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Saturday 21.10.2017 | Name days: Severīns, Urzula

Economist: EC could interpret energy drink trade restrictions as illegal

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Uldis Osis

In accordance with the Treaty on the Functioning of the European Union, free circulation of goods is one of the founding principles of democratic and legal state management. Unjustified limitation of any product within Latvia, a member of the European Union, is not acceptable, Economist Uldis Osis notes.

“I believe the issue of much debated energy drink trade limitation for minors is, in fact, motivated with the best of intentions – care for the children’s health. However, attempts to realize this initiative using administrative restrictions, as it is provided by the Energy Drink Circulation Law currently reviewed by the parliament, is one of the least effective ones. Also, it can be safely assumed that the European Commission will surely see this as an illegal act that threatens the free circulation of a product within the single market of the EU,” – member of the Economists Union 2010 says.

Creators of the bill mention the 2009 assessment of the European Food Safety Authority about two most common components of energy drinks – taurine and glucuronolactone. The conclusion of the institution’s specialists was – these substances have no negative effect on the human health.

“If we believe the assessment was inconclusive – whether or not the effect of caffeine or some other component was not measured – we need to carry out no less detailed and methodical research actions in order to test these substances. So long as there are no results that would prove the negative effect of any containing substances on the human health, the initiative to create a legal base that will restrict the selling of energy drinks to individuals under the age of 18 can be interpreted based on Section 36 of the Treaty on the Functioning of the European Union as an attempt of state officials to turn against free product circulation in Latvia,” – Osis believes.

With that, according to him, legislators will need to face litigations, because restriction can be considered as discrimination of any specific manufacturer’s product. In order to be able to discuss the adoption of real restrictions, it is first necessary to statistically prove the habits of Latvia’s youth – what are the energy drink consumption rates among Latvian youth, what is the healthcare statistics in Latvia, can society actually follow energy drink consumption rates?

It is also necessary to prove that this goal cannot be achieved through other means. Until all these criteria are met, the restriction to sell energy drinks to individuals under the age of 18 would just as unreasonable as prohibiting the consumption of confectioneries because of fatty acids or potato chips because of salt.

The economist reminds that more than 90 years ago – in 1920, USA officially adopted the “prohibition”, which either completely or partially prohibited the manufacturing, transport and consumption of alcohol. It was adopted in some states even earlier. Even the manufacturing of beer was limited. Hundreds of alcohol manufacturing plants and breweries were shut down, hundreds of bars and restaurants were closed down as well. This was very beneficial from the point of view of general public order, welfare and healthcare – the number of homeless people reduced 3.5 times, the number of convicts in prisons reduced four times and the economy had an increase of household savings.

“However, shortly after the adoption of the law, something happened that legislators could not foresee. Gangsters managed to ruin almost all positive effects: entire fleets, railway carriages and trucks were organized to supply illegal alcohol to underground bars and restaurants. In spite of the fact that 2.5 thousand secret agents were hired to combat illegal alcohol trading, corruption within the border guard, police forces and other state institutions increased significantly. It is estimated that the Mafia earned more than $2 billion in the ’20s “thanks” to the prohibition,” – Osis noted.

He added that the Soviet Union ignored the unfortunate experience of USA and adopted strict restrictions on alcohol consumption in 1985. The end result did not differ much from the result USA got in the end.

According to the economist, the adoption or cancellation of a “dry” law of any kind cannot be used directly in regard to the energy drink market. Nevertheless, this experience was one of the main reasons for the adoption of the free market principles in the EU and other countries.

“I would like to call everyone to direct their attention to this bill, because it is not just a story about energy drinks – it concerns the unfortunate experience in adopting restrictions of any kind,” – he concludes.


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