Stellenbosch Wine Trust Ltd and Others v Oude Meester Group Ltd and Others

• Jurisdiction: South Africa
• Judge: Theron J
• Judgment Date: 27 January 1977
• Court: Cape Provincial Division

Theron, J:

In this case an application was brought by certain five companies against four other companies for an interedict pendente lite and other relief. The application came before me as a matter of urgency. It was opposed but, after hearing counsel on both sides and studying the various affidavits which had been filed and certain exhibits produced at the hearing,

Theron J

I granted a temporary interdict and ancillary relief substantially in the terms prayed for - although I introduced some amendments of a minor nature and also certain A amplifications which I considered desirable in order to minimise the possibility of any misunderstanding of the effect of the order made by me.

When I granted this order I stated that my reasons for doing so would be furnished later. They are set out hereunder, followed by the order itself.

The applicants are Stellenbosch Wine Trust Ltd. (first B applicant) and a group of companies apparently controlled by it, viz., the Stellenbosch Farmers' Winery Ltd. (second applicant), the Stellenbosch Farmers' Wineries Production Ltd. (third applicant), the Stellenbosch Farmers' Wineries Marketing Ltd. (fourth applicant) and Nederburg Wines (Pty.) Ltd. (fifth applicant). All these will hereinafter - where convenient - be referred to collectively as the S.W.T. Group. The C respondents are Oude Meester Group Ltd. (first respondent), the parent company of a number of wholly-owned subsidiary companies including Distillers Corporation Ltd. (second respondent), Vincor Ltd. (third respondent) and F. K. Green & Co. Ltd. (fourth respondent). For convenience all these respondents will, at times, be referred to collectivey as the O.M. Group.

D In terms of the notice of motion, the principal relief sought by the applicants was an order:

"(a)

Interdicting and restraining the respondents from -

(i)

bottling or selling their product known as Monte Carlo Baby Duck in the get-up of sparkling wine;

(ii)

E from passing off the said product as sparkling wine;

(iii)

from labelling, advertising or selling the said product in such manner or in such container or containers as may lead the public to believe that it is not perlé wine and that it is sparkling wine;

(iv)

F from selling the said product in bottles which are not labelled in large letters, easily legible, with the words stating that it is perlé wine;

(v)

from keeping and displaying the present advertisement of the said product which appears on a hoarding at the Railway Station, Stellenbosch, and all other places G where such advertisement is displayed;

pending the outcome of an action to be instituted by the applicants against the respondents for a permanent interdict of the nature specified in sub-paras. (i) to (v) and for ancillary relief;

(b)

directing the respondents to withdraw from all wholesale and retail dealers all stocks of its Monte H Carlo Baby Duck which appear in the get-up of sparkling wine and/or which are labelled in such manner or are in such containers as may lead the public to believe that it is not perlé wine and that it is sparkling wine, and/or that are not labelled in large letters easily legible with words stating that the product is perlé wine;

(c)

granting such further or alternative relief as this Court may deem necessary;

(d)

directing the respondents to pay the costs of this application including

Theron J

the costs of two counsel."

According to the main founding affidavit filed by the applicants, which was deposed to by one Melck, the companies comprising the S.W.T. Group have individually and collectively A been engaged for many years in the production, manufacture and marketing of a wide range of alcoholic beverages in the Republic of South Africa. The same applies to the companies which constitute the O.M. Group.

Melck deposed that the S.W.T. Group was the foremost manufacturer and producer and supplier to the retail liquor B trade in the Republic of what he called "sparkling wine". According to him the Group produced three wines in this class, viz., Grand Mousseux, Nederburg Cuvee and 5th Avenue Cold Duck. The first-mentioned of these had been established on the South African market for over 40 years, the second for about 20 years and the third for five. The total sales of the three during the year 1 April 1975 to 31 March 1976 had amounted to C 1891657 litres, which constituted 67,9 per cent by volume of all South African "sparkling wines" sold during that period. These sales made a substantial contribution to the total revenues of the S.W.T. Group and the goodwill in the three products referred to was extremely valuable.

