From October 2016 to March 2017 the team is joined by Guest Kats Rosie Burbidge and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Tian Lu and Hayleigh Bosher.

Thursday, 30 October 2014

"Almost identical, just with different names": shopping at Aldi

"My first time at Aldi... Should we all be shopping there?" is an article by Felicity Hannah, posted on Yahoo!'s UK & Ireland Finance page with the byline "Our money saving columnist takes her first trip to a discounter to see what all the fuss is about".  The text in red, in the extract below, is enough to make any independent brand owner see red. Felicity writes:

" ...Although my friends rave about the prices and value, and my husband occasionally slips in to buy prize-winning booze, I have not personally shopped in an Aldi, Lidl or any of the discount supermarkets taking Britain by storm.

Yet profits at Tesco have fallen by 92% while Aldi’s profits rose by more than 65% in 2013. There’s got to be a reason for that. A new Aldi has opened just a five-minute drive from my house, so I went to check it out...
...

I was surprised to see so many brands I regularly buy, such as Kellogg’s. But even more surprising were the many, many lookalike brands. There were crisps in tubes, all in the same colours as Pringles so that you knew exactly what flavour you were buying. There were packets of dishwasher tablets and washing machine powder all with almost identical branding to the big names, just with different names.

The prices seemed impressive, even though I didn’t have any comparisons to hand, so I stocked up and hoped the quality was as good as my friends had promised. ..."
According to the author, Aldi’s profits rose by more than 65% in 2013. There is no doubt that the store, with its "pile-it-high, sell-it-cheap" ethos, has been a huge financial success and that the momentum it enjoyed at the beginning of the recent years of recession has been maintained even once the UK economy has picked itself up. With over 9,000 stores spread across 18 countries, Aldi is likely to exert an increasing influence on consumers' behaviour.

Aldi's origins are German, but its business practices are at odds with that country's position on lookalikes and unfair competition. This Kat thinks that it is doubtful whether any country in the European Union is more critical of lookalikes than Germany [though opinions to the contrary are invited].

Smart clothes, but not much in the way of crisps ...
This Kat is always happy with the thought that IP rights should not be given over-wide protection that inhibits or suppresses competition, but he is disappointed that Aldi should find it necessary to indulge in what appears to be a systematic process of emulating others' brands and misleading consumers.  Merpel thinks there's no problem: she doesn't understand, though, why the brand owners don't fight back by opening their own Aldi lookalike stores and giving the downmarket retail chain a taste of its own medicine ...

  • Aldi renames its cut-price "Beluga" caviare following complaints that it isn't Beluga, here
  • Saucy Fish Co. gets consent injunction against Aldi here
  • Aldi ruthlessly apes the appearance of top brands here
  • Moroccanoil fails in passing-off action against Aldi, but trade mark proceedings are pending here
  • German Law on Unfair Competition (English translation) here

A Katpat to Mrs Kat for drawing this item to our attention

18 comments:

Anonymous said...

I really can't understand the fuss about this issue. The quote in red says it all, "There were crisps in tubes, all in the same colours as Pringles so that you knew exactly what flavour you were buying." Yes, a consumer will know what flavour they are buying - they don't however think that they are buying Pringles!

FluorinatedAdam said...

Unless pringles have protected the shape of their potato snacks, and the shape and colour of their packaging I see no problem.

Across food packaging in general colours are used as short hand for flavour (especially in crisps) - burgundy as shown in the picture almost always a meat flavour, while red is always salted.

It is quite clear that the consumer fully knows that they are not buying the branded good.

I don't even like crisps.

Anonymous said...

In more than a few cases, the look-alike might be owned by the original brand owner, who wishes to sell cheap at the discounter without deteriorating the value of the original brand.

Anonymous said...

Hey Mr Cat, did you know that IP also include patents?

Anonymous said...

