1 Introduction

‘Les mots et les choses- une archéologie des sciences humaines’,Footnote 1 is the main work of Michel Foucault, famous French philosopher. In connection to the rules and principles that govern European food information law, it is of interest as analogy. In the work, Foucault describes the text found in an ancient encyclopaedia, that makes notice of a categorisation of ‘animals’, including among others animals belonging to the emperor, embalmed animals, tamed ones, porcelain figures, free animals, those that act madly, animals drawn with a very delicate camel brush, etc. If we would be able to suggest a common denominator for the conceptual content of ‘principle’ in law, it possibly would also cover—from a today’s perspective—a weird collection of items which apparently only have the lingual expression in common (like principles of primary law, founding principles, principles for legal design, basic principles of law, food safety principles etc.).Footnote 2 In EU law, the use of the term ‘principle’ is ‘diffuse’.Footnote 3 They are vested in primary law as ‘constitutional principles’,Footnote 4 like freedom, democracy, rule of law, and human rights protection, as well as in secondary law (like in food information law, the scientific domain of this contribution). A clear distinction between rules and principlesFootnote 5 is made by Dworkin,Footnote 6 where principles are norms stating optimization requirements, leaving room for balancing one against another, whereas rules leave no room for partial realization. In this chapter we do not intend to contribute to the “rules-principles” discussion.Footnote 7 We note however that principles can supplement and/or provide a legitimate basis for rule-based regulation,Footnote 8 be used in practice to come to a legal solution by balancing in case rights are competing, but also to supplement substantive regulation in order to close legal gaps. For instance precaution, as a general obligation to reduce the probability of a harm to acceptable levels,Footnote 9 has been fundamental to numerous pieces of substantive and procedural regulation (for instance hygiene standards,Footnote 10 premarket approval of novel foods and of foods containing or derived from genetically modified organisms,Footnote 11 the establishment of border controls,Footnote 12 of a rapid alert system, crisis management and policies in case of emergencies (Articles 50–57 GFL).

Next to their substantive function, principles may be relied on as a last-resort legitimation in case public interference to protect the public from harm is deemed to be necessary, despite the lack scientific evidence, and awaiting results of a thorough risk assessment. In this case, the precautionary principle provides a legitimate base for provisional risk management (Article 7(1) of the GFL). Alternative risk management options are to be weighted using the proportionality principle (Article 7(2) of the GFL).

Principles may supplement or even replace substantive rules and in this way contribute to deregulation and the reduction of regulatory burdens, as is the case with a principles-based enforcement approach.Footnote 13 They also may be used to legitimise a public enforcement policy, for instance on financial marketsFootnote 14 and—empirical object of this contribution—the food sector to ensure ‘a high level of consumer protection’.Footnote 15

In the past, food safety crises, like for instance BSEFootnote 16 and dioxin contaminations,Footnote 17 have triggered the effort to close loopholesFootnote 18 in the normative system that ensures food safety by expanding the predominantly prescriptive, detailed system of safety rules.

This constructive legal effort may be inspired by the belief that a substance-based system of strict rules is best suited to ensure consumer protection and—in doing so—also contributes to market functioning. It certainly is built on fear for public scrutiny in case soft, not-easy-to-enforce, general principles are applied to situations that can endanger public health. However, hard-core rules may induce formal compliance while at the same time avoiding the purpose of a rule.Footnote 19 This is also the case for the information requirements which govern a special segment of food safety law: food information to consumers. In the process of its development, the degrees of freedom for businesses, notably their fundamental right of ‘freedom of speech/expression’ (a fundamental right recognised in many state constitutions, as well as in the Charter of Human Rights) have been limited dramatically.Footnote 20 Despite all this, the occurrence of food safety incidents (like the horse meat crisis of 2013Footnote 21) show that the system of hard-core, black-letter do’s and don’ts is not apt to rule out unsafe foods brought in circulation by fraudulent food business operators. A reactive policy is to try to close the gaps in food (information) regulation by means of even more strict and detailed requirements. We doubt whether this is an effective strategy to protect the consumer and ask ourselves whether an extension of the principles underlying food information regulation can close the remaining gaps in food information law in a more effective way.

