WHAT'S IN A NAME
Food giant Clover and rival slog it out over labelling of a dairy product as butter
Clover has taken a competitor to court for suggesting its modified butter product was butter. The dairy giant says Siqalo Foods, producer of the Stork BUTTER Spread, is not only deceiving customers but also using underhanded labelling to give itself an unfair advantage.
Dairy giant Clover has taken a competitor to court, and won, for naming its modified butter product, BUTTER – yes, in capital letters.
Far from it, the producer of “Butro” said Siqalo Foods, the owner of the Stork margarine brand, was misleading consumers for its assertion that its Stork BUTTER Spread was butter.
The product is promoted on Facebook as “The cream of butter spreads is here – NEW Stork BUTTER Spread. Indulge in an even creamier country taste that spreads so easily on anything from croissants to scones, and transforms even the simplest slice of bread into a scrumptious country escape”, while on Instagram, it’s described as “the “cream of butter spreads”.
Clover said the product’s labelling fudges the fact that this is not pure butter but rather a modified butter product.
Stork BUTTER Spread is labelled as a 60% medium-fat modified butter spread with sunflower and palm oils. It costs about R70 for a 500g tub compared with Butro, an arguably superior product, which retails for about R84. The BUTTER Spread is currently on special at Checkers, costing R99 for two tubs.
Clover had contended that by claiming that Stork BUTTER was a butter, Siqalo was in contravention of the Agricultural Product Standards Act and dairy products regulations.
The act says that butter and cultured butter with or without added foodstuffs shall be: “manufactured by churning or crystalisation of cream using the appropriate method; and (b) not contain any animal fat, vegetable fat or marine fat”.
Both (full-fat) salted and unsalted butter must have at least 75% minimum milk fat, while modified dairy products, which relate to butter in general appearance, presentation and intended use, must not have more than 50% of the fat, protein and/or carbohydrate content derived from a source other than a primary dairy product.
Medium fat salted and unsalted butter must be within the range of between 50% and 70% fat.
Clover’s Butro and Stork BUTTER Spread are both “modified butters”.
The act says that modified butter and cultured modified butter shall be manufactured by blending butter fat with plant fat, animal fat and/or marine fat. The word ‘spread’ may form part of the class designation in the case where the modified butter and cultured modified butter are “specifically manufactured for such purpose”. These butters are also labelled in accordance with their fat content: Full fat, 75%, and medium fat, 50% to 70%.
Profusion of confusion
Clover had argued that using the term ‘butter’ so prominently was not only unlawful competition but also misleading to consumers.
In February 2021, Clover’s attorneys, Hahn & Hahn, wrote a letter of demand to Siqalo, demanding that the product be withdrawn. The latter refused, forcing Clover to lodge an urgent application for an interdict on 10 March 2021, which was struck off the roll for lack of urgency.
On 3 June 2021 Clover filed its amended Notice of Motion in an application against Siqalo Foods, seeking an interdict that the respondent be interdicted and restrained from: competing unlawfully by selling, advertising, marketing and/or distributing its modified butter products in the current form; that the respondent be interdicted and restrained from trading in contravention of the Agricultural Product Standards Act; and that the respondent remove the offending label from all packaging within seven days of the order. Where the label cannot be removed, the product must be destroyed. It also sought a costs order against the respondent.
Clover argued that the label is statutorily non-compliant and thus unlawful. Stork BUTTER Spread was marketed as butter starting with the word BUTTER, which was the primary and capitalised lettering on the packaging.
The formatting of the label of the respondent’s product container is as follows: “Stork”, “Butter” and “Spread”, appearing in sequence on the side of the container. “Stork” is at the top; BUTTER appears immediately below the word “Stork” and the entire word is capitalised in a font that is larger and accentuated in comparison to both “Stork” and “Spread”, which is in capital letters and appears immediately below the word ‘BUTTER’.
Immediately below the words Stork BUTTER Spread are black and white Fresian cows, and below them, the words “medium fat modified butter spread”, capitalised but in a much smaller font. At the top right of the product container is another script against a navy background, with the words “easy to spread” and the words “with sunflower and palm oils”, imprinted in a small, faint, white font. It is designated as a “dairy product”.
Clover argued that on the label, the word ‘BUTTER’ is exaggerated to denote “butter” as if it was in accordance with the act’s definition of what butter means, when it is not the case, when the respondent’s product is “anything but butter”.
It furthermore argued that the labelling format was deliberately designed to mislead consumers to think that the product is “butter”, giving rise to confusion, or the likelihood of confusion.
In its answering affidavit, the respondent alleged that Stork BUTTER Spread is a trademark, which it was in the process of having registered as a trade name, defined according to various dictionaries as “the name used for an article among traders”, “a name used by a company in dealing with customers, which may not be the same as the one it uses for legal purposes” and “a trade name is the name which manufacturers give to a product or to a range of products”. It further argues that given that both parties’ products are modified butters, they are both subject to the same statutory and regulatory requirements.
In passing judgment, North Gauteng High Court Acting Judge Livhuwani Vuma said the respondent’s label “does indeed convey or create or is likely to create a false or misleading impression given the overamplified word ‘butter’”.
“In my view, the inescapable impression which is created or is likely to be created by the over-accentuated word ‘butter’ is that the product, which is in fact ‘modified butter’, is pure butter or butter. This is clearly in contravention of regulation 26(7)(a) since unless the word is either the registered trademark or trade name of the trader, same may not be bigger than the class designation, which is not the case herein…”
She said the average consumer’s first and dominant attraction will be the word “butter” and not the words “modified butter”, which pale by comparison and are near illegible.
“This false impression or confusion created by the respondent’s label should be denounced, primarily for the protection of the consumer not to be confused or misled and equally for traders who will unavoidably suffer financial harm due to this unlawful competition.”
Citing Puma AG Rudolf Dassier Sport, the judge said that without peering too closely at the registered mark and the respondent’s label, “the first impression the court gets would be what would most likely be the impression created to an average consumer”.
“Even myself, at my first glance of the label, I was under the impression that the product is in fact butter or pure butter and not modified butter as it actually is. Simply put, the label both misled and confused me.”
Accordingly, the words Stork BUTTER Spread cannot be said to pass regulatory muster.
“From a commercial perspective and having considered the issues, I am satisfied that the respondent’s trade is non-compliant with the statutory provisions; that the the respondent is being unduly advantaged at the applicant’s expense whilst the consumer’s deception and confusion continues unabated, unless and until the respondent is interdicted.”
Siqalo has been interdicted and restrained from selling, promoting, advertising, marketing and/or in any way distributing its modified BUTTER with the current labelling; given seven days to remove the offending label from all modified butter packaging and wrapping material, and modified butter marketing and promotional material in their possession or under their control; and where it cannot be removed, that it destroys the product.
Costs were awarded to the applicant. BM/DM