Foodstuffs wins round against rival

The High Court at Auckland has dismissed a contempt claim by one supermarket operator against another in a battle over an advertising campaign promoting a proposed North Shore store.

Progressive Enterprises and retailer group Northcote Mainstreet brought legal action against rival Foodstuffs (Auckland) for how it promoted its plans to open the almost-completed Pak 'N Save store on Wairau Rd.

The matter was sparked by a High Court ruling in June, when Progressive succeeded in stopping Foodstuffs opening that new store, which it had planned to unveil in August.

Foodstuffs responded in July with a 25-day media campaign comprising seven newspaper advertisements, 378 radio station ads and 27,000 flyers distributed to North Shore households and pasted on 29 bus shelters.

The tenor of the campaign was: "We'd love to lower your grocery bill but Progressive's court action won't let us."

The campaign explained how, 18 years ago, Foodstuffs had decided to build the Pak 'N Save but its Australian-owned competitor, Progressive, had stopped it. As a 100 per cent-owned New Zealand company, Foodstuffs was determined to lower prices and was not going to give up, it promised in the campaign.

That campaign resulted in Progressive going to court, claiming Foodstuffs' action was in contempt of court, that the media campaign went beyond fair and temperate comment, had applied improper pressure in how Progressive defended any appeal by Foodstuffs over the first court ruling and that the advertising statements were sub judice. Progressive said Foodstuffs should have exercised greater restraint in its out-of-court public comments and that those comments could obstruct the fair administration of justice.

But Foodstuffs argued its campaign was not intended to undermine or interfere with justice, that it had not applied improper pressure and that it had not inhibited Progressive from defending any appeal it might bring against being barred from opening the store.

Justice David Baragwanath ruled Foodstuff's campaign was in the context of "a heavy trade dispute" and part of a battle which had already attracted extensive media attention for potential customers' hearts and minds.

He ruled there was no malicious falsehood or defamation in Foodstuffs' actions and it had not infringed any standard of impropriety in crossing the threshold of contempt of court.

Foodstuffs managing director Tony Carter said the ruling was a victory for common sense.

"We saw the contempt of court application as an attempt by Progressive to prevent us from informing our customers about why we have not been able to open our Pak 'N Save at Wairau Rd. It was the latest in a string of objections against the Pak 'N Save which Progressive has made against us over the years."

He is now awaiting a date from the Court of Appeal where he hopes to have Progressive's ban on opening the store overturned.

Courting customers

Progressive

* Operates Foodtown, Woolworths, Countdown.

* Has about 44 per cent of the national supermarket business.

* Turns over about $3.3 billion a year.

Foodstuffs

* Operates Pak 'N Save, New World and Four Square.

* Has about 56 per cent of the national supermarket sales.

* Turns over about $6.33 billion a year.