This contribution will first in Sect. 2 elaborate on the—in positive law text—stated principles and rules for food information provided to consumers, especially as enshrined in the Food Information to Consumers Regulation (FIC).Footnote 22 Next, in Sect. 3, we will identify legal gaps in food information law by elaborating on food fraud in two forms: by intent and by effect. In Sect. 4 we will introduce the (from financial markets regulation adopted) principle ‘substance over form’, as an alternative for increasing the density of rule-based regulation, to close off escapes for distrustful businesses. In the final remarks Sect. 5 we will discuss the caveats in the reliance on principles when fighting opportunism in information provision.

2 Food Information Regulation and Its Principles

Food information regulation encompasses the establishment of norms for the provision of food information to consumers (i.e., ‘food information law’) and for assurance of control and compliance. Substantive food information requirements have been laid down in hundreds of pieces of mandatory food information regulation. Just like in the General Food law, the primary responsibility for food information is vested on the food business operators, while compliance assurance is primarily a task of national enforcement authorities. The central piece of law governing information provision to (ultimately) the consumer is the FIC, which end 2014 replaced (among others) Directive 2000/13/EC on the labelling, presentation and advertising of foodstuffs.Footnote 23 In December 2016 it has replaced the Nutrition Labelling Directive 90/496/EECFootnote 24 (abbreviated NLD). Scope, principles and horizontal rules for the businesses’ non-commercial food information have been included in a single new act. It serves as a common basis for almost all horizontal food information (this is information regarding all foodstuffs, unless exempted, for instance mineral waters and foods for dietary uses like food for infants or for weight control), as well as vertical food information (that is: specific requirements for a single or a category of foods, like chocolate, orange juice or milk). The integration and improvement effort via the FIC focused at improving the normative system which was (but still remains, albeit to a lesser degree) scattered, complex at places, and incomplete. It also considered new scientific developments in food business and technology.Footnote 25 The EU food information law requirements stand next to the protection of the commercial interests of the consumer, as laid down in Directive 2005/29/EC on unfair business-to-consumer commercial practices (UCPD).Footnote 26 Producer protection is indirectly envisaged by ensuring the functioning of competitive markets via the informed choices of the consumer, but is neither a primary aim of the FIC, nor of the UCPD.Footnote 27

As already indicated, with the FIC, public EU food information regulation has made significant steps forward towards integration, but is still far from an integrated system.Footnote 28 The present patchwork-like structure was induced by economic, historical and functional factors. Economic, because the food information system does not only serve the legitimate interests of consumers, but also tries to strike a balance with the aim of maintaining a free market. In some cases, specific requirements are necessary if both goals are conflicting. Historic, because manifest problems emerging at different times in recent history, required immediate legislative action (like origin labelling for unprocessed beef, Regulation 1760/2000, due to the occurrence of BSE).Footnote 29 Or, otherwise stated by Wright and Head, “institutional change often proceeds inconsistently, with new practices introduced alongside old ones”.Footnote 30 Functional, because the European Union as legal entity consists of 28 Member States with not only common aims but also distinct sovereign, legal authority, where agreement requires compromises and exemptions.

The quest for systematisation and renewal of food information law has gained momentum due to the conclusion upon generic principles (Articles 3–7 of the FIC) and specific horizontal rules. The stated principles of food information law (Articles 3–8) are subdivided in general ‘objectives’ (Article 3) and principles governing mandatory food information (Article 4). The principles are complementary and in cases similar to the ones the General Food Law (GFL)Footnote 31 adheres to (i.e., a supply chain orientation (Article 4), risk analysis (‘science-based food law’; Article 6), protection of human health (Article 5), free movement of goods (Article 6), precautionary action (Article 7) and protection of consumers’ interests.Footnote 32 The latter requirement is laid down in Article 8 GFL: Food law shall aim at the protection of the interests of consumers and shall provide a basis for consumers to make informed choices in relation to the foods they consume. It shall aim at the prevention of (a) fraudulent or deceptive practices, (b) the adulteration of food, and (c) any other practices which may mislead the consumer.

Notably, the principles in the GFL reflect the purposes of food safety law, not principles of food safety as such, although material principles governing food safety can be derived from them. The principle stated in Article 8 reflects among others in Article 7 (1) of the FIC which requires that food information may not be misleading, and in Article 7 (2) which mandates that the information shall be accurate, clear and easy to understand for the consumer. Notably, putting forward the protection against misleading practices, the concept ‘misleading’ is delineated in Article 8 GFL using terms that are not specifically defined at the spot, nor in in food information law: ‘fraudulent’, ‘deceptive’, ‘adulteration’, ‘other’.Footnote 33 This makes enforcement difficult and diverse, as national standards may be developed for specific cases.

