Consorzio Del Prosciutto Di Parma v. Asda Stores Limited and Others

The House of Lords considered whether Council Regulation (EEC) No 2081/92 and Commission Regulation (EC) No 1107/96, read with the specification for the Protected Designation of Origin (PDO) "Prosciutto di Parma", create a directly enforceable Community right to restrain the retail sale as "Parma ham" of sliced and packaged ham that had been exported lawfully from Parma but thereafter sliced, packaged or labelled outside the Parma area in a manner not complying with the specification.

The Lords concluded that (i) a regulation is ordinarily directly applicable and, on its language and purpose, Regulation 2081/92 was intended to create enforceable Community rights; (ii) the PDO specification, in particular the labelling rules (article 4.2(h)) and the Parma specification's Part H, form part of the description of the protected product and thus may define conditions which must be met for the PDO to be used; (iii) requirements about slicing, packaging and labelling can be intrinsic to the protection because they are the practical means of guaranteeing authenticity to consumers; and (iv) issues of certainty, transparency and the legal competence to register specifications that restrict post-export packaging or slicing raise questions of Community law that are not acte claire and therefore should be referred to the European Court of Justice for a preliminary ruling.

The appellants, the Consorzio del Prosciutto di Parma (the Association), are the body responsible under Italian law for supervising authentic Parma ham and protecting the "ducal coronet" brand. Hygrade Foods Ltd imported authentic boned Parma hams from Parma; the hams bore the corona ducale. Hygrade sliced and packaged the hams in Wiltshire and supplied the pre-packaged slices to Asda stores for retail sale. The packages declared the contents to be Parma ham but did not bear the corona ducale. The Association sought an injunction restraining Hygrade and Asda from marketing those packages as Parma ham on the basis that the PDO and its specification required slicing, packaging and labelling under supervision within the Parma area.

The procedural history was as follows: at first instance Mr Lawrence Collins QC (sitting as deputy High Court judge) held that the Association had no enforceable rights under Community law; the Court of Appeal affirmed that decision. The Association appealed to the House of Lords.

The House of Lords identified three principal issues:

• Whether the Parma product specification (and in particular requirements about slicing, packaging and labelling) barred the marketing of Parma ham sliced and packaged outside Parma;
• Whether Council Regulation 2081/92 (read with Commission Regulation 1107/96) conferred directly enforceable rights in domestic courts to enforce such a prohibition;
• Whether the specification and registration process were sufficiently transparent and accessible to be validly relied on against traders in other member states.

The Lords reasoned that the Regulation, by its terms and purpose, was normally directly applicable and intended to provide Community-wide protection for PDOs; article 4.1 (specification) and article 8 (use only on products complying with the Regulation) were central. The Parma specification expressly required the corona ducale on packages and tied slicing and packaging within the Parma area for supervised packaging. The Lords accepted that labelling and packaging provisions can be integral to a PDO because they are the means of guaranteeing authenticity to consumers. The House, however, considered that the core questions—whether the specification and Regulations validly and directly preclude the post-export slicing or repackaging of a PDO product and whether the legislative technique met requirements of transparency and legal certainty—turn upon Community law construction and possible validity challenges and were not acte claire. Accordingly the House referred an appropriately framed question to the European Court of Justice for a preliminary ruling.

Nature of relief sought: injunctions restraining sale of Parma ham not sliced, packaged and labelled under supervision in Parma. Issues framed: scope of the PDO/specification (labelling/packaging/slicing), direct effect of Regulations, transparency and validity. Reasoning: Regulation intended direct effect; specification can include labelling/packaging requirements; proportionality and exhaustion principles relevant; uncertainty/transparency and competence issues require ECJ determination.

The House did not finally allow or dismiss the appeal on the substantive merits. The Lords concluded that the legal questions about whether Council Regulation (EEC) No 2081/92, Commission Regulation (EC) No 1107/96 and the Parma PDO specification create a valid, directly enforceable Community right to prevent retail sale of Parma ham sliced or packaged outside Parma are questions of Community law that are not acte claire; the appropriate course is to refer those questions to the European Court of Justice for a preliminary ruling. The House therefore made a reference rather than disposing finally of the substantive claim.

First instance: Deputy High Court judge (Mr Lawrence Collins QC) dismissed the Association's claim. Court of Appeal: decision of the deputy judge affirmed (no neutral citation given in the judgment). House of Lords: appeal heard and questions referred to the European Court of Justice for a preliminary ruling. ([2001] UKHL 7)