Southcorp Wines Pty Ltd v Kemeny's Food & Liquor Pty Ltd

Southcorp Wines Pty Ltd (Southcorp) sought an interlocutory injunction against Kemeny's Food & Liquor Pty Ltd (Kemeny's) to restrain alleged contraventions of the Trade Practices Act 1974 (Cth) (TPA) and the Copyright Act 1968 (Cth). The dispute concerned Kemeny's sale of Southcorp's Penfolds Grange Hermitage wine at a price significantly below Southcorp's recommended retail price, which Southcorp alleged constituted misleading and deceptive conduct under the TPA and infringement of its copyright in the wine's labels. Southcorp sought to prevent Kemeny's from continuing to sell the wine at this discounted price. The matter was heard in the Federal Court of Australia.

The primary legal issues before the court were whether Kemeny's conduct in selling Penfolds Grange Hermitage at a substantially reduced price amounted to misleading or deceptive conduct in contravention of section 52 of the TPA, and whether this conduct also constituted an infringement of Southcorp's copyright in the wine labels. Southcorp contended that the significant discounting created a false impression about the wine's value and quality, thereby misleading consumers. Kemeny's argued that the pricing was a legitimate commercial decision and did not engage the TPA or copyright provisions.

Justice Forno considered the evidence presented by both parties regarding the pricing strategy and consumer perception. The court found that while Kemeny's was selling the wine at a discount, there was insufficient evidence to establish that this conduct was misleading or deceptive under section 52 of the TPA. The court reasoned that consumers purchasing a well-known premium product like Penfolds Grange Hermitage were unlikely to be misled by a price reduction, particularly when the product itself was not misrepresented. Furthermore, the court determined that the sale of the wine at a reduced price did not constitute copyright infringement, as Kemeny's was merely selling a lawfully acquired product and not reproducing or authorising the reproduction of the copyright material in a manner that would infringe Southcorp's rights.

Consequently, the Federal Court dismissed Southcorp's application for an interlocutory injunction.