2.1 General Principles in the Food Information Regulation

General principles (stated as ‘objectives’ in the FIC) are the pursuance of a high level of consumers’ health and interests by enabling them (1) to make informed choices including health, economic, environmental, social and ethical considerations, (2) ensuring the free movement of foodstuffs taking into account the legitimate interests of producers and promote the production of quality foods, (3) transitional periods to implementation of rules and regulations and (4) open and transparent public consultation. The last two principles entail formal procedural requirements in the act of designing (new) food information law. The first of the objectives signifies a broadening of consumer concerns, beyond food safety and technical food quality, with the inclusion of social and ethical dimensions. The second one confirms that producers have legitimate rights,Footnote 34 next to consumers. This is remarkable, since at the turn of centuries food law was (re)designed to better be able to protect the consumer against foodborne diseases, thereby limiting producers’ rights.Footnote 35 The third principle assures temporization of implementation of the new requirements of the FIC. Food businesses are given time to change the mandatory information, due to the necessary redesign and the costsFootnote 36 involved. This principle has only merits to food businesses, if the rules that have to be implemented are stable over a considerable period of time. However, the Commission has been empowered to constitute implementing legislative acts in many instances,Footnote 37 the execution of which will potentially affect the content of food information law in the future.Footnote 38 Finally, transparency is a principle that has become prominent in EU policy since the midst of the 1990s.Footnote 39 It serves to regain and maintain trust of the European institutional environment by fostering consultations with actors on food law and policy issues as a basis for legal revisions.Footnote 40

Remarkable from the previous elaboration is the inclusion of additional ‘soft attributes’ (i.e., social and ethical values) and the recognition of rights of food businesses. These will be addressed subsequently.

2.1.1 Soft Attributes

In EU food information law, mandatory requirements mainly serve to protect consumer’s safety and health, while ‘soft’ attributes of food supply (like “fair farmer income” or “sustainable production”) have to a large extent been left to voluntary (not-publicly-regulated)Footnote 41 regulation, or regulated to a minimum level (like is the case with organic production). At present, mandatory food information requirements are mainly bound to the immediate characteristics of the final product, so that transparency of process steps upward the supply chain is low. However, a shift towards a process orientation is apparent that reveals soft attributes, among others through the mandatory indication of hidden processing steps a food has undergone and extended information on the origin of a food and/or its constituents. Indications about processing steps in upper stages of the supply chain are for instance disclosed through mandatory additions to the name or an ingredient of a foodstuff. In the EU, the name of a food is accompanied by the treatment it has undergone, like ‘smoked’, ‘dried’ or ‘irradiated’, ‘defrosted’; or also the applied technology, like ‘nano’ for ‘engineered nanomaterials’.Footnote 42 Information on the origin of foodstuffs allows consumers to draw inferences with respect to the social, ethical and/or environmental conditions under which the product has been made. With the acceptance of the FIC, origin labelling has been substantially expanded,Footnote 43 beyond established rules for certain agricultural and fishery products and fresh unprocessed beef,Footnote 44 and indications on a voluntary basis.Footnote 45

2.1.2 Producers’ Rights

Despite the assurance of producers’ ‘legitimate rights’, its content is neither delineated in the FIC, nor anywhere else in European food law. Indirectly, producers’ commercial interests are fostered by the maintenance of a ‘level playing field’ via antitrust and competition law (i.e., the abolishment of ‘unfair’ competition or agreements, concerted practices and power accumulations that endanger the smooth operation of the markets).Footnote 46 After the BSE-crisis, the consumer has been put central in food safety law, resulting in obligations of producers. The FIC puts the burden of providing fair food information on the shoulders of the food business (Article 8 of the FIC).Footnote 47 The do’s and don’ts that substantiate it go to a large extend to the expense of the businesses freedom of expression in commercial messages. Limits to freedom of speech follow for instance from the Claims Regulation (Regulation 1924/2006), as only authorized claims may be made, under pre-specified conditions. The European food legislator is less prepared to refrain from don’ts compared to its US counterpart, which is more lenient if infringements on the constitutional rights of its people (including businesses) are manifest.Footnote 48 Another example of restriction can be found as to the mandatory information on engineered nanomaterials as ingredients. It is nearly impossible to define engineered nanomaterials and its technology in an all-inclusive way, so that refuge has to be taken by proclaiming it a ‘dynamic’ concept, the scope of which can change in course of time.Footnote 49 The EU-regulator seems to be barely aware of the signalling effect of references to new technologies of which the ‘average’Footnote 50 or more than average consumer neither grasps the content, nor can assess the negative consequences of consumption and thus the intrusion on producers’ rights. Disproportionate effects may occur to businesses that market certain foods, comparable to the induced negative-image effects of the regulation of GMO-foods.

