‘Passing-off – how much of a problem here?
How frequently do publicans attempt to deliberately substitute one brand of alcohol for a cheaper one in order to fatten margins by fooling the customer? To what extent does ‘passing-off’ take place here? No one, it seems, is responsible for closely monitoring the levels of this (mal)practice. Drinks Industry Ireland reports.
Print1 October 2013
A bar in England was recently fined £16,000 for trying to ‘pass-off’ Jagermeister.
Norfolk Trading Standards Officers brought the case against New York, New York in Norwich city centre for selling ‘imitation product’ following an inspection in December 2011, part of a targeted programme of checks at licensed premises in the town.
Owners Deli Delicious Ltd were found guilty of deceiving the public and misusing trademarks on the venue’s promotional material. The bar had been using weaker schnapps in place of ‘Jagermeister Bombs’ which (along with ‘Jagermeister’ and ‘J-Bomb’) are trademarked.
Claims by the owners that the barmaid had put the wrong alcohol in the bottle by mistake were dismissed.
Martin Watts, Managing Director of Jagermeister’s UK distributer Cellar Trends, commented, “Passing-off and pouring over one product for another is a growing concern that not only impacts manufacturers but also damages consumer confidence in the trade”.
Passing-off in Ireland?
So to what extent does passing-off occur here in Ireland and just who’s responsible for monitoring it?
Alas no figures are available. No Government agency appears specifically tasked with monitoring the practice of passing-off of alcoholic beverages. While the National Consumer Agency has powers under the Consumer Protection Act to investigate suspected misleading practices, decisions to investigate an alleged misleading practice are based on a number of factors including the likely scale of detriment experienced by consumers, the nature of the evidence available, previous trader behaviour and the Agency’s ongoing ‘market surveillance’ which relies on consumers informing it of their suspicions regarding passing-off.
In the end, it’s down to brand-owners to take action should they suspect that an inferior brand is being passed-off for their own – but as one supplier pointed out, the consumer’s first port of complaint would most likely be the offending publican who’d naturally deny it.
“If they do make it as far as informing the appropriate supplier or manufacturer, they’ve often drunk the only ‘evidence’ we can go on by then,” explained another.
But taking the UK Jagermeister action as a case in point, Michael Barry of Barry & Fitzwilliam, Jagermeister’s distributors here, claimed, “ There’s definitely an issue in Ireland with other products normally of lower strengths being passed off instead of Jagermeister.
“In our opinion it’s a case for the Legal Metrology Department of the National Standards Authority as they’re tasked with the proper legal measure being dispensed in the on-trade and if a customer orders a shot of Jagermeister 35% herbal liquor and is served a 20% ‘lookey-likey’ version then this is clearly illegal and it’s the job of the Legal Metrology Department to enforce this in the on-trade.”
But the National Standards Authority of Ireland’s Legal Metrology Department failed to respond to enquiries from Drinks Industry Ireland in time for publication of our September issue.
However it did send in a statement subsequently.
"NSAI Legal Metrology operates under and enforce the Metrology Acts 1980 to 1998. Our remit does not extend to the regulation of the quality or composition of products offered for sale but rather to the statutory control of the quantities of pre-packaged goods having measurement declarations, bulk goods sold by measure and of measuring instruments in trade use."
Responsible bodies
One might have thought that the Revenue Commissioners should take an interest in this.
“They’re tasked to collect the excise duties as levied by the state,” pointed out Michael Barry, “The excise duty on a 70cl bottle of Jagermeister is 9.03 whereas the duty on a 20% lookey-likey product is 5.13 therefore the Revenue are being swindled when a Jagermeister is ordered and the customer is given a product which is a ‘lookey-likey’ being passed-off as a Jagermeister.
“It’s no different to a watered-down measure of whiskey or vodka being served which is totally illegal.”
However the Revenue Commissioners take a different view. They told Drinks Industry Ireland, “The Revenue are indeed tasked to collect excise duty.
“The issue therefore referred to appears to relate to a question of representation rather than loss of Revenue”.
Failing to grasp the point, they continued, “Revenue’s core interest relates to ensuring excise duties are not evaded but we are also concerned and address the issue of counterfeit in our enforcement programmes”.
Then there’s the National Consumer Agency which supposedly looks out for the consumer who should report any issue they may have in relation to passing-off to the Director of Consumer Affairs, believes Michael Barry.
But the challenge for any NCA investigation is the availability of substantive evidence that can be used to corroborate the alleged misleading practice. In the case of the passing-off of alcoholic beverage, this evidence can be very difficult to secure, explains the Agency.
“Intellectual property issues also arise when the passing-off of alcoholic beverages occurs and brand owners can seek recourse through the Courts,” it advises.
International dimension
And of course there’s an international dimension to passing-off, especially in regard to the passing-off of Irish products abroad.
Aoife Keane, Senior Executive at the Irish Spirits Association – “Passing-off is something that the industry takes very seriously".
Companies invest millions of €uro in developing their brands and products and it’s unacceptable that rogue operators trade off the goodwill of legitimate brands. Such practices put Irish jobs at risk and damage consumer confidence.
“Ireland is known for high-quality, premium products and this reputation has to be protected. This is particularly true for Irish Whiskey which is now one of the fastest-growing spirits categories in the world. The obvious downside of our popularity is the increased risk of passing-off of inferior product. To help us combat this, we’re in the process of developing technical files to secure the protection of Geographic Indicators for Irish Whiskey and Irish Cream Liqueur.
“Although we already have strong enforcement processes in Ireland from existing legislation, the GIs set out very clear protection for our products globally, with very clear consequences for anyone found to be selling illegitimate product.
“It is hugely important that we protect the integrity of Irish spirits and the ability of the sector to continue its exporting success.”
Conclusion
While passing-off has never been discussed as such in the LVA, Chief Executive Donall O’Keeffe told Drinks Industry Ireland, “Our position would be obvious, I hope”.
Similarly the VFI’s Padraig Cribben responded, “It hasn’t been raised here as an issue. Obviously anything that can damage the legitimate trade is to be condemned in the strongest possible manner”.
So while no figures exist as to how prevalent it is here and no one appears to be responsible for going out into the field and carrying out on-the-spot inspections, the implications of passing-off for the on-trade are best summed up by Michael Barry: “I would suggest that a few bad apples are bringing the on-trade into disrepute and giving the whole trade a bad name with this type of activity”.
And how does he know passing-off is going on?
“We have had major negative feedback on our Jagermeister Facebook page about this issue and in the current environment where messaging is instant we’d strongly urge those who practice passing-off to desist for their own good as they’re underestimating the power of the consumer.”
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