The Swedish Food Agency’s fees deemed in violation of EU law – Setterwalls has successfully represented several meat producers in the Administrative Court of Appeal

Setterwalls has successfully represented several meat producers against the Swedish Food Agency regarding the Agency’s fees for official controls. In the Administrative Court of Appeal’s judgment of 23 October 2020, the court concluded that the Food Agency’s fees were in breach of EU law, and annulled the Food Agency’s decision on the fees for official control for 2017. The judgement is expected to have a momentous impact on the industry going forward.

According to mandatory EU-law, the Food Agency shall impose fees to recover the costs they incur in relation to official controls. It follows from the same regulatory framework that the fees shall be determined on the basis of certain specified costs, insofar as these result from the official controls concerned.

In recent years, the fees imposed by the Food Agency in Sweden, and thus the costs for individual meat producers, have increased significantly. Sweden currently has among the highest fees for official controls in the EU. Industry representatives have several times emphasized that the competitiveness of Swedish companies is being undermined by the unfairly high costs imposed on Swedish meat producers, to both the Food Agency and the government.

As a consequence, the trade associations Svenska Köttföretagen and Svensk Fågel chose, through eighteen of its members, to appeal against the National Food Administration’s fees for official controls in order to try whether the Food Agency’s collection of fees is in accordance with the applicable regulations within the EU. The case included considerations relating to the application of the complex and comprehensive regulatory framework governing the public control of food products, as well as intricate legal issues relating to inter alia the effectiveness of EU regulations and the financing of governmental authorities.

The Administrative Court of Appeal has now, through its judgments, established that the Food Agency’s fees for 2017 included a number of costs which, under the aforementioned EU law, may not to be financed by the fees for official controls. As a consequence, the fees for official controls that were to be paid by the meat producers were exaggerated.

The fees imposed by the Food Agency’s for the years 2018 and 2019 have also been appealed by the meat producers. A stay of proceedings have been issued for these cases, pending the outcome of the cases in the Administrative Court of Appeal. The fees for 2020 have been appealed as well. Even though the fees for 2020 are based on a new EU regulation, which entered into force at the end of last year, it can be expected that the ruling of the Administrative Court of Appeal will be of great importance, since the applicable rules have not been substantially changed compared with the previous regulatory framework.

The judgement is expected to have a momentous impact on the industry. In addition to the fact that the Food Agency’s system for collection of fees for official controls were considered in breach of the applicable regulations, the ruling enables stakeholders to engage in a constructive dialogue with the Food Agency and the government in connection with the introduction of a new system for collection of fees for official controls, that is to be implemented following the new regulatory framework which entered into force at the end of 2019.