One of the largest retail chains in the Czech Republic, Kaufland, has lost its appeal before the Regional Court in Ostrava in relation to designation of foreign products with Czech flags.
The case started in 2012, when the Czech Agriculture and Food Inspection Authority ("FIA") initiated proceedings against Kaufland because the retail chain was using the small Czech national flags on boards saying "Fresh products from the Czech Republic" in relation to foreign products (mainly fruits and vegetables). Only the containers/pallets contained information about true origin of the products. According to the FIA, Kaufland was not only misleading the customers about origin of the products, moreover, Kaufland was intentionally deceiving customers and trying to take advantage of the current trend whereby Czech customers had a new preference for Czech products. Accordingly, Kaufland was fined CZK 400,000 (approx. € 14,815).
Kaufland appealed to the Regional Court on the basis that the incorrect information on the boards placed under the products was accidental. However, the FIA's decision was upheld and the Court commented that the information boards and flags were visually dominant in comparison to the small labels on the containers and pallets and held that Kaufland's actions could not be considered as pure negligence. The Court also referred to the opinion of the Supreme Administrative Court from 2014 which states that consumers focus their attention on the origin of fruits and vegetables and therefore the information on boards placed right under the products is decisive. If these information boards are incorrect, the consumers are misled and their ability to choose the products according to their preferences is reduced. As the information boards were visually dominant, they attracted the attention of the consumers and gave them the first information about products. The consumers are not obliged to verify the correctness of the information boards or to make any further investigations about origin of products.
Food Act Amendments
In connection with the above case, we would like to mention that the Ministry of Agriculture have proposed an amendment to the Food Act prohibiting the use of misleading logos and titles for products that do not come from the Czech Republic. Any product with a Logo containing the Czech flag and the title "Czech food" or just the wording "Czech food" or "Czech quality" should be used only when the foodstuff is produced in the Czech Republic and it is made from 100% Czech ingredients. This label may also be used if the foodstuff contains at least 75% of ingredients originally from the Czech Republic and the essential part of the production takes place in the Czech Republic. If approved by legislators, the amendment is expected to be in force mid-2016.