufacture of the dosage form. In contrast to Health Canada's prior policies, the medicinal ingredient may not be the form of the medicinal ingredient used as the raw material input to manufacture the dosage form.

If there are reasonable grounds to believe that there is a difference between the medicinal ingredient in the generic drug and the CRP, the minister can request the generic drug manufacturer to provide information that demonstrates that any differences are inconsequential to the safety and effectiveness of the new drug.

Further, where there is a difference between the medicinal ingredients of the generic drug and the CRP, the notice of compliance for the generic drug will state any differences from the CRP.

Biologics The proposed amendments specify that the ANDS pathway is unavailable to drugs included in Schedule D to the Food and Drugs Act, commonly known as 'biologics'. However, the Regulatory Impact Analysis Statement states that:

the proposed amendments would not prevent a manufacturer from filing an ANDS for a drug that is not referred to in Schedule D (e.g. a chemically synthesized drug), where the CRP is a drug referred to in Schedule D.

Radiopharmaceuticals The existing definition of 'pharmaceutical equivalent' will continue to apply to radiopharmaceuticals (Schedule C drugs).

Labelling medicinal ingredients and therapeutically active components

As proposed, the labelling requirements will be updated to require a list of both the medicinal ingredient's name and a quantitative list of the therapeutically active components on drug labels where the drug product's medicinal ingredient, as determined by the minister, is different from the therapeutically active component.

The labelling requirements would apply to all new drugs authorised pursuant to Division 8 of the Food and Drug Regulations, not just generic drug products. According to the Regulatory Impact Analysis Statement, this will create a consistent practice for the expression of strength.

Data protection

It has been proposed that the definition of 'innovative drug' be amended to align the variations terminology (ie, the kinds of variation of a previously approved medicinal ingredient that precludes the grant of data protection) with the new definition of 'therapeutically active component, while maintaining the variations referred to in the original 2006 definition of 'innovative drug'.

The current version of Section C.08.004.1(1) defines 'innovative drug' as:

a drug that contains a medicinal ingredient not previously approved in a drug by the Minister and that is not a variation of a previously approved medicinal ingredient such as a salt, ester, enantiomer, solvate or polymorph.

The proposed version of Section C.08.004.1(1) defines 'innovative drug' as follows:

a drug that contains a medicinal ingredient not previously approved in a drug by the Minister and that is not a variation of a previously approved medicinal ingredient...

variation includes, for the purposes of the definition innovative drug,

(a) an enantiomer or a mixture of enantiomers;

(b) a polymorph;

(c) a medicinal ingredient that, when compared to a previously approved medicinal ingredient, is identical, excluding those appended portions, if any, that cause either medicinal ingredient to be a salt, ester, hydrate, or solvate; or

(d) any combination of the variations found in paragraphs (a) to (c).

Therefore, the proposed amendments specify that variations include a "mixture of enantiomers" and "any combination of the variations found in paragraphs (a) to (c)".

Transitional provisions

The proposed regulations will apply only to drug submissions filed after the regulations come into force (ie, 90 days after the day on which they are registered).

Related Health Canada draft guidance documents

Health Canada is also holding a consultation on two related draft guidance documents:

• Draft Guidance Document: Generic Drug Equivalence: Medicinal Ingredients; and
• Draft Guidance Document: Identifying and Labelling Medicinal Ingredients in New Drug Products.

The consultation period will be open until 17 June 2019.

Endnotes

(1) An unofficial consolidated version of the relevant Food and Drug Regulations sections which incorporates the proposed amendments is available here.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.

To view all formatting for this article (eg, tables, footnotes), please access the original here.

Smart & Biggar/Fetherstonhaugh - Urszula Wojtyra

FRANCE: Ordonnance du 24 avril 2019 : ce qui change en matière de « transparence dans la relation commerciale »

PUBLIÉ DANS DROIT COMMERCIAL ET ÉCONOMIQUE

L’ordonnance n° 2019-359 du 24 avril 2019 (JO du 25 avril), refond entièrement le Titre IV du Livre IV du Code de commerce relatif à la transparence, aux pratiques restrictives de concurrence et aux autres pratiques prohibées.

