MicroBio Co., Ltd.

Case:

Key Word(s):

Qi-nourishing ginseng, comparative advertising

Reference:

Fair Trade Commission Decision of January 30, 2013 (the 1108th Commissioners' Meeting); Disposition Kung Ch'u Tzu No.102015

Industry:

Retail Sales in Non-specialized Stores with Food, Beverages or Tobacco Predominating (4711)

Relevant Law(s):

Article 24 of the Fair Trade Law

Summary:

1. The FTC received a written complaint from Standard Foods Corporation (hereinafter referred to as Standard Foods) about the violation of the Fair Trade Law by MicroBio Co., Ltd. (hereinafter referred to as the offender). Standard Foods had obtained the Health Foods Certification Label from the Department of Health (hereinafter referred to as the DOH) for its "Qi-nourishing Ginseng" product that enjoyed a large market share compared to similar products. Since the product had been certified as a health food, it was unlikely to be high in sugar. However, in a TV commercial for its "Li Shi Zhen Sijunzi Tonic Drink", the offender used Standard Foods' Qi-nourishing Ginseng" product for comparison by stacking 12 sugar cubes into the number 12 on the packaging of Standard Foods' "Qi-nourishing" product, claiming that "buying such a health tonic equals to buying a bunch of sugar" while there was also a narration asking "Can diabetics drink this?" It was an insinuation that Standard Foods' "Qi-nourishing Ginseng" product was excessively high in sugar. At the same time, the offender also put up at various outlets signs and posters saying that "buying health tonics equals to buying a bunch of sugar," "Be aware of the sugar trap in ginseng drinks!" Set by the side of the "Li Shi Zhen Sijunzi Tonic Drink" products, however, was a sign saying "complying with DOH regulations." The practice misled the public into believing that the sugar in Standard Foods' "Qi-nourishing Ginseng" product was too high in sugar and Standard Foods probably did not comply with the regulations of the DOH. It was in violation of Article 24 of the Fair Trade Law.
2. The offender put the wording of "buying healthy tonics equals to buying a bunch of sugar" in its advertisement. The brand name "Quaker" was covered up but the name of the product "Qi-nourishing Ginseng" or "Qi-revitalizing Ginseng" could still be identified. A close look at the product being compared, the packaging and size, the colors, the picture of a ginseng root with a single tassel, the proportion of the ginseng on the packaging, and the size and proportion of the Chinese characters of the name of product were all extremely similar to those of the packaging of Standard Foods' "Qi-nourishing Ginseng" product. Meanwhile, according to Nielsen's market 2011 survey, Quaker's ginseng series had the biggest market share. The data from the FTC's industrial data management system also showed that Standard Foods' Chinese herbal nutritional supplementation drinks were the most successful on the market. Therefore, the commercial was indeed intended to make consumers associate the product being compared with was Quaker's "Qi-nourishing Ginseng" product.
   
3. The TV commercial, the signs and posters put up at sales outlets, and advertisements in magazines all contained the wording of "buying health tonics equals to buying a bunch of sugar" and "be aware of the sugar trap in ginseng drinks" was applied in contrast with the offender's "the only sugar-free ginseng tonic in the market, and the making of Li Shi Zhen Sijunzi Tonic Drink complies with DOH regulations." The commercial gave the general public the impression that the sugar content of each box of Quaker's Qi-nourishing Ginseng" products equaled to 12 cubes of sugar. They were too high in sugar and consumers ought to switch to the offender's Li Shi Zhen Sijunzi Tonic Drink which was the only sugar-free tonic drink in the market and whose making complied with health regulations. The offender maintained that the data applied in the commercial had been taken from an article titled "The Terror behind Sugared Beverages - The Secrets That You haven't Been Told" published in the Common Health Magazine. However, the FTC reviewed the article and found out that it was only a report on the harm to health from drinking beverages containing too much sugar and was not about ginseng drinks at all. The FTC also inspected the lab report from Oneness Biotech Co., Ltd. provided by the offender and a news release from the office of Taipei City Councilor A. Both were related to the sugar content in all ginseng drinks and not related to the excessive sugar content of any ginseng drink from any specific manufacturer as insinuated in the commercial.
4. The DOH assured that it had never ratified any health foods containing refined sugar of more than 200 kilocalories. Consequently, it was impossible that the sugar content of Quaker's Qi-nourishing ginseng product could be excessive. The DOH further commented that, in principle, the intake of refined sugar for diabetics should not exceed 10% of the total calorific ingestion. The question as to whether diabetics could consume ginseng drinks depends upon the total sugar intake suggested. It was not decided by the type of sugar at all. In addition, the conclusion of the DOH's seminar on the "Regulations for Management of the Refined Sugar Level in Health Foods" suggested that no more than 25 grams of refined sugar should be added in health foods. Meanwhile, the test report from SGS indicated that each 60ml bottle of Quaker's "Qi-nourishing Ginseng" drink contained about 5.6 grams of sugar and was under the sugar content limit according to the aforesaid principle. There was therefore no excessive amount of sugar to harm health. The pictures in the TV commercial and magazines and on the signs and posters put up at sales outlets were for sugar content comparison. In addition, the green oblong object with a ginseng picture on the packaging that said "Qi-nourishing Ginseng" or "Qi-revitalizing Ginseng" was apparently Quaker's product. The false representation and insinuation of Quaker's Qi-nourishing Ginseng product being overly high in sugar would mislead consumers to believe the product did contain too much sugar and therefore was incompliant with DOH regulations and bad for health was an unfair comparison in violation of Article 24 of the Fair Trade Law. Therefore, the FTC imposed an administrative fine of NT$500,000 on MicroBio Co.

Appendix:
MicroBio Co., Ltd.'s Uniform Invoice Number: 70555349

Summarized by: Chen, Jen-Ying; Supervised by: Chen, Chun-Ting