Packaging Over Reformulation: EU Food Companies' Strategy to Address Dual Quality

The study by the European Commission's Joint Research Centre reveals that while the EU's Unfair Commercial Practices Directive has reduced instances of dual food quality, most companies opt to modify packaging rather than reformulate products. This strategy allows them to address regulatory requirements with minimal cost while maintaining market segmentation across different EU regions.

The study, conducted by the Joint Research Centre of the European Commission in Seville, Spain, explores how food companies in the European Union (EU) have responded to regulatory pressure concerning the issue of "dual food quality." This term refers to branded food products being sold with identical packaging but differing compositions across various EU Member States. The issue gained public attention in 2017 when Eastern European countries accused food companies of selling them lower-quality products compared to Western Europe, despite similar packaging. The research focuses on how companies have adjusted their strategies, particularly in response to the EU’s Unfair Commercial Practices Directive (UCPD), which was amended in 2019 to address dual food quality concerns. Companies were required to comply with these changes by 2022.

Growing Tensions Between East and West over Food Quality Disparities

The issue of dual food quality created significant tension within the EU, especially between Eastern and Western Member States. In response, the European Commission launched EU-wide testing campaigns in 2018/2019 to collect evidence on differences in product compositions across countries. These campaigns revealed that 31% of tested products had different compositions, despite their identical packaging. As a result, the European Commission amended the UCPD to require companies to disclose significant differences in product composition that could influence consumer purchasing decisions. By the 2021 testing campaign, the occurrence of dual food quality had decreased to 24%, indicating the regulatory amendments had made some impact.

Packaging Over Reformulation: The Strategy Most Companies Chose

The study analyzed data from the 2018/2019 and 2021 testing campaigns to assess how companies responded to the UCPD, specifically whether they had reformulated products or changed packaging. The findings show that companies were more likely to modify front-of-pack labeling than to reformulate their products. This suggests that many firms preferred visual differentiation over harmonizing product compositions across the EU. Although simultaneous changes to both recipe and packaging occurred, they were not common across the board. Companies often justified compositional differences by citing national regulations, availability of ingredients, and variations in consumer preferences across Member States.

Dual Food Quality Still Prevalent, Despite Regulatory Influence

While the UCPD influenced corporate behavior, the study found that it was not the primary driver for changes in product composition or packaging. Companies had several ways to address dual food quality, including modifying packaging, harmonizing recipes, or informing consumers about product differences. The research indicates that many businesses chose to adjust packaging, which required fewer resources than recipe reformulation. Larger companies were more likely to make changes overall, although they also leaned towards packaging modifications rather than reformulating products.

The study also found that changes were more prevalent in Eastern Europe, where dual food quality had caused the most concern. Even so, companies preferred to alter packaging rather than the composition of products in these markets, further highlighting their strategy of market segmentation based on regional preferences and regulatory environments.

Consumer Protection and Corporate Flexibility: A Balancing Act

This research contributes to the ongoing discussion on consumer protection and corporate responses to regulation. Prior studies have shown that dual food quality can impact consumer welfare, depending on how consumers perceive differences in product composition. In some cases, consumers may feel deceived, leading to a loss of trust in the brand. The UCPD gives companies flexibility to address dual food quality issues without major impacts on profits. Many firms comply with the directive simply by informing consumers about compositional differences, avoiding costly product harmonization.

The study shows that while the occurrence of dual food quality has decreased since the introduction of UCPD provisions, most companies are using packaging changes to comply with the regulation. This indicates that the UCPD, though effective in reducing dual food quality, has not been a major driver of product reformulation. Instead, companies continue to justify compositional differences based on market conditions, with the directive providing sufficient flexibility to address the issue without significant cost. The study calls for clearer guidelines and more standardized enforcement to ensure better transparency for consumers and prevent companies from relying solely on superficial packaging changes as a solution to dual food quality.