Following the UK’s exit from the EU (Brexit) it was hoped that UK law on drinks labelling would remain closely aligned to EU law for some time, and that the need for suppliers to have different labels for the UK and the EU could be avoided. Nearly a year down the road, however, the likelihood of separate labels being required looks far greater:
- because divergences with potentially significant implications for spirits labelling have already begun to appear
- because of certain differences between the requirements for spirits and those for wine.
Before we look at the specifics, we need to look at how Brexit works from a legislative point of view.
Retained EU law
Brexit was completed at 23.00 UK time on 31 January 2020. The UK-EU Withdrawal Agreement (the EUWA) then came into force and the post-Brexit transition period began. The latter ended at 11.00 pm on 31 December 2020 (IP completion day).
During the transition period, EU law largely continued to apply in the UK, and it remained part of the EU customs union and single market. From IP completion day that ceased: since then the UK’s trade relationship with the EU has been governed by the terms of the UK-EU Trade and Co-operation Agreement. Under the UK’s European Union (Withdrawal) Act 2018 (as since amended), most EU laws that had direct effect in the UK on IP completion day automatically became part of UK domestic law (known as “retained EU law”). On or shortly after that date numerous UK statutory measures took effect modifying retained EU law provisions. These were mostly mechanical changes, to make the retained provisions work as UK domestic law post-Brexit.
The position of Northern Ireland
The EUWA includes a Protocol (the Protocol) setting out arrangements designed to avoid a hard land border between Northern Ireland (NI) and the Republic of Ireland post-Brexit.
The Protocol requires NI to remain aligned to EU single market and customs rules in a number of respects: specified EU laws thus continue to have direct effect in relation to NI, as do post Brexit EU modifications to those laws. Thus the retained EU Regulations governing wine and spirits labelling apply in Great Britain (GB). But the EU Regulations from which they originate continue to apply in NI under the Protocol.
How divergence occurs
So we start from the law being the same in GB and the EU/NI on day one, subject to some mechanical modifications in GB purely to make things work post-Brexit. However:
- where EU regulations were being implemented in stages over time, those parts not implemented at IP completion day will not now take effect in the UK when implemented in the EU. In those cases divergences between UK and EU law will thus emerge unless the UK takes positive steps to keep its domestic law aligned with that of the EU;
- divergences will occur whenever material changes made to EU law are not matched by equivalent changes in retained EU law;
- the UK Government will no doubt want to make substantive changes diverging from EU law – indeed, that was one of the justifications for Brexit.
Divergences affecting spirits labelling
The new EU Spirits Drinks Regulation (Regulation EU 2019/787 replacing Regulation 110/2008) took effect in June 2019 throughout the EU, which at that time included the UK. However, it did so only partially: although certain provisions (relating mainly to Geographical Indications) took effect at that time, the remaining provisions were to do so in May 2021. By then, however, the UK had left the EU. Thus in May 2021 when the implementation of the remaining provisions went ahead in the EU (and in NI under the Protocol), that did not happen in GB. The UK Government has as yet taken no step to introduce domestic legislation to preserve alignment. So R110/2008 has remained in force in GB, other than as replaced by R2019/787 pre-Brexit. In August 2021 R2019/787 was further amended in the EU – those amendments apply in NI but not in GB.
What difference do these divergences make in practice?
As well as modifying the definitions for the various spirit drink categories, R787/2019 as further amended changes the rules on the use of compound terms and allusions in some very detailed and specific ways. Those marketing spirits within both the EU/NI and GB may therefore find they will have no alternative but to use different labels for each market.
(The Gin Guild has published a useful summary of the Differences between the requirements for the British and EU/NI markets with reference to Gin category spirits.)
Fortunately there is a transition period – any product labelled in accordance with the old, GB-retained rules before 31 December 2022 can be marketed within the EU/NI until stocks are exhausted.
However, unless before then positive steps are taken to bring the position in GB domestic law into alignment with that in the EU/NI, or some other means of overcoming the problem is found, different labels will be necessary from January 2023. We understand that the UK Wine and Spirits Trade Association (the WSTA) is urging the Government to tackle the issue sooner rather than later.
The Wine labelling problem
The problem with wine labelling arises from differences between the EU’s rules for wine and its general food rules, which apply to spirits and other alcoholic drinks, regarding who must be identified on labelling as the person primarily responsible for ensuring that both the product and the labelling are legally compliant.
The general food law rule is that the responsible person, who must be identified on labelling, is the “food business operator (FBO)” under whose name the food is marketed, or the importer if that FBO is not in the EU. The rules for wine are more complex and prescriptive, especially regarding identification of an importer or bottler based in the EU.
The UK’s equivalent retained EU law provisions, as modified, permit identification of an importer or bottler based in the EU, GB or NI for wine marketed in GB until 30 September 2022. From 1 October 2022, however, wine marketed in GB must identify an importer or bottler based in the UK.
NB: Legislation approved today by the UK Parliament will extend this until 1 May 2023.
However, the continuing EU provisions require any importer or bottler identified to be based in the EU. The EU regulators’ view is understood to be that only one “importer” can be identified on a wine label. Thus there is a risk that labels identifying importers or bottlers in both the UK and the EU may not be allowed for the EU market. Rather than take that risk businesses may decide to use different labels for the GB and EU markets.
The WSTA has proposed that the UK rules for wine should be brought into line with the general food law rule. If this change were made, labels could identify an FBO for GB and an importer or bottler for the EU/NI. That would obviate the need for different labels, simplify labelling for businesses and consumers, and make it easier to import and export wine between the GB and EU/NI markets.
Having to use different labels for the GB and EU/NI markets will increase both costs and logistical challenges. If adopted by the UK Government, the WSTA’s proposal would avoid the need for different wine labels. It will not solve the problem for spirits labelling however, and the need for different spirits labels from January 2023 will remain a concern unless a solution is found.
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