The decision yesterday in effect gives trademark status to feta producers in mainland Greece and the department of Lesbos, and shuts out companies like Arla Foods, one of the largest EU producers ofthe cheese outside of the country.
The ruling upholds the EU's geographical indication (GI) system, under which Greek feta cheese producers received protected designation of origin (PDO) status in 2002.
Once GI status is given other food makers must either stop calling the products by the protected name, or move production to the designated area using the same sourced ingredients and processes.
The GI regime is meant to protect local food producers across the bloc from having their traditional brand names used by processors elsewhere. The system has shut out producers who were using whatthey thought was a generic name for their products, or who hoped to capitalise on the success of traditional foods.
Since its introduction in 1992 about 700 foods and drinks have been approved for GI protection, with another 300 applications under consideration. Court battles over such products as pork pies,cheeses and other foods have been the result, with food processors sometimes suddenly finding they have lost a best seller.
Northern Foods, for example, is facing a situation in which it would lose a growing market for its Melton Mowbray pies. The company has taken the UK government to the court to try and block a GI application to protect local makers of the pork product.
PDO status not only requires that foods and drinks must be produced in a certain area, but also specifies the ingredients and processes used to produce the product.
In order to be registered as a PDO, a traditional name such as 'feta', which is not the name of a region, place or country, must refer to an agricultural product or a foodstuff from a defined area with natural and human factors conferring specific characteristics to the produt. The name cannot have become generic in use.
The EU plans to take the wider battle over its GI system to the World Trade Organisation soon in a bid to have the protection recognised internationally.
The test case will be Italy's right to exclusively produce Parmesan. Plans to begin work on a set of international production rules for Parmesan were shelved earlier this year by the Codex Alimentarius commission, the food safety standards body of the UN's Food and Agriculture Organisation (FAO) and World Health Organisation (WHO).
The granting of PDO status to feta was contested at the EU's top court by Germany and Denmark, supported by the France and the UK.
They lost when European Court of Justice ruled that white cheese soaked in brine and called feta must originate from specified areas in Greece.
The product must be made from sheep or goats milk from the area. It must be produced using the traditional method, which requires straining without pressure.
"The interplay between the natural factors and the specific human factors, in particular the traditional production method, which requires straining without pressure, has thus given fetacheese its remarkable international reputation," the court ruled.
Many cheese makers outside Greece used cows milk and speeded up the process by applying pressure and temperature to their feta products. They or their governments have been battle against Greekfeta producers for the right to make the product since 1996.
Germany and Denmark, supported by France and the UK applied for annulment of the registration of 'feta' as a PDO for Greece, argued that the name had become a generic term, like"cheddar".
The court found that while white cheeses soaked in brine have been produced for a long time, not only in Greece but in various countries in the Balkans and the southeast of the Mediterranean basin,those cheeses are known in those countries under names other than "feta".
France and Denmark have been producing "feta" type cheeses since the 1930s. German companies began in 1972.
The court noted that in other member states, feta is commonly marketed with labels referring to Greek cultural traditions and civilisation.
"Thus, consumers in those member states perceive feta as a cheese associated with Greece, even if in reality it has been produced in another member state," the judges said inruling the name is not generic. "As regards Denmark, the court notes that the relevant Danish legislation does not refer to 'feta' but to 'Danish feta', which would tend to suggestthat in Denmark the name 'feta', by itself, has retained a Greek connotation."
Greece produces about 85 per cent of the feta consumed in the EU, or about 115,000 tonnes a year.
Danish dairies produce about 27,000 tonnes of feta a year, Germany from 20,000 to 40,000 tonnes. France producers between 8,000 to 20,000 tonnes a year. All the non-Greek producers will lose theright to the feta name at the end of next year.
The court decision will particularly affect Arla Foods, which last year said it had achieved a 14 per cent share of the market in Denmark for its branded feta product. The company said it wasexpanding production to meet the demand. The company said it was experiencing double digit growth in several European markets, from 20 per cent to 48 per cent.
To obtain the necessary data needed for a possible registration of the name "feta" as a PDO, the European Commission arranged for a Eurobarometer survey to be carried out, questioning12,800 nationals of the twelve member states then making up the European Community.
The Commission concluded that the name "feta" had not become the common name of the product, and that it continued to evoke a Greek origin.
About 40 per cent of the bloc's citizens say they are willing to pay a 10 per cent premium for specially designated products, according to another Commission survey.