Talking Shop September 2020
Written By
Partner
UK
I'm the global head of our International Retail & Consumer sector group. As a partner in our international Commercial group in London, I work primarily with retail & consumer focussed businesses on their domestic and international growth and expansion strategies.
Welcome to the September 2020 edition of our Retail & Consumer monthly news round-up
This newsletter focuses on key news and updates for retail and consumer-facing businesses around the world, including our latest briefings on the COVID-19 pandemic and its impact on the sector. You can find all our COVID-19-related updates for retail and consumer businesses on our dedicated In Focus page here.
At the end of the newsletter, you can find details of our recent news and events, which we think might be of interest to you and your team.
Please get in touch, or visit our webpage for more information about Bird & Bird's Retail & Consumer Group.
In this newsletter:
- Regulatory
- Advertising & Marketing
- Case Update
- Competition & Consumer
- Diversity & Inclusion
- Franchising
- HR Services
- Intellectual Property
- News & Events
Regulatory
Australia & New Zealand: Tick tock...the countdown begins to implement pregnancy warning labels on packaged alcohol
Further to our earlier article on proposed changes to the regime, Food Standards Australia New Zealand (FSANZ), the regulator responsible for developing food standards for Australia and New Zealand, has announced a three year transition period for mandatory pregnancy warning labels to appear on alcohol.
Read more >
UK: CBD regulations explained - myths vs. reality
Cannabidiol ('CBD') has had an increasing consumer interest over recent years due to the range of CBD-based products that are now available and the purported benefits these products give to the consumer's health and wellbeing. The scope for more CBD-based products is continually expanding and, according to the Centre for Medicinal Cannabis, the UK CBD market is currently worth £300 million (double that of the current Vitamin-C market) and is expected to reach £1 billion by 2025, suggesting that this wave of popularity is more than just a passing fad.
Despite the boom in the CBD sector, there exists a lot of confusion and ambiguity surrounding CBD itself and the regulatory framework relating supply of CBD-based products.
Advertising & Marketing
UAE: Influencers must obtain approval from the Ministry of Health and Prevention before promoting health products on social media platforms
You may recall that in our previous article titled “Implications of the new National Media Council’s Regulations”, we touched upon the mandatory licensing requirement which must be met by social media bloggers and influencers whom provide paid advertising services on social media platforms.
In addition to such requirement imposed by the National Media Council, bloggers, social media influencers and healthcare institutions are also required to obtain the prior approval of the Ministry of Health and Prevention (the “MoHaP”) in order to advertise medicines, pharmaceutical products, and any health-related products on social media platforms. This further regulatory restriction arose in order to prevent individuals whom lack the professional qualifications and educational background from promoting such products to the public.
Australia: Everyone loves a discount, but advertisers beware
As foreshadowed in our earlier article here, the Federal Court of Australia has recently brought down its decision in ACCC v Kogan Australia Pty Ltd [2020] FCA 1004 (Judgment). The Judgment acts as a reminder of the potential pitfalls in advertising sales and savings, and follows from a number of infringement notices that the ACCC has issued, and Court enforceable undertakings it has sought, from retailers in late 2019 and early 2020 in relation to was/now pricing, as discussed in our articles here and here.
Case Update
Understanding ‘unavoidable and foreseeable’: an interpretation of Regulation 1008/2008
Cases on the price transparency requirements of Regulation (EC) 1008/2008 are relatively infrequent but a potential compliance problem for airlines. In the Air Berlin case in 2017 the Court of Justice of the European Union held that carriers must show both the air fare and, separately, any taxes, charges, surcharges and fees that are ‘unavoidable and foreseeable’ under Article 23(1) of Regulation 1008 from the first time their price is presented. This appears to be the case even if an airline chooses to structure its prices on the basis that, for instance, airport charges are included in the basic fare. The CJEU has now given a further ruling on their interpretation of ‘unavoidable and foreseeable’ in Ryanair Ltd and Others v Autorità Garante della Concorrenza e del Mercato.
Competition & Consumer
Poland: UOKiK investigates rebate practices of 19 retail chains
In early July, the Polish competition authority (UOKiK) opened preliminary investigations into the rebate practices of 19 retail chains. In particular, the authority will focus on whether retrospective rebates are used to exploit retail chains' contractual advantage towards small and medium-sized enterprises supplying food products.
The UOKiK has sent detailed requests to retail chains and to selected food product suppliers asking them for information on the types of rebates applied by retail chains.