Nous traitons ici du Chapitre 1 relatif à la transparence dans les relations commerciales, à savoir, les CGV, la convention unique, les factures et délais de paiement. Ce chapitre 1 est divisé en plusieurs sections et sous sections.

LES CONDITIONS GÉNÉRALES DE VENTE (Section 1)

L’ordonnance crée un nouvel article L.441-1 du Code de commerce organisé en quatre parties distinctes :

1.     Le contenu des CGV, comprenant les conditions de règlement ainsi que les éléments de détermination du prix, et notamment le barème des prix unitaires et les éventuelles réductions de prix. Lorsque le prix d’un service ne peut être déterminé a priori, le prestataire de services est tenu de communiquer la méthode de calcul du prix ou un devis ;

2.     L’obligation de communication des CGV (sur un support durable) à tout acheteur qui en fait la demande. Les conditions générales de vente peuvent être différenciées selon les catégories d’acheteurs de produits ou de prestations de services ;

3.     Le rôle des CGV, qui comme par le passé, doivent constituer « le socle unique de la négociation commerciale » ;

4.     La sanction du défaut de communication des CGV par une amende administrative (et non plus civile) ne pouvant excéder 15 000€ pour une personne physique et 75 000€ pour une personne morale, prononcée par la DGCCRF.

LA NÉGOCIATION ET LA FORMALISATION DE LA RELATION COMMERCIALE (Section 2)

Conventions écrites (Sous-section 1)

La nouvelle ordonnance réorganise et modifie les dispositions relatives à la convention unique avec les nouveaux articles L.441-3 et suivants du Code de commerce.

L’article L.441-3 fixe les règles générales s’appliquant (hors produits agricoles et denrées alimentaires) à tout distributeur, qu’il soit grossiste ou détaillant :

·         Pour l’essentiel les principes restent inchangés, notamment concernant la durée de tels contrats ou le fait qu’ils doivent être conclus soit avant le 1er mars, soit dans les 2 mois d’un cycle de commercialisation. En revanche, les CGV n’ont à être communiquées que dans un délai raisonnable avant ces dates.

·         Les avenants au contrat devront être faits par écrit, ce qui doit permettre de s’assurer que ces derniers ne remettent pas en cause l’économie générale du contrat.

·         En ce qui concerne les prix : (i) la convention peut dorénavant prévoir les modalités selon lesquelles des conditions dérogatoires de l’opération de vente sont applicables, (ii) les services de « coopération commerciale » entrent également dans la détermination du prix et (iii) il n’est plus fait mention de la date d’effet des prix comme c’était le cas dans la relation avec les détaillants.

·         Lorsqu’elle est conclue pour une durée de deux ou trois ans, la convention fixe les modalités selon lesquelles le prix convenu est révisé. Ces modalités peuvent prévoir la prise en compte d’un ou de plusieurs indicateurs disponibles reflétant l’évolution du prix des facteurs de production.

Des dispositions supplémentaires figurant au nouvel article L.441-4 s’appliquent aux relations avec les détaillants lorsque la convention porte sur des « produits non durables à forte fréquence et récurrence de consommation » (dont la liste sera fixée par décret) :

·         Le Code définit le terme de grossiste, auquel ce régime ne s’applique pas.

·         Le barème de prix n’a pas besoin d’être joint à la convention, si celle-ci précise les modalités de consultation du barème ayant servi de base à la négociation.

·         Les conventions devront fixer le chiffre d’affaires prévisionnel annuel et, le cas échéant, ses modalités de révision. Il constitue, avec l’ensemble des autres obligations fixées par la convention, le « plan d’affaires ».

·         La date d’entrée en vigueur de chacune des obligations prévue pour les différents services du distributeur est « concomitante à la date d’effet du prix convenu », ce dernier s’appliquant au plus tard le 1^er Les dispositions relatives aux conditions dérogatoires de l’opération de vente (visées ci-dessus) ne sont pas applicables.

·         Le fournisseur communique ses CGV au distributeur au plus tard trois mois avant le 1^er mars ou deux mois avant le point de départ de la période de commercialisation. Le distributeur dispose d’un délai raisonnable à compter de leur réception pour notifier par écrit les motifs de refus de ces dernières ou, le cas échéant, les points qu’il souhaite négocier.

