Procter & Gamble East Africa (PGEA), the company sued by Unilever Kenya for allegedly running a non-factual detergent advertising campaign for Ariel, has denied trading in the brand.
PGEA says it has gone into liquidation and is thus its not in a position to trade in the American transnational’s brand.
Ariel is a washing powder that has in the last few years been in fierce competition with Omo for the bigger share of the domestic laundry market.
PGEA has filed a surprise application at the High Court arguing that it has been out of business for the last six years and in liquidation since February this year.
Unilever, which manufactures the flagship Omo washing powder, has been offended by Procter & Gamble’s prime-time television advert promoting Ariel as the best stain removal detergent “in one wash”.
Research puts Ariel’s market share at 24.4 per cent and that of Omo at 28.2 per cent, a fact likely to disturb Unilever given that the Ariel brand only returned to the market a few years ago after being thrown out during Kanu’s last term over allegations of dumping.
But PGEA now seeks to be struck out of the proceedings, arguing that the case was instituted against it by mistake.
“The defendant stopped trading on October 30, 2006 and has been dormant since then and it went into liquidation on February 19, 2013 and as such did not carry out any of the advertisements complained of in the plaint,” said PGEA in its application.
Unilever’s lawyer Kamau Karori told the court he needed more time to establish if the company is in liquidation.
“They are saying they are under liquidation and that they are not the company behind the advert which we don’t agree with. I need more time to establish this,” said Mr Karori.
Ariel is manufactured in Egypt by a subsidiary of the US-based Procter & Gamble.
P&G early last decade stopped manufacturing in Kenya in favour of Egypt but maintains a trading presence.
The company manufactures a wide range of beauty, household and wellness goods. On its web site, it says it has outlets in more than 80 countries and lists Procter & Gamble East Africa as one of its affiliates in Kenya.
PGEA has annexed a Kenya Gazette notice of liquidation and the minutes of the liquidation. PGEA says the advertisement started in June long after it went into liquidation.
The Ariel ads are seen as answer to Omo’s long-running “dirt is good” campaign.
On Wednesday, Mr Karori told the High Court that the prime time adverts are doing great damage to Unilever’s products, and that the court should treat the matter as urgent and intervene.
He was seeking an interim order stopping the company from running the adverts, but this was postponed following the development.
Unilever was given more time until September 10 to seek clarifications on the PGEA argument.
Unilever says the adverts depict Omo as incapable of removing the stains in “one wash”, arguing that the claim is not based on any independent research.
The company further claims that the advertisements are unlawful and are in breach of the Competition Act, the Code of Advertising Practice and Direct Marketing Rules, the Trade Descriptions Act and consumer rights.
Unilever says a June 2013 AC Nielsen Research places Omo head-to-head with Ariel in terms of market share. It claims its market share is threatened by the ad.