Millers in vetkoek fight
Namib Mills wants the High Court to stop Bokomo selling a vetkoek flour mix in packaging that closely resembles its equivalent Bakpro product.
07 December 2018 | Justice
In his founding affidavit before the High Court, Pieter van Niekerk, commercial manager at Namib Mills, sets out the company's argument why the packaging constitutes uncompetitive behaviour by Bokomo Namibia.
He claims that Bokomo intentionally chose the design of its packaging “in order to benefit from the equity of the Namib Mills brand” in Namibia.
Bokomo's majority shareholder is South African giant Pioneer Foods, a listed company that recorded just over R10 billion in revenue in 2017.
Van Niekerk claims that Bokomo has “appropriated a significant element of Namib Mills' get-up [packaging]”. He told the court that Namib Mills is the largest grain-processing company in Namibia, selling maize meal, wheat flour and pasta, and packaged rice and sugar.
“It sells these under its trademark Bakpro and, in particular, the distinctive get-up of these products.” The brand has worked since 1982 for its equity. Packaging plays a very big part in this, he explained.
“This get-up is well known and is relied upon by purchasers in the buying process. It has three constituent characteristics: The top two-thirds is white with the brand Bakpro appearing in the top third, a picture of cake or bread in the middle of the pack, and the bottom third shows a slash or band in a particular colour.
“Apart from the colour brown, for the brown bread wheat flour product, there is no relation to the product in the colours of the slashes adorning the packs.”
Namib Mills, Van Niekerk said, researched the particular mix of bread and cake flour to produce the ideal dough for vetkoek, ensuring minimal absorption of oil during the frying process, and introduced this mix as an “innovative product to the Namibian market”.
The packaging, because it forms part of the Bakpro product range, was packaged in a similar get-up but the colour slash is mustard-yellow.
Van Niekerk said Bokomo's cake and bread flour sales were detrimentally affected after the introduction of the vetkoek mix, which did exceptionally well in the market. At its introduction in January 2018, 42 tonnes were sold and by August, sales had climbed to 880 tonnes.
“What is also relevant is that the new vetkoek flour product cannibalised sales directly from Bokomo's white bread flour. Namib Mills' staff reported that Bokomo was driven to selling stock very close to its expiry date at discounted prices at wholesalers. This is relevant because it is no doubt what prompted Bokomo into introducing vetkoek flour in its unlawful packaging.”
Van Niekerk spoke at length of brand visual equity and a brand's visual assets.
“There are phenomena recognised by marketing experts as being a basis upon which consumers make purchasing decisions, because it is such features which influence their thought processes at the time of purchase. No doubt, this is well appreciated by Bokomo which is why it has adopted the essential elements of Namib Mills' visual assets for its competing product.”
He explained the marketing campaigns that Namib Mills invested in to promote its vetkoek flour.
“It is relevant and material that the marketing strategy has been, and continues to be, to focus on the distinctive mustard-yellow.”
More than N$1.7 million was spent on marketing the brand, he said. In summary, Van Niekerk told the High Court, “The various forms of advertising of the product have compounded the equity that exists in the pack design, but in particular the mustard-yellow colour, as signifying Namib Mills' vetkoek flour”.
He charged that the packaging of Bokomo's other products differs significantly from that of Namib Mills' Bakpro range.
“Comparing them with Namib Mills' product, one will notice how radical the changes are and how the new pack appropriates several features of Namib Mills' pack design architecture.
“I challenge Bokomo to take the court into its confidence and make a full and candid disclosure of all aspects relating to the design of the pack for its vetkoek flour product.
“Namib Mills has reasonable grounds to believe that the design was intentional, in order capitalise on and benefit from Namib Mills' reputation.”
Van Niekerk drew the court's attention to what is referred to as 'category language'. He explained that both Namib Mills and Bokomo, along with others in the market, package brown bread flour with a brown colour scheme while the colour scheme for white bread flour is blue.
“Yet, there is no category known as vetkoek flour.”
According to Van Niekerk, there was no reason for Bokomo's packaging to feature the mustard-yellow colour chosen by Namib Mills.
“Bokomo's doing the same, coupled with its significantly amended pack architecture, can only be explained by an intention to appropriate benefit from the existing reputation vesting the get-up of Namib Mills' vetkoek flour product, or to cause confusion in the market, or both.”
Bokomo, in its response, chose to deal with technicalities.
Replying to Van Niekerk, Hubertus Hamm, CEO of Bokomo Namibia, dealt extensively with the lack of urgency of the application. He accused Namib Mills of causing the delays and added that “any perceived urgency was therefore created by Namib Mills itself”. He told the court that essentially, Bokomo Namibia is not a party to the proceedings as it was incorrectly cited as “Bokomo Foods” in the court papers.
He quoted another High Court matter in which the respondent was incorrectly cited. That application was dismissed with costs due to the incorrect naming of the respondent.
Hamm added that it took Namib Mills two months to complete its founding affidavit, “yet it is of the view that anyone opposing the relief sought should be deprived of proper opportunity to oppose the relief”.
He also denied that “irreparable harm” would be caused, describing it as a “bold allegation with no substantiation whatsoever”.
Before Justice Hosea Angula yesterday, Bokomo did not defend and the parties agreed to bring amendments with the application proceeding before the court on 13 February next year.
Tobias Louw from Theunissen, Louw and Partners appeared for Namib Mills while Daneale Beukes from Engling, Stritter and Partners appeared for Bokomo Namibia.