·         La règle sur les mandats relatifs aux avantages accordés aux consommateurs ou nouveaux instruments promotionnels (NIP) s’applique dans ce cadre. Comme par le passé, une limitation dans leur montant s’applique à certains produits agricoles.

Les conventions entre fournisseur et distributeur portant sur des produits alimentaires sous marque blanche (ou marque distributeur) doivent, selon le nouvel article L.441-7, mentionner le prix ou les critères et modalités de détermination du prix d’achat des produits agricoles entrant dans la composition de ces produits alimentaires.

Pour rappel, le Code de commerce impose aussi des obligations relatives aux conventions pour la conception et la production de produits manufacturés fabriqués à la demande de l’acheteur en vue d’être intégrés dans sa propre production, qui figurent dorénavant à l’article L.441-5.

La sanction du non-respect des dispositions sur les conventions (à l’exception de celles portant sur des produits alimentaires sous marque blanche) est une amende administrative (et non plus civile) ne pouvant excéder 75 000 € pour une personne physique et 375 000 € pour une personne morale, prononcée par la DGCCRF. Le maximum de l’amende encourue est porté à 150 000 € pour une personne physique et 750 000 € pour une personne morale en cas de réitération du manquement dans un délai de deux ans à compter de la date à laquelle la première décision de sanction est devenue définitive.

Clause de renégociation (Sous-section 2)

L’article L.441-8 sur la renégociation dans les contrats d’une durée d’exécution supérieure à trois mois portant sur la vente des produits agricoles et alimentaires figurant sur une liste fixée par décret, reste inchangé.

LA FACTURATION ET LES DÉLAIS DE PAIEMENT  (Section 3)

Facturation (Sous-section 1)

L’ordonnance du 24 avril 2019 procède à une harmonisation et une clarification des règles de facturation par le biais du nouvel article L.441-9 du Code de commerce :

·         Pour la date d’émission de la facture, il est fait référence au Code général des impôts, selon lequel la facture est émise «dès la réalisation de la livraison ou de la prestation de services » (article 289 I. 3° du CGI). Selon l’article 256 II. 1° du même code, « est considéré comme livraison d’un bien, le transfert du pouvoir de disposer d’un bien corporel comme un propriétaire ».

·         Le Code précise l’intégralité des mentions obligatoires d’une facture et en ajoute deux : l’adresse de facturation de l’acheteur et du vendeur lorsqu’elle est différente de leur adresse ainsi que le numéro de bon de commande s’il a été préalablement établi par l’acheteur.

·         Transformation de la sanction pénale en sanction administrative: l’amende reste à 75 000 € pour les personnes physiques et passe à 375 000 € pour les personnes morales. Le montant maximum encouru est doublé en cas de réitération du manquement dans un délai de 2 ans à compter de la date à laquelle la première décision de sanction est devenue définitive. Elle est prononcée par la DGCCRF.

Délais de paiement (Sous-section 2)

Les dispositions sur les délais de paiement et intérêts de retard figurent désormais aux articles L.441‑10 à L.441-16, y compris la nouvelle procédure de rescrit en matière de délais de paiement créée par la loi du 10 août 2018 dite « Loi Essoc » (article L.441-15). La sanction reste inchangée.

Contact : stephanie.faber@squirepb.com

Case Summary (Canada): The obligations of a liquor establishment to its patrons– an appeal from the decision of the Ontario Licence Appeal Tribunal

The Registrar appealed a decision of the Ontario Licence Appeal Tribunal, which directed it not to suspend the liquor licence of an establishment. In making its decision, the court concluded that a liquor establishment, under section 45 of the applicable regulation, did not have an obligation to ensure that patrons arrive home safely or to ensure that they safely depart their premises.

Administrative law – Decisions reviewed – License Appeal Tribunal – Compliance with legislation – Judicial review – Appeals – Standard of review – Reasonableness

Ontario (Registrar, Alcohol, Gaming and Racing) v. 1146587 Ontario Ltd. (c.o.b. The Royal Oak), [2019] O.J. No. 1336, 2019 ONSC 1469, Ontario Superior Court of Justice, March 18, 2019, K.E. Swinton, G.M. Mulligan and R.M. Raikes JJ.