Some points:

1. Re your comment: "Aldi's origins are German, but its business practices are at odds with that country's position on lookalikes and unfair competition. This Kat thinks that it is doubtful whether any country in the European Union is more critical of lookalikes than Germany"

I am a IPKat reader based in Germany. I am also a regular Aldi shopper. Here Aldi also sells red and green tubes of potato snacks, which look very similar to those in your article.(Please note that I use the word "potato" loosely). I know that they are not Pringles(R), so I am not being misled.

2. The inference in the quoted aricle that the woes of Tesco et al is all due to sharp practices of Aldi and the other discounters is nonsense. The grocery market is changing. The big box supermarkets have simply been flat-footed in catching up. To the extent that the disounters such as Aldi sail close to the wind in terms of their branding and get-up, (i.e. designing around registered trade marks), then it is nothing more than the practices in which the major supermarkets have indulged for years. Anyone for a Puffin, sorry Penguin(R)?

Jeremy Nicholls said...

disappointed that Aldi should find it necessary to indulge in what appears to be a systematic process of emulating others' brands and misleading consumers.

Really? I'm not aware of any legal reason for not indulging in a bit of brand emulation (whatever that is). And if you apply the what-are-you/who-are-you test, then there's surely no suggestion of misleading consumers. For the typical ALDI shopper, branded goods are the exception, so he starts from the assumption that he is buying no-name goods.

Anonymous said...

No evidence here that Ms Hannah was in any way "misled", just able to identify comparable products to those she normally would buy. Surely even the notorious housewife-in-a-hurry would not pick up the tube of Stackers believing them to be Pringles...

Anonymous said...

I would echo several of those that have already pointed out that the though of being misled seems overplayed.

The whole premise of the store is that they are NOT selling name brands.

How is anyone then misled?

The as-near-as-possible look-alike then is clearly not intended, nor should it confuse anyone as to actual source - the reason why trademarks are even allowed.

MaxDrei said...

I put it to you that ALDI is making good profits in England precisely because it is "made in Germany". People all over the world buy German goods because they trust them and because they suppose that their "Quality"is proportionate to their price.

Made in England used to be a trusted brand. Is it still? Or is England now the place where trust has broken down furthest, the place which most encourages businessmen and financiers to treat the little people as muppets, to be ripped off whenever the chance arises?

Is it a coincidence that in 2006 the UK was measured as the world's 9th best country for women but that it has slipped since then, to Rank 26?

And why is it that utilities ownership by the State is just great, in the England of today. That is, as long as it's the Government of France and not of the UK.

Tell me! You see, I live in Germany.

Anonymous said...

I suspect that many Aldi shoppers aren't aware of Aldi's German roots. Aldi certainly don't use the fact in their marketing...

Anonymous said...

RE: Is it a coincidence that in 2006 the UK was measured as the world's 9th best country for women but that it has slipped since then, to Rank 26?

well, let's compare it with a German rank:

economic participation: rank 46 of 136 countries;

educational attainment: rank 86 of 136 countries



Anonymous said...

"Why is it that utilities ownership by the State is just great, in the England of today. That is, as long as it's the Government of France and not of the UK."

Simply put - the motivation. If the utilities are owned by one's own state as a perpetual monopoly, there is room and motivation for bureaucracy, empite-building, padding, graft and all the rest that comes with a statutory monopoly position. The enterprise risks also remain with the state - pensions liabilities, bankruptcy, safety breaches and the like.

In contrast, where other states' domestic enterprises bid competitively for the right to supply services abroad, then the competitive tender process and the possibility of losing the franchise to another operator negates many of the drawbacks of the state ownership. The risks are also externalised to the other state, who may obtain a profit in exchange for this shouldering the risk.

That's the free (or at least, regulated) marketplace at work, you see.

Anonymous said...

I shop at Aldi.

That being said, there is no advertisement or general knowledge that the merchandise that I buy has any "made in Germany" distinctions (this is to credit Anonymous @ 15:00).

Sorry Maxdrei, but it sounds like you are fishing for compliments that are not a part of the equation here.

Charles said...

The article in the Daily Smellygraph link, concerning Beluga caviar, contains the report that:

"A spokesperson from the store told the Telegraph: "We have been made aware of a number concerns relating to the World Health Organisation’s guidelines on distinguishing between the many different types of caviar."

