Unfair advertising in Bulgaria
Overview
Bulgaria’s Commission for the Protection of Competition (CPC) recently imposed a significant penalty on Metro Cash & Carry, totaling approximately 2% of the company’s 2017 revenue, due to an unfair comparative advertising campaign. The regulatory body mandated that Metro cease the campaign immediately and notify two national newspapers of the decision.
SUPERMARKET WARS
Lidl Bulgaria EOOD filed a complaint asserting that Metro engaged in unfair competitive practices through a comparative advertising effort designed to persuade Lidl customers to switch retailers.
Lidl objected to Metro’s campaign, which featured multiple advertisements referencing Lidl’s signature themed promotional weeks. During these periods, Lidl showcases food and beverages from particular countries and regions known for distinctive culinary traditions.
Metro’s promotional materials claimed: “the Italian/Asian/German/American week in Metro begins on 1 January and is until 31 December… don’t change your taste, change your supermarket!”
Lidl contended the messaging falsely suggested Metro offered identical products year-round rather than seasonally, positioning this as a superiority claim designed to redirect Lidl’s customer base.
Metro presented a defense arguing that themed promotional weeks represent a widespread industry practice, adopted by competing chains including Kaufland and Billa. Additionally, Metro emphasized operating a fundamentally different business model—a significantly larger wholesale operation primarily serving professional vendors and resellers, contrasting sharply with Lidl’s smaller-scale retail grocery model targeting individual households.
Metro maintained that operating in a distinct market segment with different target demographics, the advertisement simply highlighted that Metro’s hypermarkets offer extensive product variety available continuously, unlike Bulgarian competitors including Lidl.
DECISION
Article 32(1) of Bulgaria’s Protection of Competition Act explicitly forbids “misleading or unfair advertising” given potential adverse competitor impacts and customer behavior influence.
Despite Metro’s arguments, the CPC determined that consumers primarily associated themed weeks with Lidl, and Metro’s advertisement indirectly referenced Lidl. The CPC also established that competing supermarket chains don’t employ identical promotional strategies, rendering the promise of year-round “Italian/Asian/American week” products an assault on Lidl’s established business practices.
Furthermore, the CPC deemed the phrase “change the supermarket” anti-competitive due to its explicit intention to convert Lidl customers to Metro.
Metro’s comparative advertising initiative violated Bulgarian competition regulations.
THOUGHTS
The CPC’s determination, while arguably rigorous, reinforces legal protections for enterprises and supports equitable competitive standards. Organizations crafting marketing initiatives must carefully examine any direct or indirect competitor references, particularly those carrying negative implications.