The Registrar, Alcohol, Gaming and Racing (the “Registrar”) appealed a decision of the Ontario Licence Appeal Tribunal (the “Tribunal”), which directed the Registrar not to suspend the liquor licence of the respondent, The Royal Oak. The basis for the proposed suspension was the allegation that The Royal Oak had violated section 45(1) of the O. Reg 719/90 made under the Liquor Licence Act, R.S.O. 1990, c. L.19. That section states that a licence holder shall not:

… permit drunkenness, unlawful gambling or riotous, quarrelsome, violent or disorderly conduct to occur on the premises or in the adjacent washrooms, liquor and food preparation areas and storage areas under the exclave control of the licence holder.

The incident occurred on December 11, 2016. A regular patron of the bar was served four 24-ounce beers. By the fourth beer, the server noticed the individual was showing signs of intoxication so took away the beer. The patron resisted. He left the bar approximately 15 to 20 minutes later. Staff helped him put on his coat and watched him leave. When he left, he was still showing signs of intoxication (stumbling). The patron was reported missing a few days later. Tragically, his body was found a few days later covered in snow on a well-used path near the bar.

The central issue before the court was whether section 45(1) of the Regulation imposed an obligation on The Royal Oak to ensure that the patron arrived home safely or at least reached a safe place. The Registrar argued that there was an ongoing responsibility on liquor establishments to ensure the safety of patrons after they depart the premises. The Royal Oak argued that such an interpretation was too broad, imposed an impossible burden on liquor establishments and was otherwise not supported in the case law that has interpreted section 45(1) of the Regulation. The court agreed.

The court held that there were two obligations imposed on a licence holder under section 45(1): the licence holder must not permit drunkenness in the premises and it must safely remove a drunken patron within a reasonable period time. The court, however, disagreed that this latter obligation required the licence holder to ensure that the patron arrives home safely or at least reaches a safe place, as the Registrar argued. The court said such an interpretation was not supported by the language of the Regulation, in the case law and would impose an unreasonable burden on the licence holder that it could unlikely ever satisfy. The court stated that section 45(1) is regulatory in nature and that if the legislature had wanted the provision to be remedial – which it suggested the Registrar was promoting through its broad interpretation – it would have used clear and express language, which it did not.

The court dismissed the appeal and awarded costs to the respondent.

This case was digested by Adam R. Way, and first published in the LexisNexis® Harper Grey Administrative Law Netletter and the Harper Grey Administrative Law Newsletter. If you would like to discuss this case further, please contact Adam R. Way at away@harpergrey.com.

away@harpergrey.com

New breeding techniques and regulation of genetically modified organisms

Background

The recent European Court of Justice's (ECJ's) ruling in Confédération paysanne v Premier ministre(1) regarding the status of organisms obtained by new breeding techniques as genetically modified organisms (GMOs) has again brought the scope of the South African GMOs Act (15/1997) into question.

New breeding techniques include many new and sophisticated tools for genome editing, for example:

• zinc-finger nucleases;
• transcription activator-like effector nucleases; and
• clustered regularly-interspersed short palindromic repeats.

The difficulty with regulating organisms created through such techniques is that these organisms may be indistinguishable from organisms which have naturally evolved.

This question fundamentally relates to:

• the definition of 'GMOs' in the GMOs Act and which organisms will fall within this definition and be regulated as GMOs under the GMOs Act; and
• which organisms will be excluded from the application of the GMOs Act.

Interpretation of statutes

The ECJ ruled that:

• all organisms obtained by mutagenesis are GMOs insofar as the techniques and methods of mutagenesis alter an organism's genetic material in an artificial way; and
• only organisms obtained through techniques or methods of mutagenesis, which have conventionally been used in a number of applications and have a long safety record, are excluded from the scope of the EU GMO Directive.

This ruling shows that clear consideration has been given to the risks or hazards to health and the environment.

The ECJ's decision is relevant to the South African position, since the definition of 'GMOs' in the EU directive (ie, "an organism, with the exception of human beings, in which the genetic material has been altered in a way that does not occur naturally by mating and/or natural recombination") is almost identical to the South African GMOs Act's definition of a 'GMO' (ie,"an organism the genes or genetic material of which has been modified in a way that does not occur naturally through mating or natural recombination or both").

