Out-Law / Your Daily Need-To-Know

Ad watchdog clears Costa over Starbucks comparison

Out-Law News | 17 Jun 2010 | 9:14 am | 2 min. read

Costa Coffee was entitled to make a claim that Starbucks drinkers preferred its coffee based on the results of a survey it carried out, regulator the Advertising Standards Authority (ASA) has ruled.

Costa ran a series of advertising posters comparing its products to those of its bigger rival, Starbucks. Starbucks claimed that the ads were misleading and the survey on which they were based was flawed, but the ASA said that Costa had engaged in legitimate comparative advertising.

Companies are allowed to compare their products with those of rivals, but must do so in a fair way to avoid breaching industry rules based on the comparative advertising sections of the EU's Unfair Commercial Practices Directive.

Costa published two ads. One claimed that '7 out of 10 coffee lovers prefer Costa', while the other claimed that 'Starbucks drinkers prefer Costa'. The claims were made on the basis of a blind taste test conducted with 174 people in three UK cities.

Starbucks said that the ads should not be allowed because the survey was carried out badly and did not support the claims made in the adverts.

Though it said that there were some problems with Costa's survey, the ASA said that it was well enough carried out overall and that it did support the claims made in the ads.

Starbucks had claimed that the ads were misleading because they would lead a reader to think that seven out of 10 people preferred all Costa products to all Starbucks ones when the survey had only concerned cappuccinos. The ASA said that readers would not think this.

"The CAP Copy Advice team had advised that it would be acceptable for the headline claim not to refer to the fact that the preference related to cappuccinos specifically, as long as that was made clear in qualifying text in the body of the ads," said the ASA ruling. "We noted that the poster did contain qualifying text, as advised, that stated 'In head-to-head taste tests, 7 out of 10 coffee lovers preferred Costa cappuccino to Starbucks'. We considered that that qualifier made clear the specific competitor and coffee product on which the headline claim was based, and that it was sufficiently prominent to capture consumers' attention."

The ASA also found that the small print used to qualify the claims made in the main heading was large enough, and that the survey was reasonably conducted.

"The ads stated that the claims related to a preference for cappuccinos, and we did not consider that the survey was flawed on the basis of only selecting one product for comparison," it said. "We noted the products were anonymised prior to testing and participants were not told the brands of the products they would be testing ... we considered that consumers would understand taste to be a subjective measure, and that the survey methodology as reported was suitable to support a claim based on the subjective impressions of the participants."

Litigator David Woods of Pinsent Masons, the law firm behind OUT-LAW.COM, said that while comparative advertising could be very effective, any company seeking to employ it had to be careful about exactly how they do it.

"Comparisons with other products and brands can be made but there are strict guidelines in place for how it can be done fairly. If you follow these to the letter you can make them," said Woods.

Woods said that claims must not be misleading; must compare like with like; and must objectively compare some feature of the goods which can be checked.

"The tension comes in because you might make those comparisons, but marketeers will want to make a statement based on them which is interesting and memorable, which may not follow all those rules," he said.

Woods said that Costa's case had been helped by the fact that it had consulted the Committee of Advertising Practice Copy Advice team before publication.

"Consulting with the CAP advice team is a sensible step," he said. "It doesn't guarantee anything but the ASA will take it into account."