A Belgian court has ruled that advertising claims about the health and environmental benefits of a palm oil-free “Choco” spread were illegal, in a case brought against the supermarket chain Delhaize by Ferrero, which manufactures Nutella.

Delhaize has been ordered not to repeat any claims about its Choco spread being better for the planet or your health, on pain of a €25,000 (£22,000) fine for each repetition.

Ferrero argued that the Delhaize campaign unfairly damaged its iconic Nutella brand, which was placed next to the Choco spread on the supermarket’s shelves.

Delhaize, which had won an earlier court case on the issue, told the Guardian it was considering further legal actions but would not appeal the verdict.

At issue is a short-lived Delhaize advertising campaign in 2013, which claimed that the Belgian outlet’s best-selling Choco spread was better for the planet and for consumer health because it contained no palm oil. Ferrero argued this implied that firms which used sustainable practices for buying palm oil within existing supply chains were ethically inferior.

Greenpeace, which in 2015 rated (pdf) Ferrero one of the best of 14 global manufacturers with “no deforestation” policies, said the case had turned into a battle of sales strategies.

“Ferrero is definitely one of the companies doing its best to implement sustainable commitments,” said An Lambrechts, a Greenpeace Belgium spokeswoman. “This case is more about marketing ploys and market shares and less about who has the best initiative on palm oil.”

Ferrero’s use of palm oil was pushed into the spotlight in 2015 after then-French environment minister Ségolène Royal called for a consumer boycott of Nutella over deforestation concerns. Royal subsequently backed down from the call, offering the confectionery titan “a thousand apologies”.

Multiple studies (pdf) have drawn causal links between the growth of palm oil plantations in south-east Asia and deforestation but the court ruled that Delhaize’s claims were unverifiable.

Ferrero has a robust palm oil charter and says it can trace almost all of its palm oil to sustainable sources. The company came top of a WWF sustainability league table of 137 palm oil buyers last year. It is a member of the Roundtable on Sustainable Palm Oil and the Palm Oil Innovation Group.

“The court sustained Ferrero’s arguments that it is illegal to claim that a product without palm oil is de facto better for environment and has better nutritional qualities than one containing palm oil,” a spokesman for Ferrero said.

“Ferrero has taken admirable steps to reduce the impact of palm oil within its supply chain,” said Glenn Hurowitz, the CEO of Mighty, which campaigns against deforestation caused by palm oil. “But it is as yet impossible to delink one company’s supplies from the broader, continued deforestation of the palm oil industry as a whole.”

A separate argument by Ferrero that Delhaize not be allowed to call their spread “Choco” – because it contains no chocolate – was thrown out by the court.

For its part, Delhaize said Choco was still being manufactured with sunflower oil, cocoa butter and coconut oil – and packaged as palm oil-free.

“We have not seen any impact on [Choco] sales. On the contrary,” said the firm’s communications director Roel Dekelver. “Despite this judgement, we will continue to propose and present innovative and inspirational products to customers that answer their different needs. This won’t hold us back.”

The Belgian supermarket, which merged with Ahold to create a €40bn retail empire last year, had also alleged health benefits from palm-oil free produce, citing “potential health concerns” from palm oil in an assessment by the European Food Safety Authority.

However, this assessment also applied to other vegetable oils and products, and the analysis is currently being reassessed.

Ian Barber, the communications director of the Advertising Association, said that the first rule of advertising was: “If you can’t back up the claim, you can’t make it”.

“I’d imagine the strategy open to Delhaize now is just to advertise that they’re palm oil-free and leave world to make up its mind if that’s a good or a bad thing,” he said.

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