Clover wins the butter battle

Stork’s butter spread label is misleading, top court finds…

Stork, which is part of holding company Remgro’s Siqalo Foods, has seven days to stop selling its butter spread in its current packaging, after the Supreme Court of Appeal found the label is likely designed to mislead the public into thinking that the product is made of pure butter. 

Siqalo says it will abide by the ruling and change the labelling while the products already on the shelf will not be affected. 

“The availability of the product to customers at retailers will not be disrupted. There are no changes to the product itself — only the packaging will change.”

Stork’s butter spread is made of 38% butter, with 30% vegetable oil and is referred to in the Agricultural Product Standards Act regulations as “modified butter”.

Competitor Clover, which has produced modified butter spread Butro since 1985, approached the court in March 2021 with a complaint that Stork was marketing its product as a pure butter product unlawfully and in a misleading fashion. Butro has a higher percentage of  butter than the Stork spread does. 

It tried to get an urgent interdict to stop Stork from selling its spread, saying it was “competing unlawfully” in part because the label contravened at least two statutory regulations.

Clover failed in its bid to have the case heard urgently, but it was heard in the North Gauteng High Court later in 2021. In November of that year, a judge ordered Stork to stop selling the product in the current packaging.

Siqalo, which produces the Flora, Stork, Rama and Rondo brands, was purchased by Remgro from Unilever in 2017. Siqalo appealed the high court judgment.

The Supreme Court of Appeal, however, said this week that the Stork “butter spread” label was likely designed to deceive customers into thinking the were buying a predominantly butter product.

The biggest word on the label is ‘butter’ and legally it cannot be bigger than the product designation, which is modified butter, Hahn & Hahn lawyer, Janusz Luterek, who acted for Clover

The court found the line “medium fat modified butter spread” was “barely perceptible”.

The judgment read: “As observed earlier, the word butter is undeniably the dominant feature on the appellant product label. It follows that the conclusion [that the] label is likely to create a misleading impression … is inescapable.”

But Siqalo said it “has always acted in good faith without the intent to mislead and in the best interests of the consumer. In the development of the product, consumer research had demonstrated respondents understood the product as a modified butter spread”.

The court also found Clover’s decision to try to get an interdict against the sale of the product was appropriate, despite Stork arguing it should have written to the minister of agriculture instead. The court ruled the minister of agriculture did not need to be included in the court case as Stork had argued.

Both the Agricultural Product Standards Act and the Consumer Protection Act have regulations that prohibit misleading labels. However, it is more common for competitors to take action to enforce the law than for environmental health practitioners, who are employed by municipalities, to do so.

Siqalo said “the Supreme Court of Appeal judgement allows us to move forward with legal certainty”.

Source: BuinessLive.co.za

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