The court battle has evolved as a ground breaking case over the EU's geographical indications (GI) system and the problems it can pose for manufacturers.
The case is a result of an application by the UK's Department for Environment Food and Rural Affairs (Defra) to the European Commission on behalf of local producers in the area of Melton Mowbray for their pies to be protected under the GI system. Defra, as part of a government policy to promote local foods, is applying under the GI system for protected geographical indication (PGI) status for the area.
If granted, it would be the first recipe-based product to receive such status in the UK.
Two of Northern Foods' factories that make the pork pie could face closure after a High Court judge ruled in December against the company's attempt to block Defra's bid to gain GI status for local producers.
The GI application would restrict production of the pies to an area of 1,800 square miles of the East Midlands. The area includes Leicester, Nottingham and Northampton.
Northern Foods argues that this is an artificially large zone. Samworth Brothers, the association's dominant member and the market leader, manufactures Melton Mowbray pork pies in Leicester, which is within the zone.
"We believe that the EU legislation, as it currently stands, is poorly defined and has allowed the biggest player in the market to cynically manipulate the law at the expense of consumers and the food industry," stated Carol Williams, company secretary for Northern Foods. "This is not in the spirit of the EU legislation which is supposed to protect traditional recipes and rural industries and the ruling should be an area of real concern for the UK food industry."
She said the company had unsuccessfully asked Defra for an indication on what kind of transition period it might be granted once it is barred from making the pies outside of the defined area.
"We are seeking certainty about the legislation for our employees, for our customers and for the food industry," she stated. "We are also concerned that Defra has chosen not to provide us with any indication as to the length of the transitional period it would be prepared to grant to allow us to manage the impact on our business and our employees."
Northern Foods currently makes its Melton Mowbray pies in Market Drayton, Shropshire, and Trowbridge, Wiltshire. The company has made Melton Mowbray pork pies for about 100 years at its sites across the UK.
Northern Foods issued a profits warning last week after an unsuccessful attempt to push through price increases with its customers.
The EU's rules require that GI approved areas stick to the specifications outlined in their applications, including the product's recipe, and keeping production and sourcing within a defined geographical area. For PGI products, the geographical link must occur in at least one of the stages of production, processing or preparation a food.
Once approved other producers outside the protected area may not use the name. A successful application would prevent other companies, including Northern Foods, from making the pies outside of the area specified in the application.
Facing a situation in which it would lose a growing multi-million euro market for its Melton Mowbray pies, Northern Foods decided to take the case to court last year in an effort to bloc the application. The case was heard by the Court of Appeal in early December.
On 21 December Justice Crane turned down Northern Foods' bid, allowing the application to the Commission to proceed.
The application also specifies that genuine Melton Mowbray pork pies must be grey in colour and made from uncured pork. The Melton Mowbray Pie Association's dominant member and leading commercial manufacturer, Samworth Brothers, produces both cured and uncured pies under the name.
Melton Mowbray Pork Pies are made by both large scale food manufacturers and small artisan producers up and down the country. The market is worth an estimated £51.7m per year and is the fastest growing section of the pork pie market.
Samworth Brothers has a 62 per cent market share, followed by Northern Foods with a 24 per cent market share. Samworth Brothers manufactures over 99 per cent of the pies produced by Association members. The Melton Mowbray Pork Pie Association lodged an application with Defra in 1999.
In 1993 EU legislation came into force which provides for a system for the protection of food names on a geographical or traditional recipe basis. The system is similar to the familiar "appellation controllée" system used for wine.
The scheme highlights regional and traditional foods whose authenticity and origin can be guaranteed. Under this system a named food or drink registered at a European level will be given legal protection against imitation throughout the EU.
Defra said the decision in December on Melton Mowbray pies justified the department's decision to champion the cause.
"The government's policy is to encourage more UK producers to take advantage of the EU protected food name scheme," stated Lord Bach, the UK's minister for food and farming. "Protection provides a means for producers to add value and to meet consumers' growing demand for food with a clear regional provenance."
To date, 36 UK products have been registered with the EU including Stilton Cheese, Cornish Clotted Cream and West Country Farmhouse Cheddar. A further 18 applications are being considered.
The EU wants international recognition for the GI system and has applied to World Trade Organisation to get it ratified. That application is being contested by the US, which claims the system is nothing but another form of trade protection.