An advertising campaign by British Gas that highlighted the French ownership of a rival company has been banned on the grounds that the connection denigrated the company in the minds of the public.
The Advertising Standards Authority condemned the former state supplier for playing up the foreignness of EDF Energy, which is owned by France's state electricity company.
The ruling, which will be announced today, demonstrates rivalry in the energy market and raises questions about how nationality is portrayed in advertising.
Energywatch, the consumer watchdog, said that the adjudication exposed the "old-fashioned" and "bizarre" nature of British Gas's campaign.
British Gas, the country's biggest gas and electricity supplier, questioned whether the ruling meant that references to a company's Frenchness were officially derogatory.
In a series of three adverts in national newspapers knocking its rival's prices and service, British Gas referred to EDF Energy's products as "derived from Electricite de France" or "formerly known as Electricite de France".
EDF Energy, the UK's fifth biggest supplier, made an official complaint that the campaign would give British Gas an unfair advantage by suggesting its energy came from France. Two members of the public also complained that the adverts were xenophobic, but their complaints were rejected.
The ASA partly upheld EDF's case, ruling that readers were likely to believe that EDF was a French business. The ASA said: "We considered the ads were misleading and denigratory and suggested the origin of the product was France."
A British Gas spokesman described the ruling as "political correctness gone mad". He added: "No one is suggesting there is anything wrong with EDF Energy being a French company. Does the ASA really believe that pointing out the nationality of a company denigrates that organisation?"
Energywatch, which acts for consumers in the energy market, criticised British Gas's "misguided" advertising campaign.
A spokesman said advertising campaigns knocking rival energy companies were becoming common as price rises encourage customers to shop around.
He said: "It's bizarre that anyone would think that it's negative to be associated with something French. It's playing to an old-fashioned sense of patriotism.
"It's also hypocritical that British Gas are playing on nationality given that they include British in their title."
EDF Energy stressed it was proud of its French ownership and had not complained that the adverts were denigratory. It had complained that British Gas sought an unfair advantage by suggesting EDF's gas and electricity had a different "designation of origin".
An EDF spokesman said the ASA has upheld a number of complaints against British Gas in recent months from EDF Energy, Npower and Powergen.
The ASA explained that the reference to the company's name was misleading: "We are not saying it's denigratory to call a company French. It could have been any nationality."
British Gas insisted that it did not wish to do down France or French products. "We like the French. We would dearly love to sell them gas and electricity," the company said.
"Unfortunately the French government doesn't want a foreign company selling gas to their residential consumers."
British Gas, which has 11 million customers, is calling for an independent review of the ASA's decision.
* In the run-up to the general election this year, Labour chose to withdraw election posters. One advert portraying Michael Howard and Oliver Letwin as flying pigs triggered accusations that Labour was attempting to highlight the men's Jewish background. Labour vigorously denied any such intention.
* People complained to the ASA that an advert for Spitfire beer captioned "beware of enemy infiltration" was xenophobic. But the ASA ruled that that Shepherd Neame, the company who make the beer, could continue the theme in their advertising.
The director of the company said the adverts were in reference to the purity of the beer.
* In 2001, a leaflet carrying a picture of a German footballer with the slogan "The Krauts are coming - with unbeatable quality" was supported by the ASA, who said "Kraut" was "a light-hearted reference to a national stereotype unlikely to cause serious or widespread offence".
* In 2002, campaigners against the European single currency caused controversy with a video likening euro supporters to Adolf Hitler. The No camp released a short video with a spoof Hitler praising the euro. Dressed in a Nazi uniform, and raising his arm in the salute of the Third Reich, Rik Mayall declared: "Ein Volk! Ein Reich! Ein Euro!"Anti-euro campaigners dismissed the film as a "three-second comedy sketch within a 90-second film".Reuse content