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This week the Supreme Court of Appeal (SCA) decided to uphold a previous decision of the Gauteng Division of the High Court in Pretoria. The appeal was about the lawfulness of the names, words, expressions, and marks depicted on the product container of Stork Butter Spread, a product of Siqalo Foods.
Clover SA initially lodged a civil lawsuit against Siqalo Foods in March 2021 over the fact that the latter had commenced promoting, marketing, distributing, and selling the product as a butter product, when it was in fact not such a product, but a modified butter product. This product was in direct competition with Clover SA’s modified butter product under its registered trademark Butro, which has been in use since July 1985.
Five findings of SCA
During its verdict the SCA found that Siqalo Foods’ product’s correct classification was that of a ‘modified butter’, rather than ‘butter’.
It also found that the label would likely convey or create a false or misleading impression as to the nature, class, or identity of the product. The SCA said in a press statement that it also tended to support the suggestion that the label was designed to mislead the public into thinking that the product was a pure butter product. One of the main reasons for this was the fact that the word ‘butter’ was the most prominent word on the food label. The product’s class designation of ‘modified butter’ was barely perceptible on the food packaging.
The SCA said “the conclusion that was that the label was likely to convey or create a false or misleading impression as to the nature or class of the appellant’s product was inescapable – the peculiar get-up of the label would self-evidently (or at least be likely to) deceive or confuse the notional consumer into believing that the product was a butter product.”
The SCA also found that it wasn’t possible for Clover SA to take the matter to the minister of DALRRD. “Moreover, the Act and the Regulations appeared to make no provision for any such further approach,” the SCA found. “In any event, Section 3 of the Act fell far short of affording the respondent the remedy sought in the application, namely, to interdict and restrain the appellant’s continuing unlawful conduct.”
“This is the first legal case of its kind in South Africa, because one would presume that you could lodge a case at the Department of Agriculture, Land Reform and Rural Development (DALRRD) when you have a problem with the labelling of a product,” said Janusz Luterek, an attorney of Hahn and Hahn Attorneys and representative of Clover SA in the case.
Food labelling falls under the Agricultural Product Standards Act, 1990 (Act 119 of 1990), which – along with its relevant regulations – is governed by DALRRD. “However, the Act does not allow for third party complaints.”
In the case of the Siqalo product, it was labelled as ‘butter’, but the product is in fact only 38% butter. “For Clover this was a problem, because it was competing with their (butter) products, while it wasn’t in fact butter.”
Usually, in such an instance a complaint would be launched with DALRRD, but nothing would then happen, Luterek said.
To circumvent such a situation, Clover SA’s legal team decided to launch a civil ‘unlawful competition’-case against Siqalo in which they argued that a product, which is not butter was competing against butter.
“The other side argued that we should’ve gone to the department first, but the SCA disagreed, because the Act did not specify a procedure for lodging an official complaint it was possible to take the matter directly to court.”
Luterek said this case could now serve as a basis for other similar foodstuff cases going forward. – Susan Marais, Plaas Media