The Court of Appeal has found in favour of Dunnes Stores on key issues in a comparative advertising case taken by competing supermarket chain Aldi.  Aldi complained that an advertising campaign run by Dunnes from June to August 2013 had breached comparative advertising rules and infringed Aldi’s trade mark.  Aldi was successful in the High Court in June 2015.  The Court of Appeal has now overturned that decision insofar as it relates to price comparisons on shelf-edge labels (Aldi Stores (Ireland) Ltd & Anor v Dunnes Stores IECA 116).

Price-Only Comparison

The Dunnes’ advertising campaign consisted primarily of shelf-edge labels comparing Dunnes’ product prices with Aldi prices.  The High Court, assessing a sample of those labels, found that the comparisons were not lawful.  It decided that the Dunnes and Aldi products could not be compared on price alone as there were significant differences between them.  Such advertisements needed to include a comparison of other relevant features of the products to be permitted.

The Court of Appeal disagreed.  It found that the High Court had confused two different questions in coming to its conclusion.

• The first question to ask was what products may be compared.  According to the Court of Appeal, the law allows comparison of products that meet the same needs, unless that comparison would be misleading.  The compared products do not have to be identical.
• The second question to ask was what type of comparison was allowed. Referring to the relevant regulation as well as to the economic freedom of the advertiser, the Court of Appeal found that a comparison confined to price alone (unless otherwise misleading) is legitimate.

“No Sensible Person Would Be Misled”

The Dunnes’ shelf-edge labels also included the slogans “Lowest Price Guarantee” and “Always Better Value”.  The High Court decided that these slogans were not permitted as the labels did not refer to specific Aldi products or include a comparison of features other than price.  The Court of Appeal in overturning this finding held that the average consumer would have understood that the Dunnes’ product had been compared with a corresponding Aldi product. 

Banners

Finally, the High Court found the Dunnes’ banners referring to Aldi were in breach of the comparative advertising regulations.  The Court of Appeal declared that the banners were not permitted but on different grounds. It held that as these banners did not compare the prices or other features of rival products, the protection from a claim of trade mark infringement under the comparative advertising regulations did not apply.  This brought about the same result as the High Court decision. 

Conclusion

The Court of Appeal left open the question of whether a retrial should now evaluate the labels using this proper interpretation of the comparative advertising rules. Nonetheless, the Court’s decision should be welcomed by retailers and advertisers. The decision re-opens the door to price-only comparisons advertising and affords greater freedom to retailers and advertisers intending to run comparative advertising campaigns.  

Contributed by John Sugrue