25/03/2009 (Daily Monitor) - The High Court has ordered Bidco Uganda Limited, an edible oils manufacturer, to pay A.K. Oils, its competitor and subsidiary of Mukwano Group, Shs70 million worth of general and exemplary damages accruing from defamatory and libelous advertisements the former published against the latter in 2005.

In a case that has been running for nearly four years, High Court Justice Yorokamu Bamwine agreed with the plaintiff—in a judgment delivered on March 6, 2009 that Bidco’s newspaper advertisements (with images and wording) in August 2005 that contrasted A. K. Oil’s product, Three Star, and theirs, Ufuta, belittled Three Star, portrayed its manufacturer as deceitful and grievously damaged her reputation.

In the advertisements, Bidco warned consumers to “beware” and told them that Three Star cooking Oil is “blended,” not “100 per cent pure palm vegetable oil” like theirs and that the weight quotation on Three Star represented gross weight (including weight of jerry can) not net weight as carried by Bidco’s product.

According to Justice Bamwine, such advertising implicitly suggested that the quality of Three Star was inferior to Ufuta and depicted A.K. Oils as an unethical and unscrupulous trader unworthy of customers’ trust. “In law every person is entitled to his good name and to the esteem in which he’s held by others. It doesn’t matter whether the person is a natural or artificial one for example a company,” said Jutice Bamwine.
 
“Such a person has a right to claim that his reputation shall not be sallied by defamatory statements made about him to a third person without lawful justification.”

Bidco Uganda Limited, a subsidiary of Bidco Group with principal regional offices in Kenya, launched into the Uganda market in 2005 and the offending advertisements were then part of an aggressive, if overzealous, marketing campaign the company executed to quickly gain a foothold in a market clearly under a tight stranglehold by Mukwano Group. Mukwano started vegetable oil production in Uganda in 1994.

Bidco’s market entry had been over-shadowed by a scandal that had them being offered 10,000 acres of pristine forest land in Kalangala Island for palm oil production.

Bidco resisted ferocious pressure from environmentalists who argued that cutting down the forest would endanger the region’s ecological equilibrium and took the offer by the government of Uganda. The Shs70 million will attract a 25% interest per annum from the date of judgement.

Bidco’s claim in the adverts that its net weight label meant the company was only charging for oil and not the jerry can was found by the court to be spurious since, in pricing products, all companies factor into those prices the costs of packaging.

Publication of the defamatory advertisements, the court said, was “motivated by the material benefits the company would reap from consumers reading the publications without caring as to the damage it was inflicting on the plaintiff’s reputation as a manufacturer of the same product.”