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Beer is probably one of the most important German achievements. In the year 736, a special barley juice was first reported in Geisenfeld, Bavaria.
Beer is Germans’ third favourite drink
Contrary to what you might think, beer is not the Germans’ favourite drink. Coffee and mineral water are still in first and second place. In 2016, however, the per capita consumption of beer in Germany was still around 104.1 litres on average. In a European comparison, only the Czech Republic consumes more beer per capita at around 140 litres, while in the USA, for example, only around 80 litres are consumed per year and in India, at the statistical bottom of the table, only two litres.
The third-placed beverage, beer, is also of great economic importance. Even though beer sales have fallen slightly in recent years, 46.8 million hectolitres of beer were still sold in the first half of 2017. It is therefore not surprising that the name beer enjoys special protection in Germany – at least until now.
The Purity Law has protected the name ‘beer’ for over 500 years
The best-known protection consists of the rule commonly referred to as the ‘Purity Law’, which stipulates that beer may only contain certain ingredients. The Purity Law, according to which beer must be made from hops, malt, yeast and water, can be traced back to various historical legal systems. In most cases, however, reference is made to a state ordinance of the Duchy of Bavaria from 1516, which states:
‘We also want in particular that everywhere in our towns, markets and in the countryside, barley, hops and water should be taken and used for no other purpose than that of barley, hops and water.’
The brewing regulations were a reaction to numerous complaints about poor quality beer. In order to secure their profits despite rising raw material prices and varying regional conditions, many brewers reacted by producing poorer quality beer.
The purity law: Not only quality assurance
However, the background to this was not only quality assurance, but also securing the food supply. This was because the more valuable wheat or rye was reserved for bakers. Other reasons probably included an early attempt to regulate drug consumption. The aim was to avoid the use of intoxicating ingredients in the production of beer. Instead, the calming and preservative hops were to be used for brewing.
Others, on the other hand, suspect disdainful economic considerations. According to them, the ordinance was intended to equalise the competitive advantages of breweries from the Rhineland and northern Germany, which added herbs to the beer that did not grow in Bavaria.
The term ‘beer’ is still protected by law today
The protection of beer, which is essentially based on the Purity Law, is standardised on the one hand in the so-called Beer Ordinance and in particular in Section 1 (1) BierV. This states:
Protection of the name beer
(1) Only beverages that are fermented and comply with the provisions of Section 9 (1), (2) and (4) to (6) of the Provisional Beer Act and Sections 16 to 19, Section 20 (1) sentence 2 and Sections 21 and 22 (1) of the Ordinance on the Implementation of the Provisional Beer Act may be marketed commercially under the designation beer – alone or in combination – or under designations or pictorial representations that give the impression that it is beer.
Put simply, it stipulates that only beverages that have been prepared using only barley malt, hops, yeast and water (in addition to other specifications) may be called ‘beer’. This is basically a good thing. This is the only way for consumers to know what to expect when they pick up a bottle labelled ‘beer’ in the supermarket or drinks store.
An absolute purity requirement violates European law
As early as 1987, however, the ECJ clarified that it is incompatible with the principle of the free movement of goods within the European Union to apply the provision of Section 10 BStG (die Vorgängerin des § 1 BierV), according to which the designation ‘beer’ is reserved for beer brewed in accordance with the Purity Law, to beers lawfully produced and marketed in other Member States (EuGH, Urteil v. 12.3.1987, Rs 178/84).
In other words, against the background of the idea of harmonisation, Germany should not be allowed to fry itself an ‘extra sausage’ for beer and discriminate against foreign products, which are not necessarily inferior to German beer in terms of quality, solely on the basis of these formalities.
The German legislator reacted to this by adding a second and third paragraph to § 1 BierV:
(2) By way of derogation from paragraph 1, fermented beverages produced abroad which do not comply with the provisions referred to in paragraph 1 may be marketed commercially under the designation ‘beer’ if they are marketable in the respective country of production under the designation ‘beer’ or a designation of the foodstuff corresponding to this designation. However, if additives subject to authorisation have been added to these beverages, this shall only apply if a derogation has been granted for these additives in accordance with the German Food and Feed Code.
(3) A beverage in which fermentation has been interrupted shall also be deemed to be fermented.
§ Section 1(2) BierV thus contains a general exception to the protective provision of paragraph 1 for products manufactured abroad. Accordingly, products manufactured abroad may be marketed under the name beer if this is permitted under the regulations of the country of manufacture. Going beyond the ECJ ruling, this applies not only to beers produced in EC member states, but also to beers from all other countries, including third countries. A very far-reaching restriction of protection for ‘beer’.
The term ‘beer’ must not be misleading
On the other hand, the protection of the designation ‘beer’ also arises from a legal regime that is distinct from the purity law regulating the ingredients of beer, the general prohibition of misleading labelling under the Unfair Competition Act (UWG). According to this, the labelling of a beverage may not mislead consumers about its quality.
