“Why did Usec Salazar unduly favor the complainant, Energy Food and Drinks Inc. (EFDI), a disgruntled former distributor of Red Bull that lost its distribution contract in 2008? Is he on the same straight and narrow path that the rest of government seems to be on? ”
by Ducky Paredes
We might as well abandon all expectations of attracting more foreign investors to the country if, not only do we not protect their interests here, our own government even sides with the crooks.
There is the sad experience of T.C. Pharmaceutical Industries Co. Inc. (TCPI), the Thai manufacturer of Red Bull energy drink, and their local distributor Maryland Distributors Inc. (MDI).
How the heck could it happen that, on June 21, 2012, Justice Undersecretary Jose Vicente Salazar ordered the Legazpi City prosecutor to file criminal charges against TCPI and its legitimate distributor of three years MDI for alleged unfair trade competition and conspiracy to commit fraud through misbranding.
TCPI legal office manager Prasit Somnet seems to know our laws better than the Justice undersecretary. Prasit asks: “How can a manufacturer be sued for unfair competition for its very own product when there are no competing products to begin with?
“How can we be remotely said to be in violation of the said law, when we are in truth and in fact, the owners of the intellectual property right, which in this case is the Red Bull brand?”
The DOJ’s Usec, in fact, did a 180-degree turn since the Office of the Justice Secretary in its resolution on the case dated May 24, 2010 ruled that there was no unfair competition to speak of as Red Bull products are genuine as certified by no less than the manufacturer itself, TCPI.
Justice Undersecretary Salazar clearly did a dumb thing. If this country were a meritocracy, he would be kicked out together with all of our sports officials responsible for the country’s continuing shameful showing in the last Olympiad in London!
Why did Usec Salazar unduly favor the complainant, Energy Food and Drinks Inc. (EFDI), a disgruntled former distributor of Red Bull that lost its distribution contract in 2008?
Is he on the same straight and narrow path that the rest of government seems to be on?
TCPI actually terminated its contract with EFDI for just cause and appointed MDI as its authorized distributor in the Philippines.
Of course, TCPI and MDI filed their respective motions for reconsideration with the DOJ. But, what hope does one have for a reconsideration when the man in charge is either ignorant of the law or could be on the payroll of EFDI?
We also have the right to wonder how we can attract more foreign investments if the DOJ decides a case before it without benefit of Law or even good sense?
TCPI is among the largest private sector investors from Thailand that have made significant contributions to the Philippine economy with their world-renowned energy drink Red Bull.
“Our good name and reputation is being threatened anew by a groundless criminal allegation that a former distributor lodged against us,” TCPI said in their letter to De Lima, adding that they “have attached great importance to business transparency, ethics as well as the practice of corporate social responsibility.”
Secretary de Lima was on leave, of course, in her quest to become CJ.
The instant (without thinking) resolution signed by the DOJ Undersecretary sends out the chilling message that the interpretation of laws in the Philippines can be bent.
This came as a complete and absolute shocker to Red Bull manufacturer T.C. Pharmaceutical Industries Co, Inc. and probably all other foreign investors who came in thinking that with PNoy, the country was a better place to put in their money!
The Salazar resolution ordered the Legazpi City prosecutor’s office to file a case against TCPI and MDI for alleged unfair trade competition and conspiracy to commit fraud through misbranding.
Earlier, the Legazpi prosecutors dismissed EFDI’s complaint.
The DOJ’s Task Force on Anti-Intellectual Property Piracy, the Office of the DOJ Secretary and the City Prosecutor’s Office of San Fernando, La Union were all in agreement that EFDI’s complaint was bereft of any legal leg to stand on.
The ball is now at the hands of Justice Secretary Leila de Lima to whom TCPI and MDI have filed their respective motions for reconsideration of the Salazar resolution.
The numerous complaints filed by EFDI against TCPI and MDI is its way of getting back at them. TCPI terminated EFDI’s distributorship of Red Bull products in the Philippines for just cause (failing to meet its obligations). In EFDI’s place, TCPI appointed MDI as Philippine distributor of Red Bull.
In its motion, TCPI points out: “Our good name and reputation is being threatened anew by a groundless criminal allegation that a former distributor lodged against us.
“With regard to our investments here, we are proud to say that we have attached great importance to business transparency, ethics as well as the practice of corporate social responsibility.”
Apparently, while TCPI terminated the services of its former distributor EFDI in 2008, the distributor has been fighting this termination in court.
Just last month (July 31), the Court of Appeals (CA) affirmed its September 26, 2011 ruling that nullified a Quezon City Regional Trial Court (RTC) order preventing TCPI from terminating its contract with EFDI.
“From the records of the case, neither was EFDI able to show that it would suffer serious and irreparable damage as a consequence of TCPI’s termination of the parties’ agreement,” the appellate court said.
TCPI terminated its distribution agreement with EFDI on October 31, 2008.
EFDI, however, questioned this before the Quezon City RTC, which issued a writ of preliminary injunction. CA’s fourth division later invalidated the injunction. On October 5, 2011, EFDI filed a motion for reconsideration.
The CA noted that Quezon City RTC Judge Santiago Arenas was wrong to issue the preliminary injunction since EFDI failed to prove that it would suffer irreparable damage due to the termination of the contract.
“EFDI failed to sufficiently prove the existence of a right in esse and the probability of irreparable damage as would justify the RTC’s issuance of the assailed orders and writ of preliminary injunction,” says the CA.
TCPI has designated Maryland Distributors Inc. as the authorized and exclusive importer of Red Bull in the Philippines until December 2015.
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I, for one, am glad that Leila de Lima is not on the list from which our President will choose the next Chief Justice. At least, whoever Noynoy chooses, our experience of impeaching Gloria’s Own CJ will not have been in vain.
Imagine if PNoy had chosen Leila, will that not be proof enough for the non-believers that all PNoy wanted, after all, was his own personal pet CJ to do his bidding just as Gloria wanted Renato there for her own awful interests. Then, the President himself would have created the first u-turn on his Daang Matuwid!
Thank God that we might still be traveling on the straight and narrow.
Besides, De Lima has clearly shown that she has neither the temperament nor the sense of propriety we should expect of a CJ just as the recently impeached also had none of the above.
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hvp 08.14.12Readers who missed a column can access www.duckyparedes.com/blogs. This is updated daily. Your reactions are welcome at email@example.com