COURT OF THE FIRST INSTANCE UPHELD THE DECISION OF THE AMCU ABOUT DISTRIBUTION OF THE DESIGNATION “GOST” ON TOMATO SAUCE

In July, the Dnipropetrovsk regional department of the Antimonopoly Committee of Ukraine recognized the violation of legislation on protection of the economic competition at the market of producing and realizing of tomato sauces by TOV ASS (Shyrokine, Dnipropetovsk Oblast) in the form of the dissemination of the misleading information and fined the company 68 ths. hryvnas.

The violation was in the dissemination of the information “GOST”, “GOSTyuha” and rhomboid emblem with the designation “gost” on the of krasnodar tomato sauce, though it was produced according to the technic specifications.

The company didn’t agree with the department’s decision and appealed it in a judicial proceeding.

By the decision of the Economic Court of Dnipropetrovsk Oblast the stated claims of TOV ASS were totally dismissed on 7th November 2016.

Subsequent to the results of the investigation of the product “Krasnodar tomato sauce” of company ASS, the Dnipropetrovsk regional department of the AMCU established that the front label of the company’s production contains the information in the form of the designation “GOST”, “GOSTyuha” and rhomboid emblem with the designation “gost”,5698in which is inscribed image of the inverted letter “K”,

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which has visual similarities with the “Quality mark”, which was in use during the soviet union.

Taking into account the differences in the composition of Krasnodar tomato sauce, which was produced in Soviet times according to GOST 17471-83 “Tomato sauce. Technical specifications” and sauce of TOV ASS, which is produced according to company’s technical specifications TU U 15.8-30260000-004:2010 “Canned food. Tomato sauce “Pomidora”” (amended), in particular:

sauce of TOV ASS contains a thickener – modified corn starch, preservatives potassium sorbate, sodium benzoate (which were not provided by GOST 17471-83 “Tomato sauces. Technical specifications”);

to the sauce of TOV ASS stabilizers tomato powder, syrup and maltose syrup, potato fiber are added (which is also not provided by GOST 17471-83 “Tomato sauces. Technical specifications”) –

the court agreed with the conclusions of the regional department of the AMCU that, when the company introduced to the stream of commerce and started realize the production the label of which contain the information in the form of designation “GOST” and rhomboid emblem with the designation “GOSTyuha”, while the production is produced according to TU U 15.8-30260000-004:2010 “Canned food. Tomato sauce “Pomidora””, it disseminated inaccurate properties of the products, which could effect consumer’s intent to purchase company’s goods.

The product “Krasnodar tomato sauce” of company ASS is a different type of product than the one that was provided by GOST.

The survey conducted by the AMCU has confirmed the conclusions about the misinforming of the customers of TOV ASS. Thus, more than 70% of respondents believe that the products produced according to “GOST”, “DSTU” have a higher quality and contain more stringent requirements for materials and production technology than products made by TU. 100% of surveyed consumers believe that the information disseminated on the label of sauce “GOST”, “GOSTyuha”, which is located on the front label of the product “Krasnodar tomato sauce” produced by TIV ASS, while it is produced according to the TU, may mislead them.

With that, TOV ASS conducted its survey with the same questions as the Dnipropetrovsk regional department of the AMCU, and provided the results to the court. Thus, from the 66 surveyed customers only 11 (17%) consider misinforming by placing label “GOST” or/and “GOSTyuha” and/or rhomboid emblem with the inscription on the label of products possible.

The court haven’t taken into account the information provided by TOV ASS, and also the statement that the case papers don’t contain information about the month of the survey and the sample of the product, which was provided for studying. Thus, on each questionnaire provided by the regional department of the AMCU the consumers stated the place of the survey, and each consumer was given with a sample of the label of the production of TOV ASS for studying.

The defendant TOV ASS also didn’t agree with the information of the regional department of the AMCU about the survey of competitors, which showed that the placement of the labels is unlawful and may be perceived by consumers as an indication that such products are produced according to “GOST” and its consumer properties other, for example, higher than the competitor’s analogues at the market of production and realization of tomato sauces, which don’t use such labels,

and provided the court with the written explanation indicating that in their responses TOV Torhovyi Dim Pan Sous considers the actions of TOV ASS as the dissemination of misinforming information only in the case id these labels aren’t registered trade marks for products and services, PrAT Chumak stated that they doesn’t consider actions of TOV ASS as the dissemination of misinforming information, TOV Tomatpron and TOV Cannery Dar Bessarabii also express the thought that the labels “GOST”, “GOSTyuha” and rhomboid emblem with the designation “gost” is not the information that can mislead the consumers.

The court agreed with the findings of the AMCU that the actions of TOV ASS including the dissemination on the label of products information in the form of descriptions “GOST”, “GOSTyuha” and rhomboid emblem with the designation “gost”, while the product is produced according to TU U 15.8-30260000-004:2010 “Canned food. Tomato sauce “Pomidora”” and thus the dissemination of inaccurate properties of the product in such a way, is a violation of legislation on protection against the unfair competition.

The Court agreed with the findings of the AMCU that the consumer, basing on the misleading information, may prefer goods of a particular entity and competitors, who compete in good faith, will lose their customers because of consumer’s confusion. By the dissemination of the misinforming information may gain advantage in competition not through their achievements, but thought the misinforming the consumers. Not every average consumer pays attention to labels printed in small type, but pays more attention to the information shown on the front face of the label.

So! the dissemination of such descriptions as “DSTU” “GOST” and / or rhomboid emblem with the word “gost” on the labels of products, while the goods are produced in accordance with the technical specifications of your company, would be a violation of legislation on protection against the unfair competition.

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