Tesco to pay Aldi over price comparison

Retail giant Aldi will get €150,000 damages and its legal costs under a settlement of its action against Tesco Ireland. The German retailer had alleged infringement of its trademarks in a misleading Tesco in-store price 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.

The undertakings mean Tesco cannot, for example, compare two products which are similar but have significantly different ingredients such as dry dogfood and semi-moist/moist dogfood.

It has also undertaken not to compare prices of entirely different substances 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 two retail giants also agreed that Aldi would not seek orders for attachment and committal against Tesco Ireland in relation to any breach of the undertakings unless any such breach was immediately notified by emails within 24 hours and one of three conditions met, including that the breach was 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. Counsel noted there was an agreed mechanism between the sides (relating to alleged breaches of the undertakings).

In its action, initiated last May, Aldi alleged the Tesco campaign involved inaccurate, misleading and unfair comparison of the prices of products sold by the two supermarkets.

The use of the Aldi brandmarks 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, Aldi director Niall O’Connor said in an affidavit.

Aldi complaints

Aldi alleged Tesco, in its pricing campaign, failed to compare like with like, misstated the sale price of the relevant Aldi or Tesco product, and failed to compare the relevant quantity of the Tesco product with an equivalent quantity of Ali product.

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

Aldi Ireland had been writing to Tesco Ireland about the issue since May 2009 and did not accept Tesco’s position over inaccuracies.