US food giant Kraft forced into $9 million payout to Aussie company over peanut butter war

Aussie company Bega has had a massive pay day, squeezing millions out of US food giant Kraft in its protracted war over peanut butter.

A long-running legal battle between a US food giant and Australia’s Bega Cheese is over, with Kraft Heinz agreeing to a $9.25 million pay out.

The two companies had been locked in a dispute for nearly four years over Bega’s right to use the distinctive yellow packaging for its peanut butter.

Bega bought the rights to Kraft’s peanut butter recipe from Mondelez Australia in 2017.

The deal also included the rights to produce the product in Kraft’s Melbourne factory.

Kraft had attempted to argue that it had not sold the right for Bega to use its distinctive yellow “trade dress” packaging and lid.

The trademark fight went all the way to the High Court, where last October the Chicago-based company’s case was thrown out.

It was seeking leave to appeal an earlier Federal court decision which said Bega was free to use the classic jar colouring.

In an announcement to the Australian Stock Exchange on Thursday, Bega said the two companies had brokered a confidential settlement.

“Bega Cheese and Kraft Heinz have now entered into a confidential settlement regarding the issues of monetary relief and legal costs payable in respect of the legal proceedings,” Bega said in the announcement.

“As part of the settlement, all outstanding issues between the parties regarding the right to use the peanut butter trade dress and the legal proceedings have been resolved.

“The terms of settlement include Kraft Heinz making a payment to Bega Cheese of A$9.25 million.”

Bega said it would discontinue all outstanding legal proceedings once it received payment.