On the basis of the general principles, the FIC formulates content standards for food information,Footnote 51 especially legibility and fairness.Footnote 52 Based on the general requirement of legibility, a minimum font size ranging (depending on the size of the package) from 0.9 to 1.2 mm is mandatory. Fairness is fostered by putting forward three mandatory content categories (Article 4): (1) on the identity, composition, properties and/or other characteristics of a food, (2) information to protect the consumer’s health (like on allergies and durability) and (3) nutrition information. New in European food information law is mandatory—instead of voluntary—nutrition information. The information on foods had to be adjusted/included end 2016 at the latest. As a consequence of this requirement, virtually all packages had to be redesigned to create space for mandatory information.Footnote 53 While balancing the fundamental rights of consumers and producers, the fact that nutrition-related diseases contribute significantly to social costs in the form of health-related diseases has induced this requirement,Footnote 54 but also has limited the free marketing space of businesses.

2.2 Formal Principles of (Food Information) Law

Next to the material principles and requirements of food information to consumers, formal ‘crafting’-principles of (information) law can be discerned, addressing its projected structure. Formal principles with respect to the order in structuring the process of regulation of food information have not been included in formal legal texts, but can be derived from the general principles as laid down in the Treaties, notably the principle of legal certainty (‘rule of law’), and, bottom-up, from the requirements thereon (like transparency and legibility). Food information law should not only be science-based in a technical sense (Article 6(2) of the GFL), but also from a logic-systematic viewpoint. Therefore the following formal principles regarding the envisaged legal structure may be discernedFootnote 55:

  • coherence: this reduces search costs and uncertainties about the appropriateness of a certain rule.

  • completeness: the legal framework should address all items that are considered relevant.

  • clarity: the legal requirements should not only contribute to comprehension by the users of information, but also enable the providers of information on how to structure food information.

The level to which these ‘crafting’ principles are adhered to, is subject of the next subsections.

2.2.1 Coherence

The FIC mainly focuses on pre-packaged foodsFootnote 56 that are directly or indirectly (via a mass caterer) sold to the final consumer. Some topics have been fully harmonized, other pieces of legislation have remained completely untouched. They co-exist in their original form without substantial harmonization of concepts, content and envisaged controls. For instance, relevant food information areas like gmo-foods,Footnote 57 claims,Footnote 58 supplements,Footnote 59 natural mineral waters,Footnote 60 and special foodsFootnote 61 (former ‘parnuts’) and (vertical) common marketing requirements remained to a large extend next to the FIC in their original format. References in old legislation to new are often not updated,Footnote 62 nor are definitions and concepts adjusted systematically. In many cases, concepts keep their original content in the specific piece of law in which they are used.Footnote 63 This makes the system of food information law confusing (compared for instance with more integrated representation of ‘labelling’ in the US CFRFootnote 64). The patchwork-like structure of food information law induces legal uncertainty, transaction costs on the side of businesses and consumers as well (i.e., search costs), and regulatory burdens for authorities and food business operators. This may lead to ‘regulatory stress’: irritation and confusion about the normative system, inducing an attitude of self-protection.Footnote 65

2.2.2 Completeness

It already was indicated that food information law leaves gaps, to the advantage of opportunistic businesses. Meticulous prescriptions may provide the consumer with a sense of protection and the regulator with a sense of achievement. Unintentionally, they inform businesses on the remaining loopholes to “play games with the rules”,Footnote 66 enabling the compliance to regulation in an opportunistic way. We call this ‘fraud-by-effect’: despite obeying the formal rules, the purpose of law is violated. It appears not to prevent ‘creative compliance’,Footnote 67 the “structuring of transactions round the rules”.Footnote 68

2.2.3 Clarity

Although a major quality step has been taken by integrating European food information law, the present system remains unclear to especially small businesses.Footnote 69 Opportunistic business operators could hide behind an image of ignorance and in this way escape from being accused of fraudulent practices. Simulating mistake and hiding purpose can in practice be awarded with warnings and fines instead of being subjected to criminal charges.

