## Facts

- Unilever Italia challenged Central Food's olive oil labeling practices, claiming they breached Italian law enacted to implement an EU directive.
- Central Food used a refillable bottle system for olive oil, which Unilever argued contravened the directive’s aims to prevent consumer confusion over quality and origin by restricting container reuse.
- The Italian law contained a loophole permitting the reuse of containers under certain conditions, prompting debate over whether it properly implemented the directive.
- The legal dispute concerned whether Central Food’s actions violated the directive’s objectives as implemented in Italian law.

## Issues

1. Whether national courts are required to interpret national law in conformity with the wording and purpose of an EU directive, even when the law predates the directive.
2. Whether the doctrine of incidental effect applies in disputes between private parties where direct effect of the directive is unavailable.
3. To what extent the principle of incidental effect obliges national courts to ensure the effectiveness of EU law in horizontal disputes.

## Decision

- The ECJ held that the Italian law was inconsistent with the relevant EU directive.
- Because the dispute was between private parties, the directive did not have direct effect against Central Food.
- The Court clarified that national courts must interpret national law, as far as possible, to achieve the directive’s purpose, including when the national law predates the directive.
- The ECJ extended the scope of incidental effect, obliging courts to ensure that national law does not undermine the objectives of EU directives, even in horizontal situations.

## Legal Principles

- The doctrine of incidental effect prevents national courts from interpreting national law in ways that undermine the objectives of EU directives, even where direct effect is not available.
- National courts are under a positive obligation to interpret national law, so far as possible, in line with both the wording and purpose of the relevant directive.
- Incidental effect is distinct from direct effect: the former operates indirectly by influencing national law interpretation in horizontal disputes, while the latter allows individuals to rely directly on EU law.
- The duty to interpret national law in conformity with a directive is limited to situations where such an interpretation is possible; it does not extend to cases where the national law is irreconcilably contradictory or requires interpretation contra legem.
- The principle strengthens Member States’ obligation of sincere cooperation under Article 4(3) TEU to fulfill EU law objectives.

## Conclusion

The ECJ's judgment in Unilever Italia v Central Food significantly extended the doctrine of incidental effect by requiring national courts to interpret domestic law in accordance with EU directives' wording and purpose, even in cases between private parties, thereby enhancing the effectiveness of EU law and reinforcing Member States' obligations under the principle of sincere cooperation.

Unilever Italia SpA v Central Food SpA (Case C-443/98) [2000] ECR I-7535