South Africa has a holistic strategy to interpreting statutes based on a constitutional, contextual or purposive approach. The ordinary grammatical meaning of words and phrases must be interpreted in the context of:

• the act;
• the act's regulations and any supporting guidelines;
• historical factors relevant to the legislature's meaning when drafting the legislation; and
• present government policy.

Notably, the South African Constitution compels the interpreter to consider the spirit, purport and objects of the South African Bill of Rights, including the democratic values of human dignity, equality and freedom when interpreting legislation. Further, the Constitution provides that when interpreting any legislation, every court must prefer any reasonable interpretation of the legislation that is consistent with international law over any alternative interpretation that is inconsistent with international law.

Meaning of 'GMO'

In the context of an initial grammatical interpretation of 'GMO' as defined in the GMOs Act, it is unclear whether a 'trigger' must be:

• product-based (ie, the organism must still contain the modification of the gene or genetic material modification for the act to apply); or
• process-based (ie, the genes or genetic material of the organism must at some stage have been modified, but need not still be modified, for the act to apply).

Further, the phrase "modified in a way that does not occur naturally through mating or natural recombination or both" is also ambiguous. Does it mean that:

• if the modification of the genes or genetic material is outside of what may occur through natural mating or recombination, then the organism is genetically modified and therefore regulated; or

• if the modification of the genes or genetic material is performed by artificial or human intervention (ie, not naturally), or is outside of what may occur through mating or natural recombination, then the organism is genetically modified and therefore regulated?

The difference between the two interpretations is that in the first case, an organism with genes or genetic material that has been modified (including by human intervention) but has a natural character that may occur in genes or genetic material by mating or natural recombination would not be a GMO and would therefore not be regulated.

However, if the second case were to be followed, regardless of whether the organism has a genetic modification that occurs naturally, if the modification were artificial (ie, through human intervention), the organism would be a GMO and therefore would be regulated.

The grammatical interpretation of the definition of 'GMO' set out in the GMOs Act and its use throughout the act and its regulations and guidelines appears to provide ample evidence that the GMOs Act aims to regulate not only GMO products themselves, but also activities, including the development and production of GMOs (ie, both a process and product-triggered interpretation).

Further, techniques where recombinant DNA molecules or GMOs are employed in "conjugation, transduction, transformation or any other natural process" are specifically excluded from the application of the GMOs Act. This provides support for the interpretation that only genetic modification that is outside of what might be achieved naturally by mating or natural recombination (ie, 'natural process') is regulated as a GMO.

The GMOs Act's objectives also include the following phrases, which are important for a holistic interpretation:

• "promote responsible";
• "limit possible harmful consequences";
• "effective waste management";
• "risk assessment"; and
• "are appropriate and does not present a hazard".

These phrases indicate that the definition of 'GMO' should be considered in the context of the objectives relating to responsible use and limitation of harm or any hazard to the environment or human and animal health.

This interpretation also aligns with the constitutional imperative to consider the context of the Bill of Rights, under which everyone has the right to:

• an environment that is not harmful to their health or well-being; and
• have the environment protected.

Comment

Therefore, arguably rather than a blanket regulation of non-natural processes (including the use of new breeding techniques) for genetic modification of organisms (or the organisms created by such processes) there is provision within a system that is both process and product-triggered to focus on genetic modification that is likely to be more harmful, hazardous or risky to the environment, human and animal health than that which might be achieved by natural mating or natural recombination. Such an assessment should be performed by the regulator on a case-by-case basis, preferably considering information provided by an application through a preliminary notification procedure.

It will be interesting to follow the development of legislation in this field.

Endnotes

(1) Case C-528/16.

This article was first published by the International Law Office

 Joanne van Harmelen [ENSafrica]

W

Scotland's food and drink: preparing for Brexit

Scotland's food and drink sector, like many others, faces continued uncertainty as the Brexit debate rolls on. The extension agreed until 31 October 2019 means that one cliff-edge has been avoided, but you cannot bet against businesses again facing the prospect of a no deal Brexit in a few months' time. In the meantime there is little clear advice about how businesses can prepare for selling their produce in the EU, an unsatisfactory position for a sector which needs to plan ahead in relation to production, packaging and sales.

