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EU Court of Justice: Parallel importer may not remove PPP batch number
On 7 December 2023, the EU Court of Justice (‘CJEU’) handed down its ruling in case C-830/21 between Syngenta Agro GmbH (‘Syngenta Agro’) and Agro Trade Handelsgesellschaft mbH (‘Agro Trade’) with important implications for the labelling of plant protection products (‘PPPs’) within the EU, particularly in the context of parallel imports. This blog post mainly focuses on the CJEU’s findings regarding the responsibility of parallel importers for ensuring the display of the original batch number on the product packaging.
Factual background and national litigation
Syngenta Agro is a distribution entity within the Syngenta group, a PPP manufacturer with an EU-wide presence. Agro Trade is an agricultural trading company involved in the distribution of PPPs. These products, including those of Syngenta Agro, were mainly parallel imported and then distributed by Agro Trade in Germany. Consistent with the internal market’s rationale, a PPP authorised for sale in one Member State (i.e. the Member State of origin) may be imported and sold in another Member State (i.e. the Member State of introduction). However, this is only so if the Member State of introduction determines that the PPP is identical in composition to a PPP already authorised in its own territory (i.e. the reference product).
A key aspect of Agro Trade’s operations was the replacement of the original labels on Syngenta Agro’s unopened canisters with its own labels. These new labels included information about Agro Trade as the importer and distributor, but left out the information about Syngenta Agro as the authorisation holder in the Member State of origin. Additionally, the original batch numbers assigned by Syngenta Agro were substituted with Agro Trade’s own identification numbers. However, Agro Trade apparently maintained records correlating its identification numbers with the original batch numbers, as required by the German Law on the protection of cultivated plants.
Syngenta Agro initiated legal proceedings before the Hamburg Regional Court, seeking to prohibit Agro Trade from commercially distributing its parallel imported PPPs in Germany. The claim asserted that Agro Trade’s relabelling contravened Article 1 of Regulation No 547/2011 (‘PPP Labelling Regulation’), specifically regarding paragraphs 1(b) and (f) of its Annex I. These provisions stipulate that information about the authorisation holder and the batch number must be included clearly and indelibly on PPP packaging. The Hamburg Regional Court ruled in favour of Syngenta Agro concerning paragraph 1(b) of Annex I, relating to the information on the authorisation holder. However, the claim based on paragraph 1(f), related to the batch number, was dismissed.
Both parties appealed the decision to the Hamburg Higher Regional Court, which, in turn, referred the case to the CJEU for a preliminary ruling. The referring court expressed uncertainty about the interpretation of paragraphs 1(b) and (f) of Annex I of the PPP Labelling Regulation, emphasising the absence of specific rules governing the labelling of parallel imported PPPs. The CJEU was asked the following questions. First, whether, in the case of parallel import, it is permissible for the parallel importer to replace the original batch number on the PPP with its own identification number, provided that records are kept to demonstrate the correlation between them. Second, whether, in the case of parallel import, it is mandatory to state the name and address of the authorisation holder in the Member State of origin on the packaging when the PPP is distributed in another Member State.
Traceability matters: CJEU rejects replacement of batch numbers
In its assessment, the CJEU first acknowledged the absence of a specific definition for the term ‘batch number’. To determine the meaning of ‘batch number’, the CJEU applied established legal principles, considering the term’s meaning in everyday language, its contextual usage, and the objectives of the applicable legal framework.
According to the CJEU, ‘batch number’ in everyday language refers to a series of identification numbers or letters allocated to products with similar characteristics, manufactured during the same production operation. It then observed that paragraph 1(f) of Annex I of the PPP Labelling Regulation specifically referred to the ‘formulation batch number,’ establishing an inseparable link between the ‘batch number’ and the ‘formulation’ (which can only be manufactured by the producer). The CJEU also drew attention to the consistency of its interpretation with other regulations, citing Implementing Regulation (EU) 2021/1280 on good distribution practices for active substances used as starting materials in veterinary medicinal products, which essentially defines a ‘batch’ as a defined quantity processed in a single operation, and a ‘batch number’ as a distinctive combination of numbers or letters uniquely identifying a batch.
Based on these considerations, the CJEU concluded that, within the context of paragraph 1(f) of Annex I to the PPP Labelling Regulation, the ‘batch number’ should be understood as the batch number initially allocated to a plant protection product by its manufacturer. It stressed the importance of this number for a PPP’s traceability. In case of anomalies, the initial batch number is the sole relevant reference enabling the authorities to swiftly withdraw a product from the market in urgent situations. According to the CJEU, allowing a parallel importer to replace the initial batch number with a new identification number could impede this traceability. Consequently, the CJEU concurred with Advocate General Medina that national legislation, such as the German Law on the protection of cultivated plants, permitting a parallel importer to replace the initial batch number with its own identification number is contrary to the PPP Regulation’s objectives. This holds true even if the legislation obliges the parallel importer to maintain records demonstrating the correlation between initial batch numbers and personal identification numbers.
Substitution of certain information on labels is allowed
Concerning replacing the authorisation holder’s information on the product packaging, the CJEU noted the absence of explicit rules regarding the labelling of parallel traded PPPs. Although Article 52(7) of Regulation No 1107/2009 (‘PPP Regulation’) loosely dictates that existing labelling provisions are to apply “correspondingly” to such products, the specific intricacies remained unclear.
Emphasizing the distinction between authorisation and parallel trade permit holders, the CJEU reiterated the personal and exclusive nature of parallel trade permits, which confer the sole right to introduce the PPP in the Member State that granted the permit. The CJEU concluded from this that the requirement in paragraph 1(b) of Annex I to the PPP Labelling Regulation should be understood, in the context of parallel trade, as referring to the name and address of the parallel trade permit holder. Thus, the parallel importer is, on the one hand, obliged to display its name and address on the label of the parallel imported PPP, and, on the other hand, entitled to leave out the details of the authorisation holder in the Member State of origin.
Conclusion
This case provides clarity for companies involved in the manufacturing, distribution, and parallel importation of PPPs within the EU. Parallel importers must ensure that their labelling practices are in line with the CJEU’s interpretation. While they are entitled to replace the authorisation holder’s information on the packaging with their own, they should nevertheless retain the manufacturer’s original batch number. This necessarily implies that authorisation holders should continue to provide clear and indelible batch numbers to facilitate product traceability. If you would like any further information, please contact Philippe de Jong or Bart Junior Bollen.