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RPC Bites 34 - Mediterranean tonic water too descriptive for the EUIPO, enhanced regulation for alcohol ads and UK-Australia trade deal agreed in principle

01 July 2021. Published by Ciara Cullen, Partner and Ben Mark, Partner

Welcome to RPC Bites. Our aim in the next 2 minutes is to provide you with a flavour of some key legal, regulatory and commercial developments in the Food & Drink sector over the last fortnight… with the occasional bit of industry gossip thrown in for good measure. Enjoy!!

Access the full edition of RPC Bites here.

Lidl v Fever-Tree: 'Mediterranean Tonic Water' held 'too descriptive' by the EUIPO

On 2 June 2021, the EU Intellectual Property Office's Fifth Board of Appeal (BoA) declared that two Fever-Tree trade mark registrations for 'MEDITERRANEAN TONIC WATER' were invalid, on grounds that they were descriptive. The decision follows an appeal against two first instance decisions by supermarket, Lidl.

Lidl argued that the trade marks, which were registered in classes 32 (non-alcoholic beverages) and 33 (alcoholic beverages) respectively, were purely descriptive of the goods that their specifications designated. Lidl also contended that the use of the word 'MEDITERRANEAN' referred to the Mediterranean region, which is internationally renowned for food, beverages and citrus fruits. On that basis, Lidl argued that the public would understand the marks to be purely descriptive of the geographical origin, ingredients, quality and/or taste of Fever-Tree's goods.

Upholding Lidl's appeal, the BoA found the public would understand the marks to be descriptive of carbonated drinks, either from the Mediterranean or containing ingredients typical of that region. Evidence which showed Fever-Tree using its trade marks in a purely descriptive sense was also found to be persuasive. It read: "By blending the essential oils from herbs that we have gathered from around the Mediterranean shore with highest-quality quinine from the 'fever trees' of the Democratic Republic of the Congo, we have created a delicate, floral tonic water."

As well as finding that the marks were purely descriptive and therefore incapable of performing their essential function of designating Fever-Tree as the origin of the goods, the BoA also found that the marks had not acquired distinctiveness through use. In coming to its decision, the BoA emphasised the strong public interest in ensuring that descriptive signs, especially geographical ones, are free for use by all.

The full decisions are available to download from the EUIPO's website.

Government confirms its plans to ban TV ads for HFSS foods before 9pm watershed

In the previous issue of RPC Bites, we reported on the potential impact of anticipated changes to the rules on advertising food and drink products deemed high in fat, salt and/or sugar (HFSS). In guidance published last Thursday, the Government has now confirmed plans to ban all TV ads for HFSS goods before a 9pm watershed. From 2023, HFSS TV adverts will only be permitted between the hours of 9pm and 5.30am.

The regulations will come into force at the end of next year and will apply to TV and UK on-demand programmes, as well as restrictions being implemented on paid-for advertising of HFSS foods online. The Government estimates that the TV and online restrictions could remove up to 7.2B calories from children's diets per year in the UK. It believes this could reduce the number of obese children by more than 20,000.

It appears that the Government has listened to concerns within the industry, regarding the extremely wide-ranging scope of the proposed restrictions. The latest guidance confirms that the regulations will only apply to food and drink products of most concern to childhood obesity and that various products, which when consumed in moderation, can form part of a balanced diet, will not face ad restrictions. Examples of excluded products, technically deemed HFSS, include honey, olive oil, avocados and Marmite. The restrictions will also only apply to businesses with more than 250 employees, bringing welcome relief to SMEs.

Report on children's exposure to alcohol and gambling ads released by the ASA

The ASA has been tracking children's exposure to age-restricted TV advertisements for some time now. It recently published an updated report, which specifically concerns TV ads for alcohol and gambling products between 2008 and 2020 (2008 being the first full year in which the gambling advertising rules were implemented).

Under rule 32.2 of the BCAP Code, alcoholic drinks containing 1.2% ABV or more may not be advertised in or adjacent to programmes commissioned for, principally directed at or likely to appeal particularly to audiences below the age of 18. A similar prohibition applies to alcoholic drinks with an ABV of less than 1.2%, for audiences aged under 16 years.

The report evidences that between 2008 and 2020, children's exposure to alcohol TV ads decreased significantly, from an average of 2.8 ads per week in 2008 to 0.9 ads per week in 2020. By contrast, children's exposure to gambling ads has slightly increased, from 2.2 ads per week in 2008, to 2.8 ads per week in 2020, albeit this peaked, in 2013, at 4.4 ads per week.

