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Motor Insurance
Tuesday, January 1, 2013
Clearer view of falsehood

Local parts importer and distributor, Grandmark International, has been granted an interim interdict by the South Gauteng High Court that prevents the PG Group from engaging in further “anti-competitive” and “unconstitutional” conduct to discredit its products.


Grandmark International sought relief from the courts as PG Group, manufacturers and distributors of Shatterprufe® and Armorplate® glass products, embarked on a widespread disinformation campaign that made use of “unsubstantiated” claims and “speculation” to infer that Grandmark Glass products were “inferior”, “unsafe” and that consumers were “playing Russian Roulette” by using these products.
According to Ian Pluke, Managing Director of Grandmark Glass Insurance Fitment Division, as well as the presiding judge, Judge J. Tsoka, the motive for PG Group employing these tactics was “glaringly obvious”, as the company was “afraid of competition”.
“We feel that this anti-competitive behaviour on the part of PG Glass is based largely on the recent success of Grandmark Glass. The increased market awareness and the acceptance and use of our products, as approved replacement parts by the insurance industry, has seen our market share rapidly rise since 2010. This has obviously unsettled the status quo in the automotive glass industry as we offer quality products at a lower cost. This means most short-term insurers can pass the savings of replacement costs onto their customers by forgoing the excess payments normally required when replacing windscreens. This has made us extremely competitive in the local industry,” explains Pluke.
To this end, PG Group has continually claimed, in correspondence with short-term insurers and through road shows to brokers, that Grandmark uses recycled vinyl in the manufacture of the windscreens sold and fitted in South Africa, and that this produces unsafe and inferior quality glass that can be fatal in an accident. The vinyl used in motor vehicle windscreens (Polyvinyl Butryal or PVB), is integral to maintaining the integrity of the windscreen on impact as it prevents shattering.
According to Pluke, Grandmark International was compelled to take legal action based on these unwarranted and false claims, as they are financially damaging to the brand and amounted to unlawful competition. “We weren't willing to allow the PG Group to continue perpetuating these falsehoods, which is why we sought relief from the courts.”
In the ruling handed down on 3 December 2012, Judge Tsoka stated that PG Group's inferences pertaining to the quality and safety of Grandmark Glass products were “unsupported by facts” and were mere “speculation”. Furthermore, the Judge stated that the so-called “empirical evidence” from chemical analysis done by Sigmatec, used to support PG Group's claims, provided no “scientific evidence” or “proof” and were not supported by either Solutia or Du Pont, key international suppliers of PVB to the automotive glass industry. Further findings have shown that Grandmark Glass is made of the same content as that of Shatterprufe branded glass, albeit with a small structural variant and that PG Glass uses two of the same PVB suppliers as Grandmark International in Du Pont and Sekisui.
As such, Judge Tsoka ruled that the PG Group's conduct was anti-competitive and unconstitutional and found in favour of Grandmark International. The PG Group has therefore been ordered to stop the disinformation campaign against Grandmark International and Grandmark Glass products as the court found that Grandmark had established prima facie rights and that the continued spreading of these injurious falsehoods would cause “immeasurable and irreparable” harm to Grandmark International's business.
“While clearly a favourable ruling for Grandmark, this is also a great win for the South African consumer by having more competition in the automotive windscreen market and being able to choose from various quality providers. We are keen to continue working with our insurance partners to lower the cost of repair which, if sustainable, will directly translate into more affordable premiums and therefore more insured vehicles on the road. This has its own socio-economic benefits for the country.”
The interim interdict application was granted with costs and a counter-application brought by PG Group was also dismissed with costs based on these findings. The matter is now left to trial.
 

Copyright © Insurance Times and Investments® Vol:26.1 1st January, 2013
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