Who: Sainsbury’s, Mr Justice Wilkie, Tesco
Where: High Court
When: 10 November 2014
Law stated as at: 4 December 2014
What happened:
Sainsbury’s has lost a judicial review in the High Court, in which it claimed that the Independent Reviewer had erred in law when reviewing a decision of the Advertising Standards Authority (“ASA”).
Background
The ASA’s decision in question related to a number of comparative advertisements run by competitor Tesco back in 2013, highlighting the retailer’s “Price Promise” scheme. Sainsbury’s felt that these adverts were misleading, as they drew comparisons between Sainsbury’s and Tesco products that differed in the accreditation they held. Some examples were as follows:
• fish fillets where the Sainsbury’s version displayed Marine Stewardship Council certification, but the Tesco version did not.
• a ready meal chicken korma where the Sainsbury’s version featured British chicken, and the Tesco version featured chicken sourced internationally.
• value ham, the Sainsbury’s version of which contained 100% British pork, the Tesco version of which contained pork from the EU.
Sainsbury’s had also complained that Tesco had run a parallel advertising campaign with the strapline “we are changing”. This discussed changes that Tesco was planning to make to the provenance and sourcing of its ingredients. Sainsbury’s felt that consumers would see this as part of the same campaign as the price promise campaign, and that this would mislead consumers as to what accreditation the compared products in the other campaign currently held.
The ASA had initially rejected Sainsbury’s complaint, on the basis that the foods compared met the same need or intended purpose, as required by rule 3.33 of the BCAP code, which deals with comparisons with identifiable competitors. This reflects the requirements of the EU Unfair Commercial Practices Directive, and of the implementing legislation in England and Wales, the Consumer (Protection from Unfair Trading) Regulations 2008.
Sainsbury’s then escalated the complaint to the ASA’s Independent Reviewer, who reviewed the regulator’s decision but did not find any issues with the ASA’s approach.
Finally, Sainsbury’s sought, and was granted, permission to challenge the Independent Reviewer’s decision in the High Court by way of judicial review.
Mr Justice Wilkie heard the review in October, and handed down his judgment on 10 November 2014.
The Judicial Review
The result was bad news for Sainsbury’s, who lost on all four points they had asked the High Court to review. The judge found that, contrary to Sainsbury’s assertions, the Independent Reviewer had not erred in law when reviewing the ASA’s decision. A high level summary of each point is set out below, grouping together (a) the issue raised to the Independent Reviewer by Sainsburys, (b) the decision of the Independent Reviewer, and (c) the judicial review’s decision.
1. Sufficient interchangeability
(a) Sainsbury’s: When assessing the comparison, the ASA had not correctly applied the “same need or intended purpose” test. CJEU case law in Lidl v Vierson required that products should be “sufficiently interchangeable”. The rise of accreditation schemes clearly demonstrated that consumers were interested in the sourcing of products, and products with and without accreditation were therefore not sufficiently interchangeable.
(b) Independent Reviewer: European law required that the test of sufficient interchangeability was to be applied flexibly, in the most favourable way to permitting comparative ads (unless such ads were anti-competitive, unfair or affecting consumer interests). It was open to the ASA to assess the facts and come to its conclusion.
(c) Judicial Review: The Independent Reviewer’s decision was reasonable.
2. Consumer priorities
(a) Sainsbury’s: When assessing consumer’s priorities in relation to the above test, the ASA had relied too heavily on its own judgment and submissions made by Tesco. It had not, for example, sought expert evidence.
(b) Independent Reviewer: It was not unreasonable for the ASA to rely on evidence presented to it and its own assessments of consumer attitudes to the provenance of ingredients. There was no obligation on the ASA to commission independent research, and it was appropriate for the regulator to exercise its own judgment in non-technical areas.
(c) Judicial Review: The Independent Reviewer was entitled to decide that this was within the range of lawful decisions for ASA to take.
3. Marine Stewardship Council (“MSC”) labelling
(a) Sainsbury’s: One of the comparisons made by Tesco, between its fresh cod and haddock fillets and fresh cod and haddock fillets offered by Sainsbury’s, had been deemed acceptable by the ASA. The fish was sourced from the same MSC accredited fish farms, even though Sainsbury’s had paid a licence to use the MSC accreditation on its product, whereas Tesco had not. Sainsbury’s argued that the “same need or intended purpose test” should be assessed from the point of view of the consumer. As the consumer would not know that the Tesco product was from a MSC accredited source, the products were not interchangeable. The ASA’s decision was therefore substantially flawed.
(b) Independent Reviewer: The ASA council had decided that the cod and haddock fillets were comparable based on the substance of the product (i.e that they were the same species of fish, produced on the same farms in the same way), rather than on the basis of MSC compliance. The decision was therefore not substantially flawed.
(c) Judicial Review: The Independent Reviewer was correct to say that this decision was not substantially flawed (though it would have been flawed if comparability had been assessed on the basis of MSC compliance rather than on substance).
4. Tesco’s parallel “we are changing” ads
(a) Sainsbury’s: The ASA acted unreasonably on the face of it when deciding that the “we are changing” and “price promise” promotions of Tesco would be viewed by audiences as distinct promotions.
(b) Independent Reviewer: This was a matter of fact and degree upon which the ASA was empowered to decide. It was therefore not unreasonable for it to come to the decision it did.
(c) Judicial Review: The Independent Reviewer was entitled to conclude that the ASA’s decision was not unreasonable.
Why this matters:
While comparative advertising remains a high risk area, this set of proceedings is a good reminder that European case law is broadly in favour of facilitating comparative advertising, provided that such advertising is not misleading.
However, this case does not mean that products with differing accreditation may necessarily safely be compared. For example, the law and the advertising codes in the UK establish that any protected origin product may only be compared with products of the same protected origin.
Beyond this it may still be that a product with a certain accreditation may not fairly be compared with a product without such an accreditation, depending on the context. The ASA – which is not bound by its own previous decisions – made a ruling in this case that appeared to be partly influenced by the low-cost nature of a number of the products. This seemed to lead the regulator to consider that the consumer’s priority when applying the “same need or intended purpose” test would be the substance of the product itself rather than the sourcing. It may be that the regulator may have taken a different view if the products in question had been different.
The other point of note in this case is that the writer believes this is the first time a party complaining to the ASA about an advertisement (as opposed to the advertiser whose ad is the subject of a complaint) has sought to judicially review a decision of the Independent Reviewer. Whether this will set a trend remains to be seen.
