Aldi to sue Dunnes as supermarket price war intensifies

The German discounter Aldi will next week launch a lawsuit against its rival Dunnes Stores over the use of its name and prices in Dunnes’ advertising.

The case highlights the intensity of the Christmas price war that has gripped the €9 billion Irish supermarket sector, following a drive by Aldi and its fellow German counterpart Lidl to gain market share here.

Aldi will on Monday allege in the High Court that Dunnes infringed upon its trademark with ads comparing the two chains’ prices for a range of grocery items. Aldi is expected to allege that Dunnes’ ad are unfair because the products are not like-for-like comparisons.

Rob Farrell, a senior Aldi executive, outlined the complaint in an affidavit filed with the High Court earlier this week. Aldi declined to comment yesterday or to release the legal documents. Dunnes did not respond to a request for comment.

Comparative advertising is becoming more prevalent as competition hots up in the grocery market. The Aldi-Dunnes case is similar to another taken by Aldi against Tesco in the run-up to Christmas last year.

That case was settled, after Tesco paid €150,000 to the St Vincent de Paul charity and gave a range of undertakings to Aldi. For example, Tesco undertook not to make misleading price comparisons between products with completely different ingredients, or to compare wines that originate from different countries.

Growing competition
A trading update yesterday from the Tesco group also highlighted the growing level of competition in the grocery trade. It said its sales in Ireland fell by 8.1 per cent in the 13 weeks to November 23rd.

“In Ireland, our performance continues to reflect extremely challenging conditions for consumers, compounded by a more intense competitive environment,” the company said yesterday.

Sales at its British stores fell by 1.5 per cent, as the group struggles to implement a turnaround strategy.

Recent industry sales data from Kantar also illustrated the damage being done to Tesco by competition from Aldi, Lidl, and latterly, Dunnes.

The latest Kantar data, for a 13-week period to mid-November, suggested Tesco’s share fell to 26.5 per cent on the back of a 6 per cent drop in sales, while Aldi, Lidl and Dunnes all increased their share.

Source: www.irishtimes.com

Publication date: Fri 6 Dec 2013