There are many issues, but an obvious one is what should go on labels if and when the UK eventually leaves the EU. Although the UK government is emphasising that it will encourage pragmatic enforcement of food labelling rules and that there will be a transition period wherever possible, the EU's approach will depend on whether a deal which addresses labelling issues is agreed before 31 October 2019 (or by any further extension).

One basic but key question is what address(es) to put on the label of a food product. Currently, in order to legally sell pre-packaged products in the EU, you must place the name and address of a "food business operator" on the label. This is the operator under whose name or business name the food is marketed or, if that operator is not established in the EU, the importer into the EU. 

At the moment, this requirement can easily be met by using a UK address. In order to export food to the EU following a no deal Brexit, UK businesses will still have to comply with this mandatory requirement of EU law. It will no longer be enough to include only a UK name and address on the label.

Identifying which EU address to put on the label in this scenario may not be obvious and may depend on how your business and route to market is structured. If you have an existing EU hub for importation and distribution (for example, your own subsidiary or a single importer/distributor in the EU) it may be straightforward to use that company's address. If not, UK government advice is that businesses may need to consider a single hub or importer.

However, many businesses do not operate on the basis of a single EU hub or importer. Goods may enter continental Europe in different ways. Different addresses on labels for each importer may be the clear way to achieve compliance, but may not be practical or desirable for many reasons, including provenance.

A single address (which could be a newly incorporated company or existing subsidiary in an EU Member State), which ensures that consumers and authorities in the EU have an appropriate point of contact in relation to the product, would seem to be a pragmatic and low-risk approach which meets the aim of the relevant food information rules.

However, the reaction of the enforcing authorities across the EU and at customs cannot confidently be predicted. Enforcement of the mandatory food information rules is left to individual Member States. Penalties can be applied for failing to comply with mandatory food information. Currently in Scotland, for example, a person is guilty of an offence for failing to display a mandatory name and address and can be fined up to £5,000. In England and Wales, improvement notices can be used requiring the label to be changed. It is an offence to fail to comply with those notices. Other Member States will have their own rules and enforcement priorities. One might expect enforcement to focus on issues most likely to cause consumer harm, such as incorrect ingredients, rather than a more technical breach in relation to which address should appear on a label.

To complicate matters further, businesses will have to place a UK address on the products in order legally to sell pre-packaged products in the UK. This means that many products will require two addresses, in order to be sold in both the UK and the EU.

Businesses have also expressed concern in relation to the additional cost and burden the following labelling changes will have if the UK exits with no deal:

• Country of origin labels – Food or ingredients produced in the UK following a no deal Brexit could no longer be labelled as of "EU" origin. Businesses would need to change this to "UK" origin for sale in the UK or "non-EU" for certain products to be sold in the EU. Products with the UK mark cannot be sold in the UK until the UK has officially left the EU, although there will be a transition period.
• Products protected by geographical indications (GI) – There are currently 86 UK GI, with 15 relating to Scottish products, for example Arbroath smokie, Scotch whisky and Stornoway black pudding. These will continue to be protected in the UK. However, it is less clear whether they will also continue to receive protection in the EU. In the worst case scenario fresh applications to the EU may be required to be submitted. The EU logo for products protected by GI will also need to be replaced with a UK one. The transition period for this UK requirement is currently proposed by the UK government to be until 2022.
• Packaging of meat, fish and dairy – If you are a producer of fish, meat and/or dairy, the current health/indication mark required by EU law may need to be changed. The current oval shape and the approval number will stay the same; however, the use of "EU" will no longer be correct. You cannot use packaging with the UK mark on it prior to Brexit and there will be no phasing in of the change.

Clearly there may be a range of issues depending on the products, many of which have specific and detailed EU rules with which to comply. The recent political developments may raise hopes that a pragmatic way forward can still be found which avoids a no deal and minimises the impact of Brexit on Scotland's food and drink sector. Adopting the Withdrawal Agreement would mean no changes to labelling are necessary until the end of the agreed transition period (and potentially beyond that if the terms of a deal on the UK's future relationship with the EU so permit). However, until a deal is finally concluded businesses have no option but to continue with their contingency planning.

Melanie Martin and Michael Dean

W