Here comes puzzlement. Is the learned spokespersonnage referring to the Codex Alimentarius? If so, it certainly is not the "World Health Organisation’s guidelines". Furthermore, I am not aware of it having legal force beyond merely being cited (correction?). I am not surprised that endless news sources are parrotting that Aldi has a problem with a WHO standard.
In the EU I think there is in fact a caviar labelling requirement. In May 2006, the EU adopted Commission Regulation (EC) No. 865/2006, later amended by Regulation (EC) No. 100/2008, which made the labelling of all caviar containers obligatory in all EU Member States. As a result, all caviar containers in the EU market are required to bear a CITES label (vide: https://cites.unia.es/cites/file.php/1/trainers/E-GC-Briefcase-04.ppt).


Personally, as per Telegraph picture, I shall be offering blackberries in stainless steel bowls in future.

MaxDrei said...

It's nice, that my comment above elicited so many replies.

It is the WEF that is the source of the stat that the UK has fallen from Rank 9 to Rank 26. Anon, at 16:56, what's your source (for Germany ranking 86 out of 136 for education)? Did you just make it up?

Some suspect that the UK public has no idea that ALDI is a German service-Provider. I dare say. After all, who knew that DHL is a part of the Deutsche Bundespost? And how many in the UK know that Mercedes, BMW and VW are all German? Not all, that's for sure.

All: on the M20 approaching London (or even on the northbound M6 approaching Manchester) don't make the mistake of supposing that any car with German plates is driven by a German. Just because I call myself MaxDrei does not mean that I go under a German Passport, and am "fishing for compliments" now does it?

The best response was the one warning us all that monopolies are bad for us. I think that with judicious use they can promote the progress. Take nuclear power, the only green solution powerful enough to keep us from frying our children and grandchildren. Three cheers for the monpolies of France and China. At least they are promoting the Progress of the useful arts.

For me there remains the mystery. If we in the UK are so bad at State Monopolies, how in the world do we suppose that another monopoly, HMG's Regulator, can possibly police the rival overseas utilities Service Providers, including the Chinese Triads, the Russian Mafia, the American Bandidos, the French Enarchs and the German Establishment Network.

But back to ALDI. The banking business and the groceries business function in the same society. Banking in Frankfurt is different from banking in London. There is no casino in Frankfurt. What the Bankers do in Frankfurt is socially useful. When the Deutsche Bank wants to play the socially-useless casino, it sets up an casino operation in London. I'm not suggesting that ALDI grows ist bananas in Germany but just that people in England vaguely sense that ALDI might belong to old-fashioned German culture. Tell me, that poster above who Shops at ALDI: why?

Finally, how is TESCO getting on, outside the UK. Has Wal-Mart cracked the English groceries market yet? If not, why not? Is Wal-Mart perhaps too expensive?

Anonymous said...

RE: (for Germany ranking 86 out of 136 for education)? Did you just make it up?

I read it here:

http://reports.weforum.org/global-gender-gap-report-2013/#=&section=country-profiles-germany

MaxDrei said...

Many thanks anon, and much appreciated. Surprise, surprise, it turns out that your source is the same as mine.

Your figures show that there is still a gender gap in Germany, when it comes to the specifics of "economic participation" and "educational attainment". Given how conservative German society is, it would astonish me if there were not still such a gap. Nevertheless, when a young woman, going forward, contemplates which of England and Germany is "better" overall, the stat that UK has slipped from Rank 26 Overall to Rank 26, Overall, is still significant, is it not?

Anonymous said...

To be honest, that rating of 86th looks a complete joke. Presumably, what brings De down in the statistics is the number of people entering tertiary education, with the implication that sending all to university is the best thing which can happen to a Country. The system in Germany still has a very strong apprentice element, where the academically not so gifted (or those opting out of academia) learn a trade which can have a very high technical content, be it mechatronics or dental implant manufacture etc. with cumpulsory attendance at further educational college. Compare that with the UK where nearly everyone attends "University" simply to delay their entry onto the labour market.

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