Ferrero has won a court case against Belgian retailer Delhaize for claiming its palm oil-free, Nutella-style spread is healthier and better for the environment than a product with palm oil.
Back in December 2015, Belgian judges had initially ruled in favour of Delhaize but this was contested by the Italian confectionery giant in a Brussels’ Court of Appeal, which pronounced in favour of Ferrero last week.
The ruling itself does not relate to Delhaize's palm oil-free claims themselves, which feature prominently on pack, rather the fact that the marketing campaign accompanying the product said it was healthier and more environmentally friendly because it contained no palm oil.
Upon its victory, Ferrero said in a statement it believes in the importance of giving consumers access to objective and correct information to enable them to make free and informed choices.
“For these reasons, we fully welcome the decision of the Court of Appeal in Brussels regarding the case between Ferrero and the Belgian supermarket chain Delhaize, for the messages used to promote its sweet spread without palm oil," it said.
Ferrero has spoken out in the past against what it says is "an unfair smear campaign" being conducted against palm oil, and in November last year broadcast a television advert in Italy promoting the safety, quality and sustainability of its ingredients, including palm oil.
A spokesperson for Delhaize, owned by Dutch parent company Ahold Delhaize, said it “respects but regrets” the judge's decision.
Under the ruling, which states that Delhaize’s claims were “unverifiable and therefore not objective”, the retailer must immediately stop or risk a €25,0000 fine per infraction, although the Delhaize spokesperson said it had already done so several years ago.
“We do not have to change anything on the packaging or ingredients of the products. The bottom line is this ruling will not have any impact on the customer: the product will stay in our assortment and the packaging rests the same,” the spokesperson added.
The judge also maintained its decision from the 2015 ruling that Delhaize cannot specify the product contains chocolate, although it can continue to use the term ‘choco’ as this is commonly used by the general public.
The legal view: 'You can't just shoot carelessly on palm oil'
Food law expert and managing director of Hylobates Consulting Luca Bucchini said: “The message for those interested in palm oil free claims is to be careful in drafting their advertising material, making sure that there is strong evidence for all of the claims, considering certified palm oil as a possible comparator. Certainly, the case shows that you can't just shoot carelessly on palm oil; marketers need to talk to their technical, regulatory and legal people before releasing a campaign.
“We will see more court cases, but lawyers will advise caution as losing a major case for palm oil users may be more damaging than winning a few. Advice is likely to depend on the details on the ad campaign - if it's centered on saturated fat, for example, it may be more difficult to challenge.”
A popular claim
Delhaize’s choco spread has become a popular product in its private label range over the years, it said, but is the supermarket’s only product that makes a prominent on-pack palm oil-free claim.
However palm oil-free claims across food categories are on the rise.
Earlier this year, Orkla Confectionery & Snacks Sweden announced it has removed palm oil from 98% of its Nordic products since 2008 in a bid to make its portfolio healthier. The cut equates to over 7,000 tons of palm oil and means 1,500 fewer tons of saturated fat in consumers' food.
In any case, Delhaize, which has 6,500 stores worldwide serving 50 million consumers each week, does not expect the ruling to negatively impact its sales.
“On the contrary,” the spokesperson said. “This judging emphasizes the fact that Delhaize has a palm oil-free alternative. We do not think that this will have a negative impact on sales [and] we will continue to develop and launch new and innovative products as an answer to specific needs and concerns of our customers. This is part of our commercial strategy.”
The ruling was welcomed by the Malaysian Palm Oil Council which slammed Delhaize’s claims as “wild and inaccurate allegations” that are “untrue, unjustified, and denigratory”.
It believes that palm oil free labels in general are in breach of Europe’s Food Information to Consumers (FIC) regulation and that such breaches are tolerated by the European Commission “because the no palm oil labels, in common with other European anti-palm oil efforts, benefit European industries”.
The palm oil-free claims put Delhaize in breach of rules over negative claims established by the Roundtable on Sustainable Palm Oil (RSPO) in 2016, and of which Delhaize is a member since 2007.
According to the rules, RSPO members are not allowed to imply that removing palm oil is preferable from a social or environmental sustainability perspective compared to using certified sustainable palm oil, although it has struggled in the past to keep members in check over this.