In its press release of 7 September 2020, the UOKiK described the mechanism of retrospective rebates used in relations between retail chains and their suppliers, and pointed out that such rebates are also applied in contracts concluded for short periods of time.
Hungary: Consumers subjected to unfair B2C commercial practices due to COVID-19
The Hungarian Competition Authority (GVH) keeps a watchful eye over advertisement claims regarding alleged COVID-19 treatments that exploit the vulnerability of consumers in the current pandemic. The GVH initiated an investigation against Max-Immun Kft. in May (VJ/22/2020), because of its advertisement of Vargapeptide product stating that the cosmetic skin care spray containing proinsulin C-peptide was suitable for the treatment of several diseases such as COVID-19, cancer and diabetes.
The GVH, as a provisional protective measure, in its decision dated 27 July 2020 (VJ/22/2020/63) prohibited the company from advertising any of its cosmetic products containing C-peptide until the end of the investigation.
Singapore: Competition and Consumer Commission of Singapore publishes new guidelines on price transparency
The Competition and Consumer Commission of Singapore ("CCCS"), which oversees consumer protection and anti-competition practices in Singapore, has published a set of guidelines on how suppliers should transparently and accurately price their products so as not to mislead consumers.
The Guidelines on Price Transparency outline how the CCCS would enforce the Consumer Protection (Fair Trading) Act in relation to a supplier's pricing practices. It highlights infringing conduct and specifies measures that suppliers should take to ensure their pricing practices are not misleading and in compliance with consumer protection law.
Diversity & Inclusion
Responding to the Black Lives Matter movement and making Black History Month really count
The Black Lives Matter movement has been around since 2013. It originated with the creation of a hashtag on social media in response to the killing of a Black teenager and the acquittal of the man who shot him; but in 2020, the movement gained momentum on an unprecedented level following the death of George Floyd, which brought to the forefront the unlawful killings of numerous Black people in the US and elsewhere at the hands of police forces, leading to widespread protests and demands for real change.
But how has the movement affected companies within the retail and consumer industry? And what more could they be doing to increase equality, diversity and inclusion within their workforces and in the wider communities they serve, and to demonstrate their commitment to this?
Franchising
Malaysia: Amendments to the Franchise Act 1998
With thanks to Lee Lin Li, Partner, and Chong Kah Yee, Associate at Tay & Partners for contributing this article.
Malaysia has introduced various amendments to the Franchise Act 1998 (“FA”) via the Franchise (Amendment) Act 2020 (“Amending Act”) to ensure conformity with the current developments of the franchise business in Malaysia.
The Amending Act was published in the Gazette on 6 March 2020 after receiving its Royal Assent on 20 February 2020. It has yet to come into force but is anticipated to do so at the end of this year or early next year.
HR Services
Global restructuring projects: Overcoming organisational challenges and reshaping the workforce in the wake of COVID-19
The Retail & Consumer sector has been greatly impacted by the COVID-19 pandemic, however the experience is not uniform across the sector. This has been heavily influenced by the types of goods and services offered, the mode of operation of the business (traditional brick and mortar outlets versus online platforms) and the skills of existing staff. The trend of an increasing market-share of e-commerce has prompted rapid business model transformation in the industry and as a result, businesses in this sector are undertaking major strategic workforce restructurings in order to adapt to the new operating environment of the future.
Our International HR Services team has launched 'Global Restructuring Projects' to help companies with these projects. Please click here for further information about how our International HR Services team can help with complex workforce restructurings, and to access our cross-border restructuring guide.
Intellectual Property
Intellectual property rights in recipes and food
The food industry is a sector brimming with creativity and fast paced food innovation. Chefs, bakers, and food bloggers are constantly creating, adapting and following recipes in the pursuit of new ideas for delicious food. Moreover, the UK restaurant industry is a valuable one with more than 86,000 restaurants contributing to its worth of over £38 billion in 2019. From a wider perspective, the food and drink industry is the EU's biggest manufacturing sector in terms of jobs and value added. These statistics raise important questions over what intellectual property rights are available to safeguard and protect such investments, and to what extent they may apply to recipes and food.
All I want for Christmas is...brand protection
Many of us may remember from our childhood a Christmas toy or TV advertisement which will never leave our minds and which we associate with a particular company. This year more than ever we need something to look forward to, and what is better than Christmas – and good news, it is coming and coming fast! It is no surprise then that many businesses will have already spent a significant amount of time preparing for the Christmas and New Year holiday season, which is a crucial period for sales.
