Pick n Pay takes another thumping from Checkers

Pick n Pay has been interdicted by the High Court in Cape Town from passing off its Crafted Collection products as those of the Shoprite Checkers Forage and Feast brand.

Deputy Judge President Patricia Goliath also interdicted and restrained Pick n Pay from using infringing get-ups or any other get-up that is confusingly or deceptively similar to the get-up used for the Forage and Feast range of products.

Checkers gains market share against Pick n Pay

The win by Checkers comes as the upper market retail brand of Shoprite Group is gaining market share against Pick n Pay, Woolworths and other food retailers. Its Sixty60 on-demand delivery service is also the market leader among omni-channel retailers.

Goliath further ordered:

• Pick n Pay, in the presence of an authorised agent of Shoprite Checkers, to destroy all printed materials, product packaging and the like bearing the infringing get-ups, which are under its control, or alternatively to deliver all such material to Shoprite Checkers for destruction.
• That an inquiry be held to determine the amount of any damages to be awarded to Shoprite Checkers as a result of the sale by Pick n Pay of its Craft Collection products under the infringing get-ups and Pick n Pay to pay the amount found to be due to Shoprite Checkers.

Pick n Pay said it is disappointed with the ruling and will seek leave to appeal the judgment.

“Our intention is never to mislead customers, and we do not believe we have done so. We are proud of our Crafted Collection range, which gives customers great quality, value and innovation.”

Comment was also requested from Shoprite Checkers, but a response has not yet been received.

Arguments

Shoprite Checkers alleged that Pick n Pay is infringing on its common law rights in the form of goodwill and reputation associated with its Forage and Feast range through its manufacturing and/or offering for sale of its competing Crafted Collection range of products.

Pick n Pay rejected the alleged infringements and claimed its products, while in competition with those of Shoprite Checkers, do not in any way create consumer or public misrepresentation to the detriment of Shoprite Checkers.

Pick n Pay further claimed Shoprite Checkers was merely seeking to stifle competition and consolidate and strengthen its monopoly in the market.

Shoprite Checkers launched and unveiled its Forage and Feast range in November 2020 as a new premium luxury range of products.

It said the range is available for purchase at Checkers and Checkers Hyper outlets nationally and has generated nationwide sales in excess of R180 million.

Shoprite Checkers further claimed its outlets sell about 2.56 million Forage and Feast products annually and since its launch, the range has undergone development in over 34 distinct product categories, with plans to further expand its offerings by including an additional 100 products.

It said the products are advertised and promoted nationally through multiple print and digital platforms and close to R60 million was invested in advertising expenditure, with the range endorsed by South Africa’s world-renowned and esteemed chef, Jan Hendrik van der Westhuizen, who was awarded the prestigious Michelin star.

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Pick n Pay move towards ‘foodie brand’

Pick n Pay historically sold a range referred to under the name “Finest” between 2012 until 2016, with this range subsequently terminated and replaced by the “Promise” range, which is presently available for purchase at Pick n Pay stores.

It decided in 2021 to introduce a new premium, exclusive range of products for its core upper customer, with the primary objective of establishing a new premium, exclusive “foodie brand” across multiple categories.

Pick n Pay briefed Daymon Design and Branding to conceptualise the brand name, brand logo, packaging and “look and feel” across all categories during which premium brand design packaging was identified as including strong colours, fonts, textures, packaging, print finishing, imagery or illustrations and white space.

This research revealed that the colour palette for premium brands has shifted away from black and consequently, an exploration of different colour palate options resulted in the identification of golds, greys, blues and champagne as preferred colour options.

Pick n Pay said it had for decades made use of navy blue in its logo and advertising.

It added that there existed a market trend of blue for premium products, adding it has historically used navy blue in the logos of its clothing brand, delivery App, Smart Shopper Cards, and shopping bags.

It therefore selected the colour blue and ultimately adopted “Crafted Collection” as its brand name, with the logo on the range initially depicted in gold, but the packaging was revised and the colour altered to white.

Shoprite Checkers claimed the colour combination of navy, blue and gold on Pick n Pay’s range is used in similar proportions to that applied in its products.

It said the fact Pick n Pay had a historical connection with the colour blue does not provide a legitimate justification for the adoption of product packaging or labelling for a cross-category range of products that imitate that of a competitor.

Judge Goliath said it cannot be disputed that the Forage and Feast get-up had developed into a distinguishable and reputable brand in the market, with the evidence clearly showing that Shoprite Checkers has established significant goodwill and a valued reputation over many years following the launch of the range.

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Inferred meaning

She said the reputation of the Forage and Feast range may be inferred from its extensive sales and marketing efforts and the range accordingly evolved into a reputable brand comprising of substantial goodwill.

Goliath said both product lines are competing ranges in the same premium and luxury consumable market.

“A cursory look at the respective products reveals that the visual similarities between the get-ups are remarkable. The colour combination of navy blue and gold is being used in similar proportions. The packaging and bottling of the products are identical.

“The artistic layout of the products is also remarkably similar.

“Both products labels display the dominant use of the navy background, the use of white and gold fonts in the descriptors, and the suspiciously similar placement of the images of the ingredients,” she said.

Judge Goliath said the competing products are confusingly similar and are sold exclusively at both retail outlets.

“The products are also marketed and displayed in a similar manner. As a result, confusion or deception is likely to arise among customers should the same or similar goods be sold in the market place, whether adjacent to one another or displayed on different shelves.

“It is highly probable that consumers will perceive both products as coming from the identical manufacturer,” she added.

“It can therefore not be contended that the consumer will be able to clearly discern that the source of the Forage and Feast product is Checkers, and the Crafted Collection is Pick n Pay.”

‘Calculated imitation’

Goliath said the fact the Forage and Feast range formed part of the research and benchmarking process in conceptualising the Crafted Collection range “incontrovertibly points in one direction, namely that the Crafted Collection range could not have been conceptualised based purely on market trends, but appears to be a calculated imitation”.

“Furthermore, the fact that Daymon listed the Forage and Feast range as one of the ‘benchmarks’ can only mean that it and its packaging is perceived as enjoying an established existing reputation in the market and was used in designing the Pick n Pay get-up.

“As a consequence, the respondent’s behaviour concerning the replication of the applicant’s approach for products targeting the same target markets constitutes a misrepresentation that is likely to detrimentally affect the applicant’s reputation and goodwill,” she said.

Goliath said Shoprite Checkers’ apprehension regarding the diversion of custom to Pick n Pay is warranted as consumers are likely to mistake the two product lines for horses from the same stable, with the sole distinction being the retailer from which they purchase the merchandise.

“The infringement of the applicant’s common law rights is of an ongoing nature and the respondent [Pick n Pay] is currently passing off its goods as being connected and associated with applicant’s [Shoprite Checkers] goods on a daily basis.

“This will undoubtedly impact negatively on the sales and promotion of the Forage and Feast range of products,” she said.

This article was republished from Moneyweb. Read the original here.