Peru´s Octagon Warning Labels: A Trade Barrier

By Espinosa Bellido Abogados

Octagonal warning labels were introduced in Peru in 2018 as part of the Law on the Promotion of a Healthy Diet. The labels, octagonals in shape and with a bright red border, are required on foods that are high in saturated fat, sugar, or sodium. They also include the name of the nutrient that is high in the product, as well as the amount of that nutrient per serving.

The labels have made it more difficult for some food companies to export their products to Peru. This is because the labels can make products look less appealing to consumers, and they can also make it more difficult for companies to comply with the labeling requirements.

As of March 31, 2022, the octagonal warning labels in Peru are required to be printed directly on the packaging of food and beverage products that exceed the limits set in the regulation. This means that stickers are no longer allowed to be used to comply with the labeling requirements.

The change was made in response to concerns that stickers could be easily removed or tampered with, which could undermine the effectiveness of the labeling scheme. The government has also argued that printing the labels directly on the packaging is more cost-effective and environmentally friendly.

The new labeling requirement was met with criticism from the food industry. Although some companies welcomed the change -arguing that it made it easier for them to comply with the labeling requirements- most companies have expressed concerns that the change increased their costs and make it more difficult for them to export their products to Peru.

The labeling requirement has been challenged on a number of grounds, including intellectual property and trade law. One of the main arguments against the labeling requirement is that it violates intellectual property rights. The stickers that are used to comply with the labeling requirement often contain trademarks or other intellectual property owned by the food companies. The companies argue that the government is infringing on their intellectual property rights.

Another argument against the labeling requirement is that it violates trade law. The World Trade Organization (WTO) has rules that govern the use of non-tariff trade barrier (NTBs). These rules state that NTBs must be justified by legitimate public policy goals, and that they must not be discriminatory. The companies argue that the labeling requirement is not justified by legitimate public policy goals, and that it is discriminatory because it only applies to imported foods.

While there are cases currently being reviewed by the WTO's Dispute Settlement Body, there have also been claims filed in Peru. In 2022, a bill was introduced in the Peruvian Congress that would repeal the labeling requirement. The bill has not yet been passed.

The labeling requirement has also been challenged in Peruvian courts, specifically with Indecopi, the Peruvian competition authority, challenging the prohibition of using stickers for octagonal warning labels. Some of the cases were brought by the Association of Importers and Distributors of Foodstuffs (AIMPE) and by the Association of Food Industries (AIAL).

In a preliminary ruling in 2022, Indecopi stated that it is "preliminarily minded" to find that the prohibition is an NTB that violates Peru's obligations under the WTO. In a final ruling in July 2023, Indecopi declared that forbidding the use of octagons on food products through stickers constitutes a non-tariff trade barrier. Consequently, imported food items will not be obliged to display the octagon directly printed on their packaging.