20th April 2020
As the Covid-19 pandemic wreaks havoc on the Maltese retail, hospitality and leisure sectors, retailers, supermarkets, garden centres, bottle shops and restaurants scramble to tap into the Covid-19 market with the aim of satisfying bored and hungry consumers who are stuck at home in self-isolation.
Demand is inevitably followed by supply, with enterprising individuals rushing to fill the gaps in the market, providing courier services and food take out, and delivering vegetable crates, home-made baked goods, sanitizers, face masks and other products, directly to the consumer.
In the face of this new reality a number of legal issues need to be considered in order to ensure that these new services are in compliance with applicable Maltese law.
Couriers, Deliveries and Personal Shoppers
The emergency health laws enacted to curb the spread of the Covid-19 pandemic have led to the closure of restaurants and catering establishments, as well as the general avoidance of crowded places such as supermarkets, grocery stores and shops in general.
This has led to the boom in delivery or “courier” services with plenty of mobile apps, websites and Facebook pages providing take out delivery, fresh fruit and produce, and even groceries straight to the consumer’s door. In this scenario, restaurateurs and traders are shifting to sell prepared, frozen or take-out goods, choosing to either provide a delivery service in-house or to out-source this function to third party providers.
“Courier” companies or “personal shopping” providers are also on the increase, servicing consumers who would rather not venture outside, and literally doing their shopping and taking it straight to their door. A number of legal issues arise in cases where such couriers are not officially-partnered or approved by the respective retailers, but proceed to deliver the retailers’ goods, to showcase their products and menus, and to deliver their products (due to high consumer-driven demand).
This has already led to legal issues in the US and the UK where ‘fast-food’ delivery companies Grubhub, Seamless and Yelp have adopted the practice of providing take away services, which requires them to reproduce menus without authorisation from the relevant restaurateurs. This practice has also made way to our shores with competing courier companies scrambling to acquire new markets and streams of revenue.
This can lead to allegations of deceit by restaurateurs who choose not to provide delivery services, but end up unknowingly doing so unwittingly. Some restaurateurs would rather not provide a delivery service, since this might not be in line with their vision and product-offering. Similarly, some retailers would rather not deliver their products, due to strategic, operational or competitive reasons. Some retailers selling seasonal produce or in highly competitive industries such as the wholesale and retail markets would rather not publicly list their entire price list of goods to be made available to the general public (and the competition) on the internet. Certain retailers may also rather not be associated with third-party providers at all, seeing that this might result in a loss of control over quality and reputation, which takes years to build and seconds to destroy.
While the practice of offering courier services is not specifically regulated locally, a number of legal issues related to ‘passing’ off, unfair competition and IP infringement may arise if such courier-services are offered without the relevant retailers’ approval or without appropriate contractual arrangements.
Even in cases where there is mutual agreement for the provision of delivery services, in order to protect one’s brand, goodwill and reputation, it may be advisable for restaurateurs, wholesalers and retailers to enter into franchise agreements or delivery service agreements containing clear service-levels regulating delivery times, cold-chain, consumer issues, food safety, liability, and intellectual property matters to ensure that clear boundaries are drawn between the principal and delivery-service providers who are providing the service.
Consumer Rights when Shopping Online
With a huge shift to online shopping and delivery of goods to consumers, retailers should keep in mind the Consumer Rights Regulations (S.L 387.17) which apply in most cases of distance selling (bar a number of sectors and exceptions) and which provide rules on distance selling i.e. contracts of sale concluded “without the simultaneous physical presence of the trader and the consumer.” When selling over the internet a trader should provide the consumer with clear and comprehensible information on the identity of the trader, price and extra charges, mode of payment, delivery, warranty, functionality, and the right of withdrawal or ‘cooling off period’ of 14 days (save for exceptions provided in the law).
Consumers also have recourse at law if the goods delivered are not in conformity with the description of the goods or when ‘wrong’ items are delivered. In these cases, the costs of returning the goods and receiving the ‘correct’ one must be borne by the trader. Goods delivered to consumers may also arrive with missing items, in which case the consumer must inform the trader straight away and ask to have the missing items delivered without unnecessary delays. When such a solution is not possible, consumers may cancel the sale and claim back the money paid to the trader.
The current surge in business and demand for the delivery of goods sold online is also leading to delays in the delivery of such goods. The same regulations provide that unless the parties stipulate otherwise, consumers must be supplied with the ordered goods within 30 days from the date of the order. Where the trader fails to deliver within a ‘reasonable’ time, the consumer will have a right to cancel the sale and request a refund of any price paid.
Importing Sanitizers? Hold your horses!
Producers, distributors and importers of sanitizing products, gels and products are also riding the wave of huge consumer demand brought about by the Covid-19 pandemic, and the consumer’s need for sanitizing products required to keep the virus at bay.
It is however important to note that Maltese and EU product safety law classify, sanitizing products including “any substance or mixture, in the form in which it is supplied to the user, consisting of, containing or generating one or more active substances, with the intention of destroying, deterring, rendering harmless…any harmful organism by any means other than mere physical or mechanical action” (e.g. a virus) as a ‘Biocidal Product’.
In turn, Biocidal Products are regulated in terms of product-safety laws by the Malta Competition and Consumer Affairs Authority (“MCCAA”), and any natural or legal person making these products available on the Maltese market are obliged to notify the MCCAA within 30 days from their placing on the market. The notification procedure is meant to ensure that the biocidal products put on the Maltese market are in conformity with EU and Maltese product safety law, and are suitable for consumer use. Notifiers are bound to produce product information and details to assist the MCCAA in verifying the quality and conformity of these products and the MCCAA also keeps a register of approved products which have been approved and can be sold locally.
How can we help?
Should you require any further information or assistance on the matter do not hesitate to reach out to us personally.
© Fenech & Fenech Advocates 2020
Disclaimer │ The information provided on this Update does not, and is not intended to, constitute legal advice. All information, content, and materials available are for general informational purposes only. This Update may not constitute the most up-to-date legal or other information and you are advised to seek updated advice.