This week the Institute of Grocery Distribution informs its 300 members
that its long-awaited code of conduct on lookalike products is finally
primed and ready for action.
After months of waiting, the Office of Fair Trading has given the go-
ahead to the IGD’s so-called Dispute Resolution Procedure (DRP),
declaring it free of any restrictive practices.
But if brand owners are expecting the ‘code of conduct’ to be a seventh
cavalry, riding to the rescue when they’re surrounded by look-alikes and
hostile own-labels, then they’re going to be disappointed.
When news of the code first broke it was widely hailed as the lotion to
heal the wounds that retailers and brand owners had inflicted upon each
other at the height of the battle of the brands in spring 1994.
The reality, however, is somewhat different. The spirit of the code is
advisory rather than regulatory. Put simply, the disputing parties will
still have to continue to sort it out between themselves, but now they
will have the help of the DRP.
IGD chief executive Dr John Beaumont has been involved from the start.
In fact, he was invited by a number of top manufacturers to act as
‘It’s a complex subject, you can’t come up with a set of rules saying
you can’t ever use this colour or this bottle shape or allow a company
to say ‘I own this colour’. It just wouldn’t work,’ says Beaumont. ‘So
in the end we opted for a code rather than a set of rules.’
The DRG amounts to little more than guidance to companies on how they
can resolve their differences. Signatories to the code have to abide by
certain rules, however.
Three steps to brand heaven
Companies can nip a problem in the bud by sorting it out at operational
level. If that fails then the second step is to take it right up to the
top: the board of directors.
Finally, if the disagreement persists then an independent professional
mediation company based in London is called in. By making sure each side
gets an opportunity to air its grievances it is hoped a compromise will
If all these measures fail then there is little that the IGD can do but
bow out and let both parties roll up their sleeves and commence slogging
each other. The last requirement by the IGD is that it is formally
informed of the DRP’s failure.
Even if the mediator is successful in bringing about a truce there is a
caveat, says Beaumont. ‘It’s a mediator not an arbitrator. The mediator
may not even be asked for his opinion at the end and whatever he says
isn’t even binding. It’s not a judgment set in stone,’ he says.
What this boils down to is that two years after the whole saga burst
into the marketing arena with the great Coca-Cola versus Sainsbury’s
debacle, branded manufacturers are really no further forward.
Even after the appearance of the British Producers and Brand Owners
Group, which spawned the British Brands Group (BBG) last October,
marketers still haven’t been able to wrest any power from the retailers.
Despite initial high hopes, the Trade Mark Bill turned out to be of
little use. Eventually brought into force in October 1994, it shied away
from pinning down any defining features of a brand. Although it allows
brand owners to register distinctive shapes and geographic words, many
of the measures introduced are directed at preventing blatant
counterfeiting rather than the more subtle ‘lookalikes’.
It left manufacturers with the unhappy conclusion that they would get no
help from British legislation in their attempts to prevent the
‘plagiarism’ of retailers, as BBG chairman Edwin Beckitt refers to it.
The IGD’s Dispute Resolution Procedure is in reality only a more
formalised version of what both parties could have done two years ago.
But BBG spokesman John McLaren insists that the procedure is an
improvement on the past: ‘It’s a tricky area and there is a strong
desire from both sides to avoid confrontation. The DRP allows everyone
to put their views over in a non-antagonistic way, through the auspices
of the IGD, which represents both the retailers and the manufacturers.’
The gang of four
Although the majority of the IGD’s policy issues council has backed the
new DRP, four players are notable by their absence of public support:
Northern Foods, Allied Domecq, Co-operative Wholesale Society, and Asda.
Asda is known for its keen attempts over the past year to accelerate its
own-label penetration to levels comparable with that of Tesco and
But Beaumont believes the new code’s effectiveness is not dependent on
the backing of the entire industry.
‘Not everyone needs to sign it - it can have a varying degree of
success.The fact that one retailer or manufacturer may not use it does
not really mean it will not work,’ he insists.