11/08/2014
On 28 January 2014 the Court of Appeal upheld a decision of the High Court, ruling that a US-based company should not be able to label their imported yoghurt as “Greek”.
“Greek yoghurt” has become increasingly popular in the UK and elsewhere, with perceived health benefits compared with “ordinary” yoghurts. In the process of making “Greek yoghurt” the whey is strained off, making the yoghurt thicker and more creamy. This also means that “Greek yoghurt” contains less sugar, fewer carbohydrates and more protein than other yoghurts.
But must strained yoghurt also have a connection with Greece in order to be “Greek yoghurt”?
FAGE, a Greek dairy company, would certainly argue that it must.
FAGE has been selling yoghurt in the UK through its UK distributors since the 1980s and has achieved a 95% share of the UK market in “Greek yoghurt”. Labels for FAGE’s “Total” brand of yoghurt prominently include the description: “Greek strained yogurt”.
Until 2012, virtually all yoghurts sold in the UK under the description “Greek yoghurt” were strained, and were also made in Greece. Greater quantities of thick and creamy yoghurt were sold in the UK under the description “Greek-style yogurt” – none of these originated from Greece and their texture was generally the result of thickening agents rather than straining.
Then in 2012, US company and FAGE rival Chobani entered the market in the UK with their own brand of “Greek yoghurt”. Chobani’s yogurt was made using the straining process but it was made in the US, not in Greece.
In the US, FAGE had already lost out heavily to Chobani. Although FAGE entered the US market some 9 years before Chobani, within a few years Chobani had built up a much greater market share, becoming the top seller of “Greek yoghurt” in the US.
FAGE acted quickly to try to prevent the same thing happening in the UK, and brought an action for an extended form of passing off in respect of Chobani’s use of the description “Greek yoghurt”.
The law of passing off has been extended in cases such as “Bollinger v Costa Brava Wine ([1960] RPC 16])” (the “Spanish champagne” case) beyond the protection of the products or business of a particular trader. Extended passing off allows for the protection of defined classes of products which are associated with a particular word or name which (1) has recognisable and distinctive qualities and (2) adds value to the products.
FAGE maintained that thick and creamy yoghurt was properly labelled “Greek yoghurt” only if it was thickened by straining and came from Greece. FAGE maintained that this was what the yoghurt-buying public in the UK understood by this label, meaning that use of the same phrase to describe yoghurt which did not fulfil both requirements would be misleading.
Chobani argued that the description “Greek yoghurt” was understood to define a type of yoghurt by reference only to its mode of manufacture, not to its place of origin.
After hearing survey evidence from consumers, the High Court agreed with FAGE’s claims and issued an injunction. Chobani appealed, but the Court of Appeal has now upheld the High Court’s decision.
Critical to the decisions of both the High Court and the Court of Appeal was evidence that, prior to Chobani’s entrance into the UK market, the industry-wide convention in the UK was only to apply the description “Greek yoghurt” to strained yoghurt of Greek origin, with other similar products being labelled “Greek-style yoghurt”. This convention appears to have resulted in a particular perception of the term “Greek yoghurt” by UK customers which may be unique to the UK market. In the US, at any rate, it appears that there is no similar distinction made between “Greek yoghurt” and “Greek-style yoghurt”.
A Final Serving Of Yoghurt Leaves Chobani Feeling Strained
As discussed above, in January 2014 the Court of Appeal upheld the decision of the High Court granting FAGE a permanent injunction to stop rival yoghurt-maker Chobani from selling its US-made yoghurt in the UK under the description “Greek yoghurt” and awarding costs against Chobani.
Chobani applied to the Supreme Court for leave to appeal against this decision. This application has now been refused. According to the panel, consisting of Lord Neuberger, Lord Reed and Lord Clarke, there was no arguable point of law to consider in the appeal.
The Supreme Court decision finalises the Court of Appeal’s ruling that in the UK yoghurt may only legally be described as “Greek” if it was made in Greece by a straining method to remove all the “watery whey” and contains no additives or preservatives. Yoghurt made elsewhere using this method (such as Chobani’s US-made yoghurt) may be described as “Greek-style”.
The Supreme Court ordered Chobani to pay FAGE’s costs in the Supreme Court, plus the remaining instalment of costs from the Court of Appeal order.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking before any action in reliance on it.
