Pepsico subsidiary sues Treasury for Food Labeling law

By Aguayo, Ecclefield & Martínez (AEM Law Firm)

Evercrisp, subsidiary of US food giant Pepsico, filed a lawsuit in a Santiago Civil court against the Chilean Treasury, arguing that a Health Ministry resolution infringes its Intellectual Property rights as it prohibits the packaging of its products Chettos and Gatolate with decorative figures. Evercrisp, which handles in Chile the brands Lays, Evercrisp, Pepsi and Gatorade, among others, states that the Health Ministry applied an illegal interpretation of the Law on Food Labeling.

Such new legislation, approved last year, prohibits products high in critical nutrients to use commercial hooks targeting children to induce consumption. It is supervised by the Health Ministry, an organism that established a questionable regulation associated with the law, which contains a thoughtless rule: "An advertising can be considered unauthorized for children under 14 years when it makes use of elements, characters and child figures, animations, cartoons, toys, children's music, and it contemplates the presence of people or animals that attract the interest of children".

Cheetos is a cheese-flavored, puffed cornmeal snack which has a cheetah in its package; Gatolate, a chocolate candy, uses a cat. Evercrisp affirms that those two decorative figures are not advertising elements but trademark designs that contribute to brand identification.

The Food Labeling law has been highly criticized by IP specialists, law firms, lawmakers, politicians and food and beverages companies and organizations, as its too open and vague and its writing could affect IP rights regarding trademarks and intellectual creations previously recognized by Law 19.039.