Against this backdrop, the Court of Appeal ruled in summary proceedings in 2012 that the consumer is more than likely to categorise a drink labelled as ‘ginger beer’ as a drink containing beer due to the contested presentation. According to the Senate, if it is in fact only a beer- and alcohol-free soft drink, the labelling is misleading and therefore prohibited (KG, Urteil v. 12.10.2012, Az. 5 U 19/12).
In fact, ‘beer’ was absolutely protected – until now
Previously, German beer was no longer absolutely protected due to the severely restricted protection of the Purity Law since the 1980s. However, the protection against misleading labelling of the term ‘beer’ postulated by the KG, among others, meant that even beverages that could have been sold under the name ‘beer’ according to the Beer Ordinance could not be marketed due to the potential misleading of consumers.
A competitor of a drinks retailer essentially based an action for injunctive relief and damages brought before Munich Regional Court I on this very decision. He wanted to prohibit him from marketing so-called ‘ginger beer’ in Germany, which he imported in different varieties from other countries, including non-European countries. Interesting – although irrelevant to the case – was the fact that the plaintiff itself produced and marketed a soft drink with the same name, to which it had added a small amount of barley malt extract and apparently assumed that it was marketing a ‘beer-based’ drink within the meaning of the case law of the KG.
Ginger beer is not a ‘beer’, but can still be called ‘ginger beer’
Ginger beer is anything but ‘beer’ in the sense of the Purity Law. It is a carbonated, non-alcoholic soft drink with a ginger flavour. The soft drink ginger beer is similar to ginger ale in this respect, but contains more ginger and therefore tastes more intense, spicier and hotter.
Numerous importers and retailers label their ‘ginger beer’ as ‘ginger brew’ or ‘spicy ginger’, for example, rather than ‘ginger beer’, for fear of being in breach of the law. Some of you may have noticed these or similar containers when buying ingredients for the well-known cocktail ‘Moscow Mule’, for example:
Wikipedia still points out that
Contrary to what the name suggests, this is not beer in the sense of food law, but a lemonade, so that in Germany, due to the Purity Law, different sales descriptions without the terms ‘beer’ or ‘ale’ are prescribed.
After 501 years, will the purity law introduced in Bavaria be buried again?
This assessment is likely to be outdated after the decision of the Munich I Regional Court at the latest. The historic Bavarian Purity Law was thus effectively abolished by a Bavarian court of all places after 501 years (LG München I, Urteil v. 3.7.2017, Az. 4 HK O 19176/16).
By and large, the Chamber followed the defendant’s reasoning. Accordingly, the Beer Ordinance and thus the ‘Reinheitsgebot’ does not apply conceptually in relation to drinks labelled ‘ginger beer’, so that the exception in Section 1 (2) BierV is not relevant at all.
The court was also unwilling to follow the reasoning of the Court of Appeal (see above), according to which the designation ‘Ginger Beer’ for a drink that does not contain beer can be misleading because and to the extent that this is understood by the average domestic consumer as a reference to beer ingredients. The members of the Chamber, who belong to the relevant public, are familiar with ‘Ginger Beer’ from their own perception. It is known that this is not a beer, but an initially non-alcoholic soft drink, similar to ‘ginger ale’.
What will change for German breweries?
For companies that brew beer in Germany, everything remains the same following the decision by the Munich I Regional Court. According to Section 1 BierV, only beverages that are fermented and comply with the provisions of Section 9 (1), (2) and (4) to (6) of the Provisional Beer Act and Sections 16 to 19, Section 20 (1) sentence 2 and Sections 21 and 22 (1) of the Ordinance on the Implementation of the Provisional Beer Act may be marketed commercially under the name beer – alone or in combination – or under names or pictorial representations that give the impression that it is beer.
However, there are now likely to be changes for other types of beverages. This is because the legally binding decision of the Regional Court of Munich I takes the view that the Beer Ordinance only applies to drinks that are marketed under the name ‘beer’. The designation ‘ginger beer’ does not fall under this. This assessment could also apply in a similar way to other non-alcoholic drinks that are advertised in combination with the word ‘beer’.
What foreign beverage manufacturers and importers need to check now
However, it will be interesting for companies that produce fermented beverages abroad and/or wish to market them in Germany. In this regard, the Regional Court of Munich I firstly clarified that the Purity Law does not apply to many foreign designations that are only similar to ‘beer’. Even if the Regional Court’s decision may be somewhat short-sighted at this point, the exception in Section 1 (2) should in any case apply if the foreign fermented beverage is marketable in the respective country of production under the name ‘beer’ or a name of the foodstuff corresponding to this name.
A designation with the component ‘beer’ is permissible if it does not mislead the consumer. This is ensured if consumers already know the drink as such. In the case of ‘Ginger Beer’, the court was satisfied with the experience it may have gained from drinking ‘Moscow Mule’ to make this judgement. Changing the names ‘Ginger Beer’ to ‘Ginger Brew’ or ‘Spicy Ginger’ (see above) would therefore not have been necessary. The same is likely to apply to other drinks. Before importers initiate complex name changes, which can entail considerable costs, they should therefore check whether this is necessary at all. Even if this involves ‘beer’.
(Disclosure: Our law firm legally advised and represented the defendant).
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