Bega wins peanut butter battle with Kraft in Federal Court

Bega shares have soared after a court ruled it can keep selling yellow-topped jars of peanut butter.

A jar of Bega peanut butter. Picture: Peter Ristevski

The iconic tub of Peanut Butter, with its yellow top and wrap-around yellow dressing, can continue to be sold by Australian dairy and foods group Bega after it won a comprehensive victory in the Federal Court this morning over who owns the rights to the Peanut Butter jar design.

Shares in Bega shot higher following the ruling, suring 5.1 per cent to close at $5.32.

It means Bega is now to free to sell the Peanut Butter brand under its classic design and will secure its position as the leading player in the $110 million Australian peanut butter market where it has a market share of around 60 per cent.

Bega, which bought the Mondelez Grocery business in 2017 for $460m including powerhouse brands Peanut Butter and Vegemite to bring both brands home under Australian ownership, was dragged into a court battle by Kraft which claimed it needed to return the brand name and look of Peanut Butter.

 

Kraft split into two separate companies a few years ago, leaving ownership of its Australian spreads with the newly created Mondelez. In 2017, Mondelez sold Peanut Butter, Vegemite and other key grocery brand to Bega Cheese.

Kraft Heinz commenced court proceedings against Bega in the Federal Court claiming it had ownership of the legal rights in the peanut butter trade dress associated with the product packaging, comprising the jar with a yellow lid and a yellow label with a blue or red peanut butter decal with the jar having a brown appearance when filled.

It sought to prevent Bega Cheese from using the packaging trade dress, despite it signing the deal to buy the brands and others from Mondelez.

In a 178-page judgment this morning, the Federal Court vindicated Bega’s position, rejecting Kraft’s arguments and determined that Kraft Heinz’s use of the trade dress is misleading or deceptive under Australian law.

In a statement to the ASX this morning, Bega said it is proud to have bought the Mondelez Grocery Business in 2017, which included Peanut Butter and of course Australia’s most iconic brand Vegemite.

“Our factory at 1 Vegemite Way Port Melbourne continues to produce Australia’s favourite peanut butter, which it has done for more than 55 years.

“Bega Cheese is a proud Australian company investing in Australian jobs, Australian manufacturing and Australian farmers. We look forward to continuing to produce and supply our customers with our much-loved peanut butter products.

“Bega Cheese will review the lengthy Federal Court judgment and make any necessary further announcement following this review. “