The decline follows a general trend whereby children are spending less time watching traditional linear television and are consequently being exposed to less TV ads across the board. However, the report theorises that although the manner of consumption has changed, the volume has not, with many children opting to consume media online, via on-demand services, video streaming channels and social media platforms. In support of this, Ofcom data shows that 97% of children between the ages of 5 and 15 watch videos on content sharing platforms and that 70% of children between the ages of 8 and 15 increased their video sharing platform consumption during the pandemic.

The CAP Code (the BCAP Code's non-broadcasting counterpart) applies to online ads, including ‘paid for’ ads on Video on Demand platforms and elsewhere online (think banners, pop-ups, pre-rolls and ‘pay per click’ ads on search engines) and ‘promoted’ social media posts. To avoid falling foul of the CAP Code, the report highlights the need for businesses to carefully regulate the ads that they run across all mediums, not just the traditional formats, which younger audiences appear to be conclusively moving away from. Read more

What's your recipe box's carbon footprint? Ask Gousto

In the wake of the COVID-19 pandemic and the associated lockdowns, demand for recipe box subscription services has (perhaps unsurprisingly) soared. Not content to rest on their laurels, popular brands are now diversifying their offerings, in an attempt to cement their positions in the market.

One such brand is Gousto which, in a recipe box first, recently announced the launch of a carbon labelling trial. Next year, Gousto customers will be able to view the carbon footprint of their proposed meals before ordering and decide whether to swap out ingredients for alternatives with lower carbon footprints. This will afford consumers the opportunity to make more environmentally conscious food choices, in just a few clicks.

The trial is just one of several recent environmental wins for Gousto: At the start of the month, a report by leading food sustainability thinktank, Foodsteps, highlighted that Gousto recipe boxes produce 23% less carbon emissions than an equivalent supermarket shop. This is due to a combination of reduced food wastage and lower supply chain emissions (Gousto provides a home delivery service, therefore eliminating the need for both suppliers and consumers to travel to supermarkets. The brand is also committed to providing 100% UK meat). Gousto's blog on the findings of the report can be viewed here.

However, avid RPC Bites readers will remember that the road hasn't always been so green for Gousto. In Issue 23 of RPC Bites, we reported that the brand had been found to have breached the CAP Code (Rule 11.3), by failing to substantiate claims that its Eco Chill Box was “100% plastic free” and “100% recyclable”. The decision highlighted the perils of so-called 'greenwashing', a current focus for the Competition and Markets Authority (CMA), as reported in our recent F&D blog. Read more

Tim Tam meets the Penguin as trade deal between the UK and Australia is agreed

In the previous issue of RPC Bites, we reported that UK farmers had raised concerns regarding the trade deal proposed by the UK Government to its Australian counterpart. As of 15 June 2021, an agreement in principle has officially been reached between the two countries, with terms to be finalised in due course.

A key feature of the agreement is the promise of "mechanisms to remove trade barriers, including tariff and non-tariff barriers, to make it easier for both sides to trade with each other". This means the removal of customs duties and technical consultations on non-tariff measures at the request of either country. This so-called 'liberalisation' is unlikely to be well-received by UK farmers however, who fear they will be unable to compete with Australia's vast cattle and sheep stations.

One positive development however is confirmation that imports "will still have to meet the same respective UK and Australian food safety and biosecurity standards as they did before". This means that much-feared hormone injected meat will remain off the menu, for now.

More information on the key aspects of the deal can be read here.

Issa brothers sprint to the finish line in Asda acquisition

In a deal reportedly worth a whopping £6.8B, the CMA has given the all clear for Bellis Acquisition Company 3 Limited (a business run by the billionaire Issa brothers) to buy UK supermarket chain, Asda.

In May this year, the CMA suggested it would accept undertakings from the prospective new owners for the sale of 27 Asda petrol garages to satisfy petrol-pump price concerns in areas where both Asda and EG Group (the forecourt business) operate. Such undertakings have now been provided by Bellis, which is run by the owners of EG Group and backed by TDR Capital. The deal confirms EG Group's (along with TDR's) majority stake in the supermarket, with Walmart retaining a minority share.

In the midst of conflicting reports around Asda's profits (some report a 17% fall during the pandemic, whereas others express a 7.3% increase in sales during the first quarter of 2021), TDR and the Issa brothers have already indicated their plans to increase growth. In a joint statement, they outlined strategies to accelerate Asda's online offering, increase customer convenience and source more local food. Read more