However, Christmas is also a time when counterfeiters and opportunistic third parties are prevalent and when intellectual property ("IP") infringements are very common. It is therefore important to ensure brands are thinking well in advance about protecting their existing IP and IP which will be created for the festive season through new products, one-off products and marketing campaigns.
Here are a few IP pointers for brand owners to consider when planning for the release of a new product or marketing campaign pre-launch and post-launch.
Egypt: Anti-counterfeiting recordals process - early planning is key
Since March 2016, brand owners seeking to export select goods to Egypt have been subject to a rigorous recordal system implemented by the General Organisation for Export and Import Control ("GOEIC"). Ministerial Decree number 23/2016 was implemented as a means of reducing the number of counterfeits entering the Egyptian market, creating a recordal database that the authorities could use to help verify the authenticity of shipments entering the country.
As of the date of writing, recordals with GOEIC apply to 29 categories of goods (increased from the original 25 categories). If a brand owner is planning to export any of the applicable goods to Egypt, it is imperative that they comply with the recordal process to avoid their goods being detained by customs. In light of the onerous requirements, not to mention the length of time that it can take to prepare and complete the recordals, forward planning is key so that lost sales can be mitigated and any strain on relations with local distributors can be avoided.
News & Events
How do the regulators and courts view Business Interruption insurance policies?
Businesses around the world have been affected by extensive disruption and/or closure as a result of the Coronavirus pandemic. This had led to enormous financial loss in addition to other economic and personal hardships. Many businesses have made claims to seek to recover these financial losses under their Business Interruption (BI) insurance policies.
Our Business Interruption insurance tracker allows you to see at a glance how regulators and courts across key jurisdictions view insurance policies and the coverage claims that have already been made. The tracker currently covers Australia, France, Germany, Hong Kong, Spain, The Netherlands and the UK.
The High Court judgment on the FCA's expedited business interruption insurance test case, The Financial Conduct Authority v Arch and Others [2020] EWHC 2448 (Comm), was handed down on 15 September 2020. Click here to read the judgment and here to read our commentary.
We advise Mothercare on the appointment of Boots as its UK and Republic of Ireland franchise partner
The partnership will enable Mothercare to have its branded clothing, home and travel products sold in Boots stores from autumn 2020 as well as online on the Boots website.
The Bird & Bird team advised Mothercare on the franchise, intellectual property and supply chain elements of the long term deal. The franchise partnership will be for an initial period of 10 years. Last year, Bird & Bird took a lead role in advising Mothercare plc, and its wholly owned subsidiary Mothercare Global Brand, on a major restructuring and refinancing. In addition to the partnership with Boots, Bird & Bird also advised Mothercare on its new twenty-year franchise and supply chain agreements with its longstanding franchise partner Alshaya Group.
Our Retail & Consumer team hosts webinar series on post-COVID restart strategies
Our international Retail & Consumer team recently hosted a series of webinars to explore how businesses in this sector can not only recover from the impact of COVID-19, but also look for new opportunities during this challenging time.
The team shared five webinars over one week in September, with each focusing on an important topic for retail and consumer-facing businesses in the wake of COVID-19:
-The impact on the workforce (Pattie Walsh, Stephanie Wong)
-An opportunity for innovation and transformation (Edoardo Monopoli (OXYGY), Ian Edwards, Rebecca O'Kelly-Gillard)
-The impact on food & beverage regulations and sustainability (Nicolas Carbonnelle)
-The impact on supply chains (Graeme Payne, Victoria Hobbs, Jordan Cooper, Nick Green, Megan Harrison, James Fowler)
-Three relevant contract law developments in 2020 (Andrew White)
If you missed it, it's not too late to listen! Register your details here to receive a link to the recorded sessions.
Welltodo launches 2020 Wellness Innovation Blueprint
This free report compiled by Welltodo's team of industry trend experts, features 500+ of the industry’s most innovative brands, segmented by the key industry categories identified as being the fastest-growing.
The report maps out the rapidly expanding wellness industry ecosystem, featuring 25+ industry categories from digital fitness, meditation and sleep, to supplements, clean beauty, technology and sexual wellness. Click here to download your copy.
Bird & Bird's Wellness team continues to partner with Welltodo, and we are pleased to be joining them in a four-part digital event series looking at the future of the Wellness industry. The final two parts of the series will take place on 6 and 13 October. Click here to find out more and register for the events.
