Recently, there have been some comments in the press regarding the Competition Council s Decision on the case of “Sudzucker Moldova” S.A. vs. the actions of the State Registration Chamber (now the Agency of Public Services).

In order to clarify some uncertainties in the interpretation of the Competition Council s Decision, we come up with some clarifications:

According to the decision CN-35 of July 14th, 2017, the Competition Council Plenum found that the name of the company “Moldova Zahar” S.R.L. creates an impression among the consumers that the sugar sold is a priori domestic. As a result, by unfairly facilitating sales, through different advertising campaigns in the last years were intensely promoted domestic products, that shows the results of the survey conducted during the investigation of the case, which reflects that ¾ of the population prefers to buy the domestic product, at least for the purchase of sugar. Moreover, according to the statements of the representative of “Sudzucker-Moldova” S.A. during the investigation, brown sugar isn t produced on the territory of the Republic of Moldova, and this fact was not denied by the representatives of “Moldova Zahar” S.R.L. Despite this situation, following the research of the website www.madein.md, which is meant to support the local producers and to promote their products, it was found the placement of the brown sugar of “Moldova Zahar” S.R.L. with the claim “100% domestic product” and with the inscription “Moldova Zahar”. Therefore, under the brand of local product, “Moldova Zahar” S.R.L. sells imported sugar.

Article 12 of the Competition Law no. 183 of 11.07.2012 prohibits actions or inactions of the central and local public authorities and institutions to restrict, prevent or distort competition. In this context, the Competition Council found that the activity of “Moldova Zahar” S.R.L. was granted preferential conditions, when these were not admitted by law (Article 12 paragraph (1) letter b) of the Competition Law 183/2012).

Given that the Decision of the Edineț Territorial Office of the State Registration Chamber dated of 21.01.2011 regarding the registration of the legal entity with foreign capital “Moldova Zahar” Limited Liability Company, is effective even after the entry into force of the Competition Law No. 183/2012, which repealed Law No. 1103 of 30.06.2000 on the protection of competition, the action of the State Registration Chamber, manifested by the registration of the name of the product and the phrase “Moldova” as a company name is to be qualified according to the provisions of Competition Law no. 183 of 2012.

At the same time, we come with some clarifications – why the use of the phrase “Moldova” in the company name in the case of the direct competitor of “Moldova Zahar” is not examined in terms of competition law.

The word “Sudzucker” is composed of two words, one of which is in a foreign language – “zucker” (in German “sugar”) and “South”. For a common consumer these two words combined with the word “Moldova” does not create the impression that this company produces and / or sells domestic sugar. An important thing to mention here is that the name of “Sudzucker Moldova” S.A. contains the name of the European parent company Sudzucker A.G. This is a worldwide practice, when the registration of the company, which is part of a group, uses the name of the group with the name of the country where the representation opens. For example: “Lafarge Ciment (Moldova)” S.A., S.G.S. Moldova, “Mary Kay Moldova Limited” S.R.L., Metro Cash & Carry Moldova” S.R.L.,” Orange Moldova “S.A.,” UPS-Moldova “S.R.L. etc.

At the same time, the name “Sudzucker Moldova”, which contains words in a foreign language, already indicates the possibility of external factors – founders, products / services etc. While the name “Moldova Zahar” creates an allusion that the company is domestic and has exclusive rights and / or sells only a domestic product and / or represents an association of companies on the sugar line, which is not true in the given case. Consequently, the Competition Council has notified the problem not because of the using of the phrase “Moldova” illegally, but by combining the phrase with the name of the product in such a way as to create the feeling that the company in question is the branch of the national economy.

What does the Competition Council follow by adopting the Decision CN-35 of 14.07.2017?

According to the provisions of Competition Law 183/2012, the Competition Council has the power to find violations of competition law, also imposing corrective measures. In the given situation, the purpose of the Competition Council was by no means to remove the company “Moldova Zahar” S.R.L. from the market, as it is speculating, but only to stop the anticompetitive actions by changing the name of the company. For various reasons (such as, for example, the illegal use of the mark) a company is obliged to change its name and this does not mean that it ceases to be active. It is well known that the change of the name, headquarters, administrator, founders does not lead to termination of activity of the company.

Competition Council