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One of Colombia’s largest food companies has been found to compete unfairly against Danone

 

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Last August, in a decision acknowledged to be the first of its kind in Colombian legal history, the Superintendency of Industry and Commerce (the Colombian Competition Authority) condemned one of the most prominent Colombian food companies, Alpina S.A, for committing unfair competition acts against the French multinational called Danone. The origin of the decision can be traced back to 2009, when Danone filed a suit against Alpina, alleging the latter had incurred in conducts intended to block the French company’s entrance in the Colombian market. After 6 years of deliberations, the Superintendency ruled in Danone’s favor, thereby ordering Alpina to abstain from continuing certain operations, which were considered to be affecting Danone[1].

According to a press release delivered by the Superintendency, it was found that between 2004 and 2007, Alpina conducted business strategies that effectively prevented Danone from competing in Colombia. Such business strategies were identified to be the registration and use of similar and identical trademarks used by Danone in other markets, the adoption of advertising concepts originally created by Danone, and the use of product identification methods initially employed by the French company in other countries. Since Alpina was the first to introduce into the public various products imitating approaches used by its competitor, Danone was not able to deploy effectively its portfolio of trademarks and commercial initiatives in the country[2].

Regarding the unfair competition acts involving trademarks, the Superintendency observed that Alpina registered a total of 20 trademarks, which in some cases were similar and in other cases identical to those used by Danone around the world.  This was understood to be a measure posing an obstacle to Danone for freely using its trademarks to offer products to the Colombian public[3].

The imitation of some of Danone’s advertising concepts was another of the issues analyzed by the Superintendency. Effectively, it was noted that the television advertisement used by Alpina to present its yogurt YOX was not far from similar to the one used by Danone for its yogurt ACTIMEL. As to what concerns product identification methods,  Alpina used expressions such as “DEFENSIS”, “4×4”, “VITALIS”, and “LICUAMIX”, which happened to be the same ones Danone used to identify some of its milk based products[4].

As a result of its findings, the Superintendency concluded Alpina had systematically imitated different Danone’s commercial initiatives, thus incurring in unfair competition[5].  In addition, it was considered that such behavior had prevented Danone from participating in equal terms in the Colombian market. For those reasons, Alpina was ordered to renounce to the trademarks involved in the controversy, to abstain from using advertising and identification methods used by Danone, and to remove from distribution channels all products imitating Danone’s initiatives. Alpina was also condemned to assume litigation costs, which ascended to 200 million Colombian pesos (around $67,000 US dollars)[6].

Although Danone also requested the Superintendency to award damages for 2.000.000.000 Colombian pesos (around $660,000 US dollars), it did not concede such petition, arguing damages were not duly proven. However, Danone’s lawyers announced, they will ask for a revision of this aspect of the ruling[7].

Since Alpina has presented an appeal to the Superior Tribunal of Bogota, seeking a revocation of the Superintendency’s decision, its effects remain suspended until a definite ruling is obtained. For that reason, Alpina is not obliged to fulfill the Superintendency’s orders for the moment[8].  But if the Superintendency’s decision happens to be reaffirmed, its effects will deeply penetrate the Colombian food sector, considering the market share of the two companies parties to the controversy.

[1] SUPERINTENDENCIA DE INDUSTRIA Y COMERCIO. Superindustria declaró judicialmente que ALPINA incurrió en competencia desleal en contra de DANONE. Disponible en: http://www.sic.gov.co/drupal/noticias/superindustria-declaro-judicialmente-que-ALPINA-incurrio-en-competencia-desleal-en-contra-de-DANONE

[2] PORTAFOLIO. SIC sancionó a Alpina por competencia desleal contra Danone. http://www.portafolio.co/negocios/alpina-danone-competencia-desleal

[3] SUPERINTENDENCIA DE INDUSTRIA Y COMERCIO. Op cit.

[4] Ibídem

[5] The systematic imitation of a competitor’s commercial initiatives is considered to be an act of unfair competition under article 14 of law 256 of 1996 of Colombia.

[6] SUPERINTENDENCIA DE INDUSTRIA Y COMERCIO, Op cit.

[7] LA REPÚBLICA. Alpina dará la pelea por Defensis, Alpinino y por 22 marcas más. Disponible en: http://www.larepublica.co/alpina-dar%C3%A1-la-pelea-por-defensis-alpinino-y-por-22-marcas-m%C3%A1s_292356

[8] Ibídem

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