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JDB asks for aid in herbal tea battle

(Global Times)

08:20, March 13, 2013

Hong Kong-based herbal drink maker JDB Group called for help from this week's two sessions to create a fair business environment for privately owned companies Tuesday, as JDB faces a compensation claim for 1 billion yuan ($160 million) made by its State-owned rival.

"We appeal to the deputies to the National People's Congress and the members of the National Committee of the Chinese People's Political Consultative Conference to pay close attention to the ongoing 'herbal tea dispute' between privately owned JDB Group and State-owned Guangzhou Pharmaceutical Holdings," reads an announcement posted on JDB's website Tuesday.

The company said it has encountered unfair treatment in competition with Guangzhou Pharma, as lawsuits filed by the latter have formed a "glass door" stopping JDB from enjoying fair competition in the market.

In 1997, the Guangzhou-based company granted JDB the right to use its Wong Lo Kat trademark until 2010. Following two extensions of the agreement, JDB was allowed to use the trademark until 2020.

Under JDB, the value of the Wong Lo Kat brand has reached 100 billion yuan ($15.76 billion), according to the Beijing Famous Brand Evaluation Co.

But Guangzhou Pharma filed a complaint in 2011 with the China International Economic and Trade Arbitration Commission, saying that the trademark agreement between the two had been extended because a Guangzhou senior executive was taking bribes from JDB's parent company. And the commission ruled in May last year that the two contract extensions had both been invalid and that JDB's right to use the brand had expired in 2010.

Guangzhou Pharma responded in an open letter Tuesday, saying that regardless of whether firms are State-owned or private, they must all play fairly and abide by the laws, and illegal behaviors should be punished.

The firm sued JDB in Guangzhou Intermediate People's Court in November 2012, accusing JBD of unfair competition through false advertising.

At the end of January 2013, the court issued an order requiring JDB to stop using its promotional slogans, which JDB said forced all its promotional activities to stop during the golden sales period of the Spring Festival.

Earlier this month, Guangzhou Pharma announced that it will ask for as much as 1 billion yuan in compensation from JDB, saying that the money will be spent on promotions to eliminate the impact of JDB's previous "unfair competition."

"Such an enormous figure represents an attempt to wipe us out (of the market)," said JDB.

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