“Caramel” product containing only caramel flavoring in breach of competition law

News  >  “Caramel” product containing only caramel flavoring in breach of competition law

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A product labeled as caramel pudding must in fact contain caramel. Flavoring agents won’t cut it, says Munich’s regional court, the Landgericht (LG) München (case ref.: 33 O 13261/21).

If something appears on the outer packaging, it should also be present in the product itself. The absence of a named substance is a violation of competition law. If a product’s name gives the impression that it contains a certain ingredient, then in must in fact contain said ingredient. Otherwise, this may mislead consumers and amount to unfair advertising, explains commercial law firm MTR Legal Rechtsanwälte.

And misleading advertising is exactly what the LG München identified in a ruling from October 11, 2022. The defendant, a food producer, had introduced a pudding featuring the product name “Caramel Pudding” to supermarket shelves, even though the pudding contained no caramel whatsoever, with the caramel taste coming from a flavoring agent. Printed next to the product name were three asterisks intended as a reference to the list of ingredients.

This presentation was deemed by one competition association to be a form of unlawful advertising. It argued that consumers would expect a product labeled in this way to contain actual caramel; caramel flavoring was not enough. Not that it was even designated as such in the list of ingredients, where it was simply referred to as “flavoring”.

The claim was successful before the LG München, which determined that this constituted an anticompetitive violation of Art. 7(2) of Regulation (EU) No 1169/2011 on the provision of food information to consumers. The food producer’s defense that the words “no added sugar” were prominently positioned on the packaging, and that it was therefore clear that the product could not possibly contain caramel, was not accepted by the Court, which held that this information would lead consumers to believe that no extra sugar had been added to the product.

The Court also ruled that the use of asterisks did not address the problem, as a reference cue consisting of three stars would not be perceived by consumers as pointing to further information but instead as an indication that the product is of a high quality.

The ruling is consistent with the case law of Germany’s highest civil court – the Bundesgerichtshof (BGH) – which delivered a similar judgment in connection with a product that contained raspberry-vanilla flavoring. If a product’s presentation suggests to consumers that it contains a specific ingredient, then this needs to be reflected in the product’s composition.

Lawyers versed in antitrust and competition law at MTR Legal Rechtsanwälte can provide counsel.

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