It is claimed by Melck that in the Republic of South Africa and, indeed in all wine producing and wine consuming countries D thoughout the Western World, "sparkling wines" are recognised as falling into a separate category because of their characteristics. In this category are the wines known as Champagne, Sparkling Burgundy, Sparkling Moselle, Asti Spumante and also a variety of such wines produced in the Republic, including the three products of the S.W.T. Group mentioned E above. Of the characteristics and attributes ascribed by Melck to sparkling wine I need mention only the following, viz., that it is a wine surcharged with carbon dioxide (by natural fermentation or artificial impregnation) so that the pressure in a bottle of it, when ready for consumption, amounts to approximately five atmospheres (or 500 kPa). To withstand this F pressure a specially strong, heavy bottle is required - which is designed and manufactured for the purpose and is commonly known as a Champagne bottle - and exceptional methods have to be adopted in order to ensure that the cork or stopper used to close the bottle after filling it is not forced out of the neck prematurely. For this reason a Champagne bottle is manufactured with a strong, pronounced rim to its neck; a G cork of specially large diameter is compressed into the neck, or a mushroom-shaped plastic stopper similar in appearance to a used Champagne cork is employed; the top of the cork or stopper is protected by means of a small metal disc; and a hood of wires is braced over the top of the inserted cork or stopper and secured around the special rim of the neck. Melck points H out that a bottle of sparkling wine, when uncorked, gives off a considerable volume of carbon dioxide under pressure, often causing a loud popping sound. The wine itself, he alleges, presents a lively, effervescent appearance when decanted into a glass and continues for a considerable period of time to release bubbles which have a sparkling effect and tittilate the palate. The effect is stimulating. He adds that the wine, because of its sparkling, effervescent effect, has by long tradition become symbolic of celebration, enjoyment and excellence. Then, in para. 14 of his affidavit, he makes the following claim:

Theron J

"In South Africa, the term 'sparkling wine' has a clear, well defined and well understood meaning both in the liquor industry and retail liquor trade and for the public. It has come to mean and connote the South African equivalent of French Champagne."

In para. 15 he adds:

A "The reason why South African sparkling wine is not sold and described as Champagne is that since 1935, use of the term 'Champagne' with reference to South African wine has been, and still is, proscribed by law. The measure which at present gives effect to this prohibition is Government Notice R426 published in the Government Gazette of 16 March 1962."

(This Government Notice is annexed to an affidavit filed by one B Le Roux on behalf of respondents. From its terms it would appear that the prohibition in question probably resulted from an agreement between the French and South African Governments designed to prevent confusion between certain wines produced in France and locally produced wines.)

Having dealt in his affidavit with "sparkling wines" generally, Melck continued to mention that there was another category of C wine sold in South Africa, known and described as "perlé wine". This, he stated in para. 16 of his original affidavit, was a wine "mildly surcharged with carbon dioxide to a far lesser extent than sparkling wine". From what he stated in a replying affidavit filed by him later (see para. 5 (d) thereof) it would appear that what he really meant by this was that D perlé wine was a wine which was only mildly carbonated in comparison with what he called sparkling wine. To complete the picture I should, perhaps, mention that Melck appeared to accept that there were wines even more mildly carbonated than perlé wines, because he stated (in para. 17):

"Wines other than sparkling wines and perlé wines give off little or no carbon dioxide and are not relevant to these proceedings."

E It is convenient to interrupt my summary of Melck's affidavit at this stage in order to mention that - although, as far as I can recall, this is not stated directly anywhere in the affidavits filed on behalf of applicants - it would seem clear from the papers before me, taken as a whole, and from a study of the provisions of the Wine, Other Fermented Beverages F and Spirits Act, 25 of 1957, together with the Parliamentary history associated with this measure, that perlé wine is a comparative newcomer on the liquor market. That this is so was, indeed, accepted by counsel on both sides during the course of the argument before me. In the opposing affidavit filed by G respondents, which was made by one Venter, the latter alleges (in para. 8 (a)):

"In the 1960's the name 'Perlé' was used in South Africa in the marketing of certain sparkling wines with a light degree of carbonation. These wines became more popular from about 1970 when one of respondents' subsidiaries began to market a wine called 'Pearl Perlé'."

In his replying affidavit Melck did not...