3 Manifestations of ‘Fraud’

Fraud as to food information is an ill-defined concept. Under the concept we range deliberate practices in purposeful violation of mandatory information requirements (‘fraud-by-object’) and practices which comply to formal requirements but nevertheless hinder consumers from making informed choices (‘fraud-by-effect’). In the next subsections we illustrate the occurrence of both types of fraud and then ask ourselves, whether an extension of principles or rules can fight one or both manifestations.

3.1 ‘Fraud-by-Object’

We exemplify fraud-by-object by reference to the horse-meat crisis. Early 2013, in lasagne and other products than normally only contain beef, horsemeat and also pork was detected, without properly informing the consumers about the switch. This meat fraud crisis affected several countries of the EU (next to the UK and Ireland, notably also in the Netherlands, Germany, France and Romania). In view of the immense amount of requirements regarding the provision of safe food to the market, how can it be explained that on a large scale the labelling of horsemeat as beef stayed undetected for a long time?

From a ‘principles’—perspective, the answer to the question may be found in three sources. First, the general principle laid down in Article 8 GFL (that food law shall aim at (among others) the prevention of fraudulent practices) is not specific enough (like most principles) and lacks a content-base as to what constitutes a ‘fraudulent practice’. In the aftermath of the crisis the EP has discussed the need of a definition for ‘food fraud’.Footnote 70 To support enforcement, a rule-based approach, based on common concepts and rules, was adopted. In the UK, the Food Standards Agency (FSA) has defined food fraud as “the deliberate placement on the market, for financial gain, with the intention of deceiving the consumer”, subdividing it in the sales of foods that are dangerous or unfit for consumption and deliberate false description of a food.Footnote 71 The element ‘deliberate’ complicates the contestation of such practices, as the burden of proof with respect to the “malicious will” behind the act is put on the shoulders of the competent national authorities. The element ‘dangerous or unfit for human consumption’ clearly refers to the GFL (Article 14), so in essence is superfluous for enforcement purposes.

The US Food & Drug Administration has ranked “economically motivated adulteration” under the concept of food fraud.Footnote 72 The subjective motivational element complicates prosecution just as in the UK. In other jurisdictions, it depends on the boundaries of the concept ‘food fraud’ how, on a national level, rules will be enforced: along the route of food safety, as food information issue, and/or as a criminal law offence. The delimitation as ‘intentional, economically motivated adulteration’ points in the direction of the latter, though trespasses from one route to another are possible (see Fig. 1).

Fig. 1
figure 1

Three enforcement routes for fighting food fraud

Full size image

A second answer to the posed question might be vested in the simplistic attitude towards businesses, based on trust (supposing negligence instead of intent in case of incidents), for instance as to the exchange of information in the supply chain. The requirement of traceability of a food or its ingredients is mandatory in Article 18 of the GFL. It requires information exchange one step upward and one step downward the supply chain.Footnote 73 This bilateral orientation is also implemented in food information law.Footnote 74 This orientation disregards the complexity in nowadays’ ingredient procurement and processing. This complexity has at least three causes: the development from short to long supply routes, differentiated instead of uniform procurement (former short and vertically oriented supply chains have developed towards net-chainsFootnote 75) and global instead of local sourcing. The original manufacturer of a food or ingredient gets easily out of sight, especially if actors have the intention of cheating. For instance, during the horsemeat crisis incorrect information was processed from one actor to the other, as was also the case during the EHEC—and dioxin—crises and numerous other food safety incidents.Footnote 76

A third answer could be found in the violation of the formal principles of legal crafting (see Sect. 2). The patchwork-like structure of food information law induces thinking in simple dichotomies: food or medicine,Footnote 77 claim or not-a-claim,Footnote 78 safe or not-safe,Footnote 79 while some foods take a position somewhere along the scales. Envisaging short chains instead of complex ones and single business responsibilities instead of shared responsibilitiesFootnote 80 induces a feeling of certainty for the regulator but also lack of clarity for businesses as to compliance to food information regulation. Incidents also reveal a lack of robustness as to coherence and completeness.Footnote 81 As already indicated, at the EU food (information) law level, regulatory gaps are constantly filled with additional requirements (see Sect. 1), thus adding to the uncertainties of actors with regard to their information obligations. In the short run, formal compliance to incomplete or unclear standards can be exploited opportunistically. Can the endless process of constant additions and modifications be brought back to proportions by implementing an additional principle: substance over form? This is a question to be answered after addressing ‘fraud-by-effect’.

