Over the years, comparative advertising has become a popular tool among companies to promote their products by comparing them to a competitor's products. Comparative advertising is said to be done when one company advertises its products by comparing itself to the products of its competitors. Honest and non-misleading comparisons are fair play to advertise your products and give them an edge over others. However, when the comparison results in defaming and disparaging the goods of the competitors, it results in product disparagement.
One such case of comparative advertising that is currently in the limelight is Hindustan Unilever Limited vs. Gujarat Cooperative Milk Marketing Federation1 which is dealt with below:
- Anand District Milk Producers Union Ltd (referred to hereinafter as 'Amul') aired two advertisements that compared Amul's 'ice cream' with other 'frozen desserts'. The storyline follows a young girl who shows courage in the dentist's office thereby qualifying her for an ice cream as a reward. This then leads to a visual showing two cups – one labeled 'Amul' and the other labeled 'Frozen Desserts – is made of edible vegetable oil'. While the former cup has milk flowing into it, the latter has a thick, semi-solid liquid resembling 'Dalda' flowing in. With this visual in place, the voice-over then clarifies that Amul "ice cream" is made out of "real milk" as opposed to "frozen desserts" which are made out of vanaspati (the semi-solid substance). It also instructs that children should be given pure, 'real milk' made 'ice creams' instead of 'frozen desserts' made out of 'vanaspati/vanaspati tel.'
- The advertisement also made an appeal to the customers to check the packaging for ingredients before making a purchase. The disclaimer is entirely illegible and notes the following "FSSAI – the apex body of food safety and regulatory norms in India defines Ice-cream as milk based product that has not less than 10% milk fat and Frozen Dessert as vegetable oil based product that has not less than 10% vegetable oils. It also prohibits any misguiding practices of presenting frozen desserts as ice-creams." Vanaspati tel mentioned in the voice over refers to vegetable oil. In the second advertisement, the voice-over and disclaimer both substitute the words 'vanaspati ten' for 'vanaspati'.
- Hindustan Uniliver Limited, owner of Kwality Wall's, who is the market leader in the frozen desserts category at 51.3% market share, took issue with this depiction that frozen desserts contain 'vanaspati/vanaspati tel' – which is admittedly bad for health. It joined other players in the frozen desserts market as parties to the suit, as defendants 3 & 4 (Vadilal). HUL claimed that the advertisements (TVCs) disparaged all the products sold under the category 'frozen desserts' and by extension disparaged HUL's products.
The Bombay High Court raised several pertinent issues but the subject of this article and the issue dealt with herein is whether the television commercials aired by Amul amounted to product disparagement of frozen desserts in general.
CONTENTIONS OF THE PARTIES
The main contentions of Amul were that while comparing television advertisements, a frame by frame analysis of the advertisements should be avoided as in comparative advertisement, puffery of its own products is allowed. Amul also contended that an alert and aware customer can easily understand that 'vanaspati tel' refers to vegetable oil and not 'Dalda'.
HUL contended that by showing vanaspati flowing into a cup, Amul wanted to portray that all frozen desserts contain only vanaspati/vanaspati oil which translates to Dalda and is admittedly bad for health. HUL clarified that Kwality Wall's range of 'frozen desserts' do not contain vanaspati. In fact, Kwality Wall's range of frozen desserts contains milk/milk solids. The only difference is that frozen desserts use vegetable fat instead of dairy fat, which actually makes them healthier as they have lower saturated fat and do not have cholesterol.
OBSERVATIONS OF THE COURT
To understand the case, the Court had to differentiate between 2 points:
- The difference in contents of ice-cream and frozen desserts.
- The difference between comparative advertising and product disparagement.
To address the 1st point the Court looked into the Food Safety and Standards Regulations Rules, 2011.
Section 2.1.7 sub sections (1) and (3) of the Rules note –
"Ice Cream means the product obtained by freezing a pasteurized mix prepared from milk and /or other products derived from milk."
"Frozen Dessert means the product obtained by freezing a pasteurized mix prepared with milk fat and / or edible vegetable oils."
The Court held that by indicating that all frozen desserts use only vanaspati/vanaspati oil, which is admittedly bad for health, Amul had disparaged the entire category of frozen desserts in general. HUL and Vadilal, being the market leaders for frozen desserts, had produced substantial evidence to assert that they did not in fact use vanaspati or vanaspati oil in making their products. The advertisements that were aired led the public to believe that frozen desserts were of an inferior quality than milk-based ice creams.
Therefore, the Court held that the entire concept and intent of the commercials was disparaging.
To address the 2nd point, the Court looked into various other landmark decisions on comparative advertisement. Few notable ones include Reckitt and Colman of India Limited vs M.P Ramachandran and Another2, Dabur India Ltd vs Colgate Palmolive3 and Godrej Consumer Products Ltd. Vs Initiative Media Advertising.4
For there to be product disparagement, there has to be three key ingredients,
- a false/misleading statement regarding the goods,
- that deceived consumers and
- was likely to influence consumer behavior.
In the present case, Amul's TVCs had not only made a false statement regarding the constituents of frozen desserts but had done so with the intention to potentially deceive ordinary customers who are aware of the health issues associated with vanaspati.
Therefore, in light of the above, the Court held that:
- a manufacturer or a tradesman is entitled to boast that his goods are the best in the world, even if such a claim is factually incorrect, and
- that while a claim that the goods of a manufacturer or the tradesman are the best may not provide a cause of action to any other trader or manufacturer of similar goods, but the moment the rival manufacturer or trader disparages or defames the goods of another manufacturer or trader, the aggrieved trader would be entitled to seek relief including redressal by way of a prohibitory injunction.
The Court granted an injunction to HUL and restrained AMUL from airing the TV commercials and upheld the generic disparagement of 'frozen desserts'.
It held that "the content, intent, manner and storyline of the impugned TVCs seen as a whole, convey a false, untruthful, malicious and negative message" thereby disparaging "the entire category of products known as Frozen Desserts of which the Plaintiff is a market leader" and "also disparaging the products manufactured and sold by the Plaintiff and adversely affecting the business of the Plaintiff."
According to a report by The Business Standard, a leading financial daily, Amul is set to appeal the decision. However, it seems unlikely that the Order will be reversed as the Court has not only comprehensively formulated the issues but has used sound reasoning to address them.5
1 5 SUIT (L) NO. 204 OF 2017 BOM HC
2 1999 PTC(19) 741
3 2004 (29) PTC 401 (DEL)
4 2012 (52) PTC 260 (Bom)
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