Herbal tea JDB to pay compensation for false advertising

A court in South China's Guangdong Province ruled Friday that Jiaduobao Group (JDB), a Hong Kong-based beverage manufacturer, must compensate Guangzhou Pharmaceutical Holding Ltd (GPH) for false advertising.

JDB must pay a total of 10.81 million yuan ($1.78 million) to GPH, best known for manufacturing Wong Lo Kat herbal tea, and stop using false slogans, the Guangzhou Intermediate People's Court said Friday.

GPH filed a lawsuit against JDB for using false slogans, such as "Wong Lo Kat has been renamed Jiaduobao" and "the nation's leading red tin herbal tea has been renamed Jiaduobao," and accused the company of unfair competition by using false advertisements.

JDB had been using the Wong Lo Kat brand since 1995, when it leased the brand from GPH. However, the company was only authorized to use the brand until 2010, and had the lease contract extended by bribing administrative staff of GPH.

The case went to arbitration on April 2011, with the China International Economic and Trade Arbitration Commission ruling in May 2012 that the brand rights rest with GPH.

JDB has since then produced a red tin herbal tea branded with the "Jiaduobao" name.

The ruling said JDB was guilty of false advertising as there was no evidence that the Wong Lo Kat brand name had been renamed "Jiaduobao."

JDB also has to make a public apology to GPH, it added.

JDB said on its official website on Friday that it is "shocked" by the ruling and it would appeal to a higher court.