Timeo Danaos et dona ferentes...?
Not yet! The UK Court of Appeal has recently held that if yoghurt described in the UK as Greek has not been made in Greece, then it has been misrepresented.
This has arisen out a passing-off case brought by Fage, who for 90 years have been producing yoghurt in Greece and for thirty years have sold it in the UK labelled as “Greek yoghurt”. Greek yoghurt has always had a thicker and creamier texture than other yoghurts, resulting from a straining or concentration step during its manufacture. There are other companies who also sell yoghurt labelled as “Greek yoghurt” in the UK, but this is also made in Greece. Some companies also sell a “Greek-style yoghurt”, with a thicker texture, but this is as a result of the addition of thickening agents and it is not made in Greece.
Fage brought the case against Chobani, a US company active in the US yoghurt market. Fage and Chobani are competitors in the USA. In 2012 Chobani introduced a yoghurt into the UK labelled as “Greek yoghurt”. This also had a thicker texture following concentration but had been made in the USA. Chobani had sought and been given advice beforehand about the UK market and had clearly been warned that to describe yoghurt in the UK as Greek yoghurt would convey the meaning that it was made in Greece. One reason for this was a labelling convention in the UK stating:
“"The term 'Greek yoghurt' applied to traditional yoghurt produced in Greece which had been strained to remove the whey, giving a consistency between that of yoghurt and cheese. The (Yoghurt and Short Life Dairy Products) Committee believed that consumers perceived 'Greek style' to refer to yoghurt with a thicker consistency but not necessarily as a result of straining'."
This advice Chobani chose to ignore. At the first instance trial, and in the light of a lot of evidence, the judge decided on the facts that a sufficiently substantial proportion of the relevant public thought that “Greek yoghurt” was special. On the legal issue it was clear that as Fage produced 95% of the yoghurt in the UK labelled as Greek, it shared in the goodwill attached to this label and would inevitably be damaged by the misrepresentation. He found for Fage.
On appeal, Chobani argued that the expression was descriptive of a whole range of different kinds of product and that the Court should have examined with great care any claim by a trader to protect any single one of them. To this were added new arguments regarding the free movement of goods within the EU, and arguments regarding the subjective nature of terms such as ‘thick’ and ‘creamy’ such that the term “Greek yoghurt” had an insufficiently clear meaning amongst consumers. There was also a request to add a new ground in relation to the effects of what are known in the EU as geographical indications and designations of origin.
In a lengthy judgement, in which reference was made to numerous significant earlier decisions, the Court of Appeal dismissed the appeal. Two of the three judges gave reasoned judgements and in their view, they agreed with the trial judge that evidence had shown that a substantial proportion of the relevant public believed that “Greek yoghurt” came from Greece and was in some way different. This was based on the witness evidence, the current labelling convention, the premium price at which Greek yoghurt was sold and the advice given to Chobani before they commenced their UK marketing.
Of the issues relating to the EU points, that relating to the free movement of goods was dismissed on the basis that it was not the subject of any evidence or hearing in the lower Court and therefore unsuitable for full discussion on appeal.
On the point regarding EU Regulations relating to geographical denominations, the judges essentially refused permission to add the new ground but in doing so decided that “Greek yoghurt” would not fall under the Regulation in any event, so that it would not apply.
The case did hinge on what the UK public perception of “Greek yoghurt” was. Not every national description of a product or service will inevitably lead the public to believing it to be made or provided only there. “French dressing” or “Thai massage”, for example, are terms generic in the UK as describing particular types of product or service sold by many different people. As one of the judges put it:
“It is, I think, obvious that a descriptive word like "Greek" must take meaning from its context. If I say that I am going to a Greek restaurant, no one would expect me to buy air tickets to Athens before I could enjoy my meal. On the other hand, if I say that I have bought a bottle of Greek olive oil, I suspect that most people would understand that it came from Greece.”
The evidence in the case did show a majority perception in the UK that there was something special about Greek yoghurt and that it was sourced from Greece. Use by others of the term “Greek-style yoghurt” reinforces the distinction. The case has parallels with the “Swiss chocolate” case where, at the date on which Cadbury put their Swiss Chalet chocolate product (not made in Switzerland) on the market, the words "Swiss chocolate" were taken by a significant section of the public in England only to mean chocolate made in Switzerland. Cases such as this always depend on individual circumstances and in other jurisdictions, different principles will apply. This is a situation occasioned by the situation in the UK. Both Fage and Chobani sell thickened yoghurt in the USA under the label “Greek yoghurt”, but both are made in the USA where the position is different.
It is believed that Chobani plan to appeal to the UK Supreme Court, so this may not be the last word, but for the present, if it says it’s Greek, it must be.
Chris Pett, Consultant
First published in Food Bev, February 2014