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Finnish Market Court Fines Finnish Bakery Federation for Unlawful Price Recommendations

On 29 February 2016, the Finnish Market Court ("Market Court") imposed a fine of EUR 15,000 on the Finnish Bakery Federation for unlawful price recommendations. The Finnish Bakery Federation is an association of Finnish bakery employers, representing their professional and economic interests. The member companies of the Finnish Bakery Federation are mainly bakery owners. In June 2015, the Finnish Competition and Consumer Authority ("FCCA") submitted a proposal to the Market Court requesting that a EUR 55,000 fine be imposed on the Finnish Bakery Federation for unlawful price recommendations. According to the FCCA, the Finnish Bakery Federation had published unlawful price recommendations in its press releases, letters to members and editorials in the "Leipuri" bakery trade magazine.

In its decision (MAO:121/16), the Market Court first confirmed that the Finnish Bakery Federation is an association of undertakings and its price recommendations thus constituted a decision of an association of undertakings within the meaning of the Act on Restraints of Competition (repealed by the Competition Act in 2011). In addition, the Market Court confirmed the FCCA's findings and ruled that the Finnish Bakery Federation had published unlawful price recommendations in its press releases, letters to members and editorials in the "Leipuri" bakery trade magazine during 2007–2010. According to the Market Court, these price recommendations by their very nature had the potential to restrict competition, i.e., they constituted a restriction of competition by object. Concerning the amount of the fine, the Market Court found that, taking into account the nature, extent and duration of the infringement, a fine of EUR 15,000 should be imposed on the Finnish Bakery Federation. The FCCA has appealed the decision, in particular the amount of the fine, to the Supreme Administrative Court.

The Swedish Market Court Prohibits Certain Marketing of Spreadable Fats on the Basis of the Regulation (EC) No 1308/2013

Unilever Sverige AB and Unilever BCS Sweden AB (together "Unilever") had made a complaint to the Swedish Market Court (the "Market Court") against certain marketing conducted by Arla Foods AB ("Arla") in relation to the product Bregott Gourmet (the "Product"). The marketing in question had been presented on the websites arla.se and youtube.se where Arla had used the statements "a new butter" and "a little nicer butter" as descriptions for the Product. In its judgement (MD 2016:6) the Market Court found that the statements constituted misleading and unfair marketing as the Product did not fulfil the requirements set out for products that may be marketed as "butter" in accordance with the Regulation (EC) No 1308/2013 establishing a common market organization of the markets in agricultural products (the "Regulation").

The marketing in question had been visible on the mentioned websites between 21 May and 1 June 2015. In the Market Court Arla admitted that the marketing was misleading and unfair. According to Arla, the marketing was removed on its own accord when it realized that it was not compliant with the Regulation.

In its judgement the Market Court stated that according to the Regulation the term "butter" is reserved for products with a milk-fat content between 80 % and 90 %. Since the Product had an 80 % fat content that consisted of a mixture of vegetable oils as well as butter, the Product was not considered to fulfil the requirements for butter as set out in the Regulation. The marketing was found to give an average consumer the impression that the Product was a butter, when it in fact was not. Thus, the statements that had been used in the marketing were found to be misleading and unfair, and the Market Court forbid Arla from making statements claiming that the Product was a butter.

The EGC: The Coca-Cola Bottle Cannot be Registered as a Community Trademark

The European General Court ("EGC") ruled in its judgment T-411/11 of 24 February 2016 that the Coca-Cola bottle was not distinctive enough to be registered as a community trademark. The dispute began in 2011 when The Coca-Cola Company applied for a community trademark at the Office for Harmonisation in the Internal Market ("OHIM"). OHIM dismissed the application on the grounds that the mark lacked distinctive character under Article 7(1)(b) of Regulation No 207/2009 (the Community Trademark Regulation). The Coca-Cola Company appealed before the Second Board of Appeal of the OHIM claiming firstly that the relevant public would associate the bottle with the applicant's famous iconic bottle and that the new bottle should be regarded an evolution of it. Secondly, the applicant claimed that the bottle had acquired distinctive character through use. The Second Board of Appeal dismissed both claims.

The Coca-Cola Company then brought an action against the decision before the EGC. According to the applicant, OHIM failed to consider the mark as a whole. The applicant also claimed that the market for the beverages sector is competitive and even though bottles may be functional, many bottle shapes are designed to stand out from the crowd. The EGC dismissed the claims as unfounded and stated that the mark was a mere variant of the shape and packaging of the goods concerned. The EGC also found that the competitive circumstances of the sector do not suffice to render the mark distinctive.

Secondly, the applicant claimed that the mark had acquired distinctive character through use. The EGC found that the applicant had failed to establish that the sign had acquired distinctive character through use throughout the EU, because the evidence was insufficient and unconvincing. The EGC concluded that the presented surveys could not prove that the mark had acquired distinctive character through use, because the surveys were conducted in only 10 EU Member States even though there were 27 Member States at the time. The EGC also noted that the figures provided on the advertising investments did not specifically relate to the mark.

In Brief

Ruokakesko Oy Granted a Conditional Permission to Acquire Suomen Lähikauppa Oy

On 11 April 2016, the Finnish Competition and Consumer Authority ("FCCA") gave a conditional approval to Ruokakesko Oy's ("Kesko") acquisition of Suomen Lähikauppa Oy. The investigation launched by FCCA into the effects of the acquisition earlier this year indicated that it would lead to further concentration of the Finnish food retail industry by combining two food retail operators, Kesko with a 32.7 percent and Suomen Lähikauppa with a 6.4 percent market share, and further affect the competition in wholesale trade.

Under the conditions imposed by the FCCA, Kesko is obligated to continue purchases from Suomen Lähikauppa Oy's logistics partner Tuko Logistics Cooperative for a limited period of time and to divest 60 of Suomen Lähikauppa Oy's stores to its competitors. However, the potential failure of the divestment will not prevent the merger as the FCCA acknowledged the difficulty of finding suitable buyers and also the fact that Suomen Lähikauppa Oy would inevitably have exited the market in the near future regardless of the acquisition.

The New Origin Marking "FRÅN SVERIGE" is Launched

The new origin marking "FRÅN SVERIGE", mentioned in our previous Food Industry Review, was launched on 20 April 2016 and the marking is now found on products in stores. The new voluntary marking is supposed to make it easier for consumers to choose products with a Swedish origin. For meat, the mark will look similar but be named "KÖTT FRÅN SVERIGE". The old marking "Svenskt Kött" will be faded out and replaced by the new marking during this year. Any company currently using the old marking will have to apply to Svenskmärkning AB to be granted the new marking. More information on how to apply for the marking can be found on fransverige.se.