The decision this morning came as a surprise after the advocate general on the case indicated in April that the directive should be considered invalid as it flouted principles of community law.
Most European court case rulings follow the opinion of the advocate general.
However the EU directive will now go ahead, scheduled for implementation next month. It will restrict all vitamin and mineral supplement ingredients to those on an approved list.
For some, the laws will guarantee a new freedom to market food supplements across European borders and in countries where supplements have not been recognized as a food category. These more restrictive markets, like Spain, Italy, the Czech Republic and Poland, have been keenly awaiting the directive.
In other markets however, particularly the more liberal UK, Ireland and Netherlands, the directive is likely to see a slimmer choice of products on the shelves.
The UK's Health Food Manufacturers Association (HFMA) and the National Association of Health food Stores (NAHS), responsible for a joint case against the Commission, say the directive threatens up to 5,000 commonlyconsumed products on sale in the UK because they contain more than 200nutrients not on the directive's 'positive' list of permitted substances.
The trade bodies have today asked the British prime minister to intervene in Europe following their defeat.
"We're extremely disappointed withtoday's verdict," said David Adams, director of HFMA.
"We call on the prime minister, who currently holds the EU presidency, to deliver now on his stated commitments and go to Brussels to get the legislation rewritten in such a way that the UK is allowed to permit onto its national market products, which otherwise lie outside its restrictive scope."
Lawyers for the HFMA and the NAHS argued at the European Court of Justice in January that the directive would impose an unnecessary burden on British business and there were no reasons to believe it was necessary to protect consumers' welfare.
They also said the directive violated the central community principle ofsubsidiarity, meaning decisions should be taken at the lowest practical level - in this case by competent authorities in the UK - and was an unlawful restriction on the freedom to trade.
Yet the ECJ said that the postivie list system "is appropriate for securing the free movement of food supplements and ensuring the protection of human health".
The regulatory costs required to gain permission for a nutrient not on the current positive list, as well as other implied by the directive, are expected to hit many smaller, more specialist supplement suppliers hardest.
Associations for other parts of the European industry were happy with the decision however.
Lorène Courrège, director of regulatory affairs at the European Health Product Manufacturers' association (EHPM), said the decision ends a real concern in more restrictive markets that if the directive was annulled, supplement makers would have to face the previous situation of vitamins and minerals being regulated under medicines law.
Patrick Coppens, secretary general of the ERNA, told NutraIngredients.com: "It lays down the principle of risk assessment to regulate supplements. We are quite relieved that the court did not annul the directive. This would have put harmonization back two to three years."
Correge added: "We are now looking ahead to the next stage, which will be a key priority for us - the setting of maximum levels. This will shape the market."
The Commission has said it will come up with a proposal for maximum permitted levels for vitamins and minerals in 2006 with a view to adopting these as part of the directive by 2007.
Meanwhile France has still not implemented the 2002 directive into its national laws and could face action by the Commission.