"Exclusively in Your Pharmacy" – Misleading Advertising?

May a company advertise that its products are available exclusively in the pharmacy if it sells the products only to pharmacies itself, but they can be obtained through other channels? The Regional Court (LG) Hamburg says no.

A company advertised its cosmetic products with the claim"Exclusively in Your Pharmacy". Although the advertising company itself distributes exclusively to pharmacies, the advertised products had in the past entered the assortments of online retailers, retail stores and drugstore chains via the so-called grey market.

A competitor saw in the advertising statement, due to the grey market offerings, an objective inaccuracy and thus anticompetitive misleading advertising.

The advertising company did not share this view. The advertising measures were not objectionable, since it itself only distributed to pharmacies and the relevant average consumer would not understand the advertising statements in any other way.

The Court's Decision

The Regional Court (LG) Hamburg sees this differently. By judgment of 17.11.2016 – Az. 327 O 90/16, the Regional Court (LG) Hamburg affirmedJudgment of 17.11.2016 – Az. 327 O 90/16misleading advertising.

The court takes the view that this constitutes an objectively inaccurate advertising statement and thus impermissible misleading advertising if the advertised products are in fact also available outside of pharmacies, for example in drugstores – even if the manufacturer itself sells the products only to pharmacies, but they enter the assortment of other retailers via the so-called grey market. The grey market offerings do not constitute merely insignificant isolated cases.

In the view of the Hamburg judges, the relevant average consumer understands the notice to mean that the goods are available only in pharmacies. The advertising statement does not contain any qualification that would express that the company itself distributes only to pharmacies – and the consumer would not read the statement in any other way either.

Conclusion

Anyone who advertises his products as "pharmacy-exclusive" should ensure that they do not reach drugstores via the grey market, for example. In order to avoid competition law violations through advertising in general, it is advisable to obtain qualified legal advice beforehand.