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De Lima reverses ruling against Red Bull maker



Justice Secretary Leila de Lima INQUIRER FILE PHOTO

MANILA, Philippines—Justice Secretary Leila de Lima has reversed a decision issued by her department in June 2012 and ordered the prosecutor of Legazpi City to withdraw a criminal case earlier filed against the Thai manufacturer of Red Bull energy drink and its authorized distributor in the Philippines.

In a seven-page resolution issued last Dec. 5, De Lima granted the motion for reconsideration filed by Thailand-based TC Pharmaceutical Industries Co. Ltd. (TCPI) and its authorized distributor Maryland Distributors Inc. (MDI), which contested the June 21, 2012, resolution issued by Department of Justice (DOJ) Undersecretary Jose Vicente Salazar.

De Lima said there was no probable cause to charge TCPI with unfair competition, as alleged by Energy Food and Drinks Inc. (Efdi), the former distributor of Red Bull in the country.

“We find no deception or fraudulent intent on the part of TCPI or MDI.  Accordingly, no unfair competition was committed,” she said.

The DOJ also effectively recognized the right of TCPI to choose its authorized importer and distributor in the Philippines. TCPI is one of the largest companies in southeast Asia.

Foreign investors have been monitoring the progress of the case because of its implications on the relations of global manufacturers and their distributors in the Philippines.

In his June 2012 resolution, Salazar recommended the filing of criminal charges against the top officials of TCPI and MDI for alleged unfair competition.

Efdi claimed it was the authorized distributor of Red Bull in the Philippines but TCPI said it terminated its contract with Efdi on Oct. 31, 2008.

On May 22, 2009, TCPI formally appointed MDI as its authorized distributor. On Oct. 26, 2009, the Thai company announced the appointment of MDI as the exclusive Philippine importer of its products.

EFDI, however, filed identical criminal cases against TCPI and MDI in various courts around the country for alleged unfair competition. All these cases have been dismissed, except the one in Legazpi City, which was initially dismissed by the prosecutor but revived by Salazar in June this year.

“Contrary to the ruling in our June 21, 2012, resolution, no probable cause exists to charge respondents with unfair competition,” De Lima said in granting the motion for reconsideration in favor of the Thai manufacturer.

In her resolution, De Lima said the facts of the case do not show that TCPI passed off Red Bull products which it manufacturers for those products which Efdi deals with or distributes.  “The facts do not also show that MDI passed off the products that it was dealing with or distributing …as the goods of Efdi,” she said.

De Lima said the stickers on the label of the Red Bull products distributed by MDI in fact inform the public of the source of the products and who actually distributes them in the Philippines.


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Tags: Leila de Lima , Maryland Distributors Inc. , MDI , Red Bull energy drink


  • mon key

    Good move by Sec de Lima! Why in the first place can a distributor sue a manufacturer for unfair competition, after the distributorship contract is terminated?
    The story has a typographical error though –
    Paragraph 9 – On May 22, 2009, TCPI formally appointed MDI as its authorized distributor. On Oct. 26, 2009, the Thai company announced the appointment of MDI as the exclusive Philippine importer of its products.
    Paragraph 8 – Efdi claimed it was the authorized distributor of Red Bull in the Philippines but TCPI said it terminated its contract with Efdi on Oct. 31, 2008.
    How can a contract be terminated before a contract is consummated? 

  • ben311

    pera pera lang yan , yan ang justice kuno sa pinas

  • http://pulse.yahoo.com/_UWISP2YXGDQ7K2SIX2GI37B2EI Darwin

    Nabayaran yung judge malamang. Dapat may penalty din sa kanya.

  • 0pinion8Ted

    Protection from pre-termination of a contract may not be absolute if there was a clause between the Manufacturer and the distributor that would say that both party had agreed to terminate or pre-terminate such contract if due to so so and so. However, if the contract has already expired then it’s moot and academic, the principal has every right if it wishes to re-new the contract or to look for new distributors. 

    They key to the resolution of this case is the actual content of the Contract Agreement and the registry ownership of the trade name and trademark of the product.



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