Tesco to pay Aldi €150k over price war

Retail giant Aldi is to receive €150,000 damages and legal costs under a settlement of its action against Tesco over infringement of Aldi trademarks in a Tesco advertising campaign.

Tesco Ireland has also given various undertakings to Aldi, including not to engage in comparative advertising involving use of Aldi’s trademarks in a defined range of circumstances.

It has undertaken not to use or display comparison of product prices without clearly specifying, where applicable, the Bord Bia Quality Assurance mark or other quality assurance schemes recognised in the State.

Other Tesco Ireland undertakings involve not displaying comparison of product prices unless the products meet defined criteria relating to quality, composition, and ingredients.

The undertakings mean Tesco cannot, for example, compare products which are similar but have significantly different ingredients, such as dry dog food and semi-moist/moist dog food. It has also undertaken not to compare prices of entirely different substance such as marmalade and tuna chunks.

Tesco Ireland has also undertaken not to display comparisons of product prices relating to fresh food products such as eggs, meat, and bread without clearly specifying Irish provenance where appropriate.

The retail giants also agreed Aldi will not seek orders for attachment and committal against Tesco Ireland in relation to breach of the undertakings unless any such breach is immediately notified by emails within 24 hours and one of three conditions is met, including the breach being deliberate or made in bad faith.

The settlement was announced by Michael McDowell SC, for Aldi, to Mr Justice Peter Kelly at the Commercial Court yesterday.

Brian O’Moore SC, for Tesco Ireland, said his side was happy with the consensus concerning comparative advertising campaigns and had given undertakings. He also noted the sides had agreed a mechanism relating to alleged breaches of the undertakings.

In an action initiated last May, Aldi alleged a Tesco campaign involved inaccurate, misleading, and unfair comparison of the prices at the two supermarket giants. The use of the Aldi marks in banners displayed in Tesco stores earlier this year was “the final straw” in circumstances where Aldi had been complaining to Tesco of infringement of Aldi marks since 2009, said Aldi director Niall O’Connor.

Aldi alleged Tesco’s pricing campaign failed to compare like with like; had misstated the sale price of the relevant product; and failed to compare the relevant quantity of the product.

For example, Tesco compared the price of mint humbugs sold by it and by Aldi and stated the weight of both bags was 250g, when the weight of the Tesco product was 200g.

Aldi said did not accept Tesco’s position that certain inaccuracies in price comparison did not amount to unfair commercial practices.

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