Supermarkets Fight for an Inch in Advertising

The Ethics Juri (EJ) of the Advertising Self-Regulation Association (Auto-Regulação Publicitária) has decided yet again about comparative advertising, which has been one of the tactics utilized in the large retailers sector. This sort of practice by large retailers has led to limit crossing by several competitors amongst them and generated some tension in advertising.

On October 18th, it was reported that Lidl had filed a complaint with the Advertising Ethics Jury (EJ) of the Advertising Self-Regulation Association (ARP) against Pingo Doce, for promotional campaigns that would amount to illegal comparative advertising as they presented products that were not absolutely identical in nature and method of manufacture, with a "divergence in their essential characteristics", which would influence the price comparison factor.

Lidl requested that the comparative advertising in the advertising leaflets be declared unlawful for violation of articles 16 and 11 of the Advertising Code and article 15, no. 2 of the ARP Code of Conduct, claiming the advertising at hand was not only deceiving, because of the mentioned above, as it would also be unlawful comparative advertising, namely for being deceiving and for comparing goods that do not respond to the same necessities or have the same purposes.

The Ethics Jury ruled on the differentiation made by Pingo Doce, which would establish a direct comparison between pre-packaged and non-pre-packaged products (turkey steaks) and between fresh aquaculture and aquaculture-only products (sea bream and salmon). Case law of the Court of Justice of the European Union indicates the requirement that the products meet the same needs or serve the same purpose, and this should be interpreted to mean that they must have a sufficient degree of replaceability or interchangeability for the consumer.

The EJ found that "the compared products do indeed meet the same needs and serve the same purpose and are capable of being substituted. In both the specified cases, but also in the others, the fact that the product is pre-packaged or not does not determine different functions and purposes for the product". It further added that "The fact that the products are "sold using different methodologies (bulk/packed), which are inherent to the manufacturing method and respective distribution chain" does not determine a divergence in their essential characteristics and, even in the case of the comparison between "chicken steak" and "chicken strogonoff” accompanied by the disclaimer "At the Pingo Doce butcher's counter, ask to prepare the strogonoff to your liking in the quantity you need", the products are deemed to be replacable, the consumer being able to acquire at the price indicated a product with similar characteristics and absolutely substitutable. " It thus ruled that the comparison made did not show a difference that could appreciably condition the average consumer's choice, as the needs of the consumer are served in equal.

On the other hand, it was also necessary to deliberate on another Pingo Doce campaign, regarding the way in which the type of a "dourada" was advertised. For the same reasons mentioned above, the EJ considered that the applicant's claim should not be upheld.

Finally, a complaint was made that Pingo Doce had advertised the product "tomate rama" at a promotional price of 1.59€/kg in the week before placing the product back on the leaflets, but this time at a price of 1.49€/kg. The comparisons were made based on a live purchase made on 18 August 2022. The EJ understood that Pingo Doce, due to the lack of sufficient evidence to counter what was alleged, revealed "lack of transparency or clarity in the presentation of the price compared characteristic", which could be considered a misleading practice and susceptible of inducing consumer error.

In the end, the EJ decided that the comparative advertisement placed in the terms described was misleading and, as such, would constitute illicit advertising, for non-compliance with the provisions of Article 4(1), Article 5, Article 9(1) and (2)(b), Article 12 and Article 15(2)(a) of the ARP's Code of Conduct and 10 and 11 of the Advertising Code (“Código da Publicidade”).

In conclusion, it is safe to state that the growth of comparative advertising between big market players will automatically raise the amount of litigation and complaints filed by competitors, clearly indicating that the supermarkets in specific are willing to utilize resources of a mile to fight for an inch, and attempting to beat each other in a never ending fight for a position on the top.