A shot of Cassis to pep up a flagging economy

Cassis stands for blackcurrent flavour liqueur and EU trade principle swissinfo.ch

Swiss consumers are fed up with sky-high prices and the stagnating market, but the situation could soon change if Switzerland adopts a European Union ruling.

The Cassis-de-Dijon Principle – named after a blackcurrant flavour liqueur – is a European Court ruling, stating that a product legally manufactured in one EU state may circulate freely in another.

Switzerland has held back from joining the EU. But the price of Swiss independence is undoubtedly high, like the prices of goods in the shops.

A recent comparison of Swiss and German supermarkets showed that prices in Switzerland are as much as 70 per cent higher, with an average difference of between 20 and 30 per cent.

Experts say the reason is a sluggish domestic market, where the mechanisms supposed to promote competition do not work as they should. The relatively isolated Swiss market – in 1992 the Swiss voted not to join the European Economic Area – is bound by a whole series of rules and directives that restrict imports from other countries and result in high prices.

For example, cream produced in Germany does not find its way to Swiss dining tables, because it is labelled Sahne, rather than Rahm, the approved term in Switzerland. A similar example in Britain would be if Cornish pasties were not allowed to be marketed as such outside Cornwall.

In many cases, it is the packaging, not the product itself, that requires modification before it is allowed to cross the Swiss frontier. But the cost of re-packaging cancels out the advantage of importing an identical product which costs less in a neighbouring country.

The Cassis Principle

The EU solved this problem years ago. In 1979, the European Community Court of Justice issued a ruling that has entered the history books as the “Cassis-de-Dijon Principle”: a product legally manufactured and marketed in one of the members states may circulate freely throughout the Union.

The case was brought by an importer who was not allowed to sell Cassis-de-Dijon in Germany because it was below the alcoholic strength required under German law.

The principle was subsequently applied to other products, such as beer (prevented from entering Germany if produced with ingredients other than malt, hops, yeast and water) or pasta (banned by Italy if it contained common – as opposed to durum – wheat).

The first package of bilateral measures negotiated between Switzerland and the EU was a step towards harmonisation and abolition of the double certification system. In the case of toys, for example, the European CE certificate can also be granted in Switzerland. But the Cassis-de-Dijon Principle is still exclusive to EU member states.

So far these steps towards harmonisation have not produced the desired results and Switzerland – having acquired an unenviable reputation as “an island of high prices” – is considering introducing the Cassis-de-Dijon Principle on a unilateral basis.

Parliament has discussed this option, which is advocated by the president of the Competition Commission, the prices watchdog, and by consumer associations.

The economics ministry appears to have taken note. “This principle must be introduced as quickly as possible,” declared Economics Minister Joseph Deiss, who has instructed the State Secretariat for Economic Affairs (seco) to draw up proposals for implementing it. The official report should be on the table by the summer.

Protectionism

But introducing the Cassis-de-Dijon Principle, which many maintain will inject a much-needed dose of competition into the sluggish Swiss economy, is not as simple as it sounds. Its unilateral application – the only possible solution unless Switzerland joins the EU – will entail some undesirable consequences.

For example, if Swiss firms are not to be disadvantaged, they will have to be allowed to produce their goods in accordance with European (as opposed to Swiss) standards – a development which constitutes an indirect attack on Switzerland’s traditionally high standards of consumer, public health and environmental protection.

In an interview published by the Sunday newspaper NZZ am Sonntag, Walter Stoffel, president of the Swiss Competition Commission, rejects these objections.

“European quality standards are roughly on a par with our own. I am not aware of Europeans suffering any harm from consuming foodstuffs conforming to EU norms,” he pointed out. “In Switzerland, consumer protection is not necessarily better, just different.”

swissinfo, Doris Lucini

Key facts

The Cassis-de-Dijon Principle states that a product legally manufactured and marketed in one European Union member state may circulate freely in the other states.
Free trade can be impeded only if it can be demonstrated that a product represents a danger to public health.
The principle does not apply between Switzerland and the EU.

In brief

Products on sale in Switzerland cost on average 20% more than in neighbouring EU countries. This is mainly due to Swiss regulations which impede imports.

Adopting the Cassis-de-Dijon Principle would allow Switzerland to import goods from the EU without their having to conform to Swiss regulations and standards.