3.2 ‘Fraud-by Effect’

An abundant amount of examples are available of information provision that complies with formal rules, but in effect puts the consumer on the wrong foot: claims made with respect to added vitamin E, where the vitamin has no function in the food; pictures of a fruit on a package, where the fruit content is barely absent; depicting a food as containing ‘natural’ ingredients (signalling the healthiness of the product); hidden references to medicinal properties of probiotics, etc. Also, it is still is possible to bring a food to the market with added water, without technical necessity.Footnote 82 It for instance is also possible to sell the sweetener stevia as a mix with 90% of a much less valuable ingredient (malt dextrin), if the formal labelling rules are not violated. The consumer may be set on the wrong foot by signalling high value with a high price to a package of sweetener, or be under the impression that a container of high-value stevia is acquired.Footnote 83 Although there is no formal trespassing of enforceable norms, in effect in all these cases the less alerted consumer is making choices he would regret if facilitated better with information. A turnaround is emerging. In the Teekanne case (C-195/14) it was decided that a formally correct ingredient list cannot exempt food businesses from misleading the consumer, contrary to the legal doctrine till then.Footnote 84

4 Substance Over Form

The problems with the ‘filling-the-gaps’-strategy to improve food safety are multiple:

  • it increases the pressure on enforcement authorities, and induces additional burdens for businesses.Footnote 85 Already the Commission has given advices on the instalment of tighter controls at the MS-level.Footnote 86

  • it induces short term and long-term uncertainties for businesses and thus negatively affects innovation and competitivenessFootnote 87;

  • formal compliance to official rules may materially put consumers on the wrong foot.Footnote 88

To find a better way of regulating food information supply, we draw on developments in another sector with regular crises and fraudulent practices: the financial sector. This sector went through a severe crisis in the period 2008–2014. In April 2007, the Financial Services Authority (abbreviated as FSA2) in the UK publishedFootnote 89 a new enforcement policy, a ‘principles-based approach’, as a supplement to the risk-basedFootnote 90 and evidence-basedFootnote 91 approaches it applied already, to regulate and control the financial institutions and markets. As stated by the FSA, their principles-based approach focuses more on outcome than on meticulous prescriptions for businesses on how to achieve a certain outcome. At the same time, it gives businesses the freedom and flexibility that is needed for improving their governance structures (i.e., with respect to information provision to actors on financial markets). It is based on confidence in the self-regulating capabilities of the financial services sector, rather than distrust. The financial crisis and the fraudulent practices of financial businesses that came to the surface, showed the weaknesses in the present regulation policy, but also showed (as among others Black (2002, 2007) exemplifies) the opportunities of a more principles-based approach, that is, a further substantiation of the principles underlying the system of (enforcement) rules. This was notably the case in the USA, from where the financial crisis originated. The new approach was embraced as a response to the wave of accounting scandals, of which the Enron business failureFootnote 92 is one of the most prominent. By following the rules of the US Generally Accepted Accounting Principles (GAAPs), literally and to the letter, instead of focusing on “substance”,Footnote 93 financial businesses could uphold fraudulent and misleading practices, to the expense of stakeholders (notably ultimately the tax payers). The shift towards a principles-based approach can also be discerned in accounting standards that were established in the EU for multinational companies (i.e., the International Financial reporting System, IFRS). This accounting approach is different from the requirements in the fourthFootnote 94 and seventhFootnote 95 European Directives, which formed the substantive core for financial disclosure for a long time. Two streams of financial reporting regulation have been developed on the basis of these Directives. One has solid roots in common law and relies on the provision of a ‘true and fair view’, rather than the rule of the black letter. In its ultimate consequence, if following the formal rules does not provide a sound insight in the financial position and performance of a business, it is mandatory to adjust the information.Footnote 96 The other root, also subsumed under the mentioned Directives, has partially been adopted by GermanyFootnote 97 and notably by France,Footnote 98 where fiscal and financial reporting are traditionally connected. In many states, fiscal requirements are prepared to thwart fraud and reimburse taxes to the full. In doing so, there is little space for adjusting information to the needs of private actors.Footnote 99

