UK: Diageo wins Vodkat legal case against Intercontinental Brands

By | 19 January 2010

Diageo wins Vodkat ruling

Diageo wins Vodkat ruling

Diageo has won its legal battle with UK drinks firm Intercontinental Brands over its Vodkat vodka-based spirit beverage.

A court ruling in the case between the two companies, which was launched back in September 2008, was handed down this morning (19 January) and saw the judge favour Diageo.

Intercontinental Brands (ICB) was ruled to have been “passing off” Vodkat as a vodka product, the court found. Vodkat is a 22% abv mix of fermented alcohol and vodka.

The European Union definition in law of vodka states that it must be made of 100% distilled alcohol and at least 37.5% abv.

"Vodka is already a protected category under EU law," Diageo said today. "However, this gives vodka the additional protection of the law of passing off by recognising that vodka is a term worthy of protection."

Philip Almond, marketing director for Diageo GB, added: “Our concern was that consumers were being confused as to what Vodkat really was. Furthermore, because most vodka is drunk mixed, it's very difficult for consumers to know whether they have or haven't bought a vodka (in Vodkat).”

The judge in the case said he was satisfied that “the instances of actual confusion proved in evidence are representative of a significantly greater number than will have occurred”. The judge was also satisfied that Diageo will have suffered resultant damage in the form of both lost sales and erosion of the distinctiveness of the term ‘vodka’.

The judge also condemned certain other vodka lookalike products, specifically mentioning Vodkova and Tolstoy from Halewood and Imperial Volacka of Manchester Drinks Company.

When contacted by just-drinks, ICB director Paul Burton said: "While we are disappointed with the decision, we want to reassure our customers that we will continue to supply our Vodkat Schnapps product to them. We are considering the branding issues carefully.

“ICB has never sought to mislead consumers with the branding of Vodkat Schnapps. However, in light of this judgement, it is clear that we need to make it even more evident to consumers that Vodkat Schnapps is a 22% abv schnapps and not a vodka.

“The process is that there will be some form of injunction against the existing presentation of Vodkat Schnapps unless we are successful in appealing against the decision,” Burton continued. “As soon as we are clear about the terms of any injunction, we will act swiftly to resolve the issues raised by the Judge with regard to branding to ensure continuity of supply.”

When asked if ICB intends to appeal the ruling, Burton said: "It is very likely."

A spokesperson for the Gin & Vodka Association (GVA), meanwhile said the trade body “warmly welcomes the ruling”.

The GVA was not in a position to challenge Intercontinental Brands legally, because it is not a trading company which was affected by the presence of Vodkat in the market place.

Pending a possible appeal by ICB, a final ruling on the matter is expected early next month.

Sectors: Spirits

Companies: Diageo

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