In the EU, the financial crisis substantiated that a significant number of financial institutions were out of control. Several banks (like ABN-AMRO, Fortis, Bank of Scotland, and other) had to be supported with public money, went bankrupt, or came in public hands. It led to the strengthening of standards as well as stricter controls to ensure financial sustainability. Steering on outcome (in the form of content-based indicators) was complemented with intensified monitoring by public authorities. Unless a public takeover took place, the responsibility for good governance was left in the hands of the private sector, but with strict targets and control mechanisms as safety assurance. The developments in the financial sector are not completely comparable to the food safety industry, but there are some parallel moves.

The parallel development of financial and food safety regulation is visible in several MSs, especially at the enforcement level. In the Netherlands, food safety authorities and other public institutions felt the cuts in their financial means because of the financial crisis. It has instigated them to cut back on product inspections by applying a principles- and risk-based approach. This, next to a tendency towards deregulation, has induced reliance on the self-steering capabilities of businesses. In practice this means that if the processes are in control (via public or private systems) there is no need to intervene or check on content (like with laboratory tests for assessing the safety of products). However, fraud and other incidents have seriously affected the base of trust for relying on the self-steering capabilities of food businesses. The developments in the Netherlands show that with respect to the implementation of rules a cost-effective steering on principles-based outcomes is envisaged, while at the same time the core of substantive law is gradually expanded: not only or primarily by the national regulator(s), but notably by the EU. This is the result of the awkward position in which regulators are. Incidents bring authorities in an awkward position: on the one side they are pressed towards stricter controls and on the other side they are forced to stay within the limits of their budgets. This creates opportunities for businesses to simulate an image of compliance, while at the same time the purpose of law is violated.

The implementation of a principle ‘substance-over–form’ could provide an outcome under specific circumstances. For food information provided by businesses this would implicate that if the consumer is misled despite following the formal information rules, the information should be adjusted. This has as advantage for the substantive core of food information law:

  • that the aim is envisaged, not the formal requirement;

  • that the perception of the consumer is a landmark for compliance-assurance;

  • that the continuous flow of additional food information requirements is canalized and eventually reversed.

By embracing the ‘substance-over-form’-principle, the complexity of the business environment is recognized. Moreover, by recognising the ‘substance-over-form’-principle improved coherence (by simplifying the rule-system), completeness (by removing opportunities for opportunism) and clarity (by envisaging purpose rather than obeying formalities) can be reached. The adherence to the principle might provide an effective standard in case of ‘fraud-by-object’ and ‘fraud-by-effect’. In both cases, legal gaps are closed. ‘Fraud-by-object’ is obstructed by installing an additional rule, while ‘fraud-by-effect’ provides enforcement authorities a legal escape where legal gaps remain.

5 Final Remarks

In our view, a principles-based approach goes beyond a mere outcome-based enforcement policy. A principles-based approach embraces a conclusive set of principles and so covers the crafting of law as well as compliance assurance. As to food information, the enforcement-based principles-based approach should be supported by a general principle ‘substance over form’, as a fundamental and complementary norm to the present rule-based requirements, as regulators “cannot foresee all situations”.Footnote 100 Coming back to the ‘informed choice’ consumers are to be enabled to make, the substance-over-form principle requires an image of a consumer that is individualistic instead of average. It also requires a turn in the mentality of EU legislative authorities, as the scattered rule-based food information law will continue to show loopholes or induce quasi-compliance.

The application of the substance-over-form principle in practice requires a difference in business information governance. No longer is the average consumer landmark for assessing whether information is appropriate, but the specific perceptions of the targeted consumer.Footnote 101 Insights from social sciences can be used to assess the effects of information on consumers’ choice behaviour, compared to the -at present- technological-sciences-orientation of food (information) law. It induces a responsibility to take account of the behavioural effects of food information.Footnote 102 Substance over form is not only meant to be leading for the responsibilities of businesses, but should also be a guiding for better regulation. When new law is crafted, not only the social, economic and environmental effects should be assessed, but also the behavioural effects, as is envisaged in (more) responsive regulation. A dense and detailed system of rules does not necessarily induce better regulation of food supply. In this sense, the substance-over-form principle can replace obsolete and/or ineffective regulation and ultimately improve the supply of safe food as